Key investment points:
On March 5, the “two sessions” were held in Beijing. In the government work report, the expected growth target of China’s GDP this year was 5.5%, mainly considering stabilizing employment, ensuring people’s livelihood and preventing risks. The macro policy documents were effective, and the proactive fiscal policy and prudent monetary policy were implemented. The deficit ratio is planned to be arranged at 2.8%, and the special debt of local governments is 3.65 trillion yuan. It is required to start the construction of a number of major projects, new infrastructure and the transformation of old public facilities, so as to ensure the goal of “steady growth”. We give the industry a “recommended” rating.
As of March 1, 2022, 96755884 billion yuan of special bonds of local governments had been added nationwide, nearly doubling from 484.4 billion yuan in January. Superimposed with the carry over amount, a total of 1.07 trillion yuan of special bonds had been issued. In 2022, the special debt is mainly invested in new and old infrastructure such as energy, urban and rural cold chain logistics infrastructure, promoting the formation of physical workload and becoming the starting point of “steady growth”. According to the data of the Ministry of finance, the total investment in the whole infrastructure sector accounted for 67% of the new special bonds in January. It is expected that from March to April, it will continue to consolidate and support economic growth. Focus on China Energy Engineering Corporation Limited(601868) , China Communications Construction Company Limited(601800) , Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) .
The “two sessions” maintained the expression of “no speculation in housing”, and focused on developing the long-term rental housing market and promoting the construction of affordable housing, so as to support the commercial housing market to better meet the reasonable needs of buyers, and implement policies for the city to promote the virtuous circle and healthy development of the real estate industry. At the same time, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, also made it clear recently that the real estate industry should “transform smoothly”. This view has a strong “wind vane” meaning, or indicates that the “real estate warm wind” at all levels of the central government will continue to be released this year. Focus on China State Construction Engineering Corporation Limited(601668) , which has developed rapidly in real estate business.
In the interview, several representatives of the “two sessions” put forward opinions and suggestions on the officially launched trading of China’s carbon emission right market. These opinions and suggestions mainly focus on expanding carbon emission trading to include industries and launching carbon futures trading. In addition to the power industry as the first pilot, industries with high carbon emissions such as steel, nonferrous smelting and building materials will be included in the scope of carbon emission trading in turn. For iron and steel, building materials and other industries, the low energy consumption and carbon capture technology owned by its leading enterprises will become an important force to promote carbon neutralization in the industry. Recommend Sinoma International Engineering Co.Ltd(600970) , focus on Sinosteel Engineering & Technology Co.Ltd(000928) , Metallurgical Corporation Of China Ltd(601618) .
BIPV is an important development direction of green buildings. Prefabricated buildings are in line with the development direction of green buildings. The central government and provinces and cities continue to issue policies to promote the penetration of prefabricated buildings. The aging trend of construction workers is obvious, and the labor cost is also increasing. Prefabricated buildings have obvious advantages over traditional cast-in-place buildings in terms of labor cost. Focus on Anhui Honglu Steel Construction(Group) Co.Ltd(002541) , Hangxiao Steel Structure Co.Ltd(600477) , Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , and Yuanda residential workers.
Risk warning: focus on the company’s performance less than expected; The implementation of policies in the real estate industry is less than expected; The growth rate of special bond issuance and infrastructure investment recovered less than expected; The price of raw materials continues to rise; The epidemic repeated or lasted longer than expected; Adverse changes have taken place in the macro environment.
