Market Review
In the five trading days last week (1227-1231), the building materials (CITIC) index rose 1.40%, and the Shanghai and Shenzhen 300 rose 0.39%. Among the sub sectors, industrial building materials, consumer building materials and municipal pipelines rose better. Among individual stocks, Flat Glass Group Co.Ltd(601865) , Cubic Digital Technology Co.Ltd(300344) , Dehua Tb New Decoration Material Co.Ltd(002043) , Luyang Energy-Saving Materials Co.Ltd(002088) , Jinyuan Ep Co.Ltd(000546) led the increase.
The building materials (CITIC) index increased by 9.43% in 2021, ranking 15th among the 30 primary industries, higher than the Wande A / CSI 300 index by 0.26/14.63pct. In the middle of 2021, the fluctuation of building materials index increased significantly after June, and experienced two waves of big decline from early June to late July and from mid September to mid November. However, after November, with the stabilization of the real estate policy end, the building materials index also ushered in a bottom rebound. Special materials, glass, glass fiber and consumer building materials all increased by more than 20% in 2021. The cement sector is the only sub sector with negative annual income, which fell by 10% in the whole year. Other structural material sectors performed relatively well after November, which may be related to the gradual warming of market expectations for pipe network investment.
Residential transactions in December are still in the process of bottoming out
We made statistics on the transaction area of second-hand houses in 13 representative cities with complete second-hand house transaction data. The transaction area of second-hand houses in the above 13 cities in December was - 43% / - 31.8% respectively compared with 20m12 / 19m12, which was expanded compared with November, but significantly narrowed compared with September. The transaction area in the whole year of 21 was - 9.8% / - 2.4% higher than that in 20 / 19. The transaction area of commercial housing in 30 large and medium-sized cities in 21 years increased by 4.7% / 1.7% compared with that in 20 years / 19 years, and - 22.5% / - 14.5% compared with the same period in 20 years and 19 years in December. The growth trend is similar to that of second-hand housing. We believe that the marginal improvement of real estate and mortgage policies, and the year-on-year growth rate of sales of first-hand houses and second-hand houses may gradually pick up.
It is suggested that the investment chain should focus on the medium and long-term value of consumer building materials, and the emerging chain should focus on photovoltaic / electronic glass
1) Since the beginning of this year, the consumption of building materials has been affected by the real estate boom, the capital chain and the cost pressure caused by the continuous rise of bulk commodity prices. At present, the above factors are expected to be gradually improved. In the medium and long term, the leading companies have opened channel changes, and the scale effect is expected to continuously improve the industry concentration. The consumption of building materials is still the preferred track in the building materials sector in the medium and long term. 2) We expect that the subsequent demand on the real estate side is expected to hit the bottom and pick up, and the steady growth is also expected to marginally boost the demand for infrastructure. The supply rigidity of float glass is strong, and the demand side shows marginal improvement recently. Next year, the overall supply and demand of the industry may still be in tight balance. The downward space of unit profit of float glass is limited. Photovoltaic glass is expected to benefit from the recovery of the industrial chain, while electronic glass is expected to benefit from the large volume of new products such as domestic substitution and folding screen. 3) Cement is expected to benefit from the subsequent demand improvement expectation. In the medium and long term, the supply pattern is expected to continue to be optimized. 4) The demand side of glass fiber is driven by wind power, overseas and other downstream, the increment on the supply side is limited, and the leader may still have good growth in the medium and long term.
Investment advice
Medium and long term recommendations for consumer building materials Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Monalisa Group Co.Ltd(002918) , Asia Cuanon Technology (Shanghai) Co.Ltd(603378) , Skshu Paint Co.Ltd(603737) , Keshun Waterproof Technologies Co.Ltd(300737) , Beijing New Building Materials Public Limited Company(000786) , etc. Glass recommended Triumph Science & Technology Co.Ltd(600552) , CSG a, Zhuzhou Kibing Group Co.Ltd(601636) , Xinyi Glass, Flat Glass Group Co.Ltd(601865) (joint coverage with Dianxin), etc; Recommended cement Gansu Shangfeng Cement Co.Ltd(000672) , Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) ; Recommended China Jushi Co.Ltd(600176) , Sinoma Science & Technology Co.Ltd(002080) for glass fiber;
Risk tip: the demand for infrastructure and real estate fell more than expected, affecting the rising trend of cement and glass prices; The promotion of old reform and new urbanization was less than expected.
