Key investment points
Key events of this week: 1) the growth rate of social finance fell periodically and waited for the steady growth policy to continue: in February, social finance increased by 1.19 trillion, from more to less than 531.5 billion year-on-year; In February, the stock of social finance increased by 10.2% year-on-year, 0.3pct lower than that of the previous month. 2) The fourth round of cement price increase along the Yangtze River from March to September: 470 yuan / ton, according to the fourth round of cement price increase along the Yangtze River, and the fourth round of cement price increase along the Yangtze River from March to September. Reasons for price increase: first, the rise of sea freight and the high price of imported clinker; Second, with the recovery of market demand and local enterprises still stop kiln maintenance, the current clinker inventory is medium and low, which promotes the price to continue to rise. 3) Cement enterprises are expected to build a second growth curve by laying out emerging industries: Anhui Conch Cement Company Limited(600585) 22 year plan to invest 5 billion to develop new energy businesses such as photovoltaic power stations and energy storage projects Gansu Shangfeng Cement Co.Ltd(000672) joint stock company Hefei Jinghe Technology Innovation Board held a meeting. 4) The glass fiber leader announced that the profit increased sharply from January to February, and the roving boom continued: China Jushi Co.Ltd(600176) announced that the company operated at full capacity from January to February, with high production and sales rate, low inventory, steady rise in sales price, and the total profit increased by more than 60% year-on-year from January to February of 22. 5) Jiangsu Pacific Quartz Co.Ltd(603688) temporary shutdown due to epidemic situation: the company began to implement temporary shutdown of some production sections on March 11. Due to epidemic prevention and control, it will affect production and transportation in the short term, but will not affect the medium and long-term development of the company. Moreover, as Jiangsu Lianyungang Port Co.Ltd(601008) is the core supplier of high-purity quartz sand in China, it is expected that the supply and demand of high-purity quartz sand in the industry will be in short supply, and the price boom will increase. 6) Triumph Science & Technology Co.Ltd(600552) main business volume and price rose simultaneously, and the performance reached a record high: the company achieved revenue / net profit attributable to parent company of 6.32 billion / 160 million in 21 years, with a year-on-year increase of + 24.8% / + 30.4%. By product, the sales volume of the company’s new material products / new display products / new display material products was + 7.0% / + 9.9% / – 37.2% year-on-year.
This week’s view: at the current time, we suggest paying attention to the three main lines of building materials & new materials investment. One is the main line of undervaluation defense, with cement and gypsum board preferred (good cash flow and competition pattern); Boom is the main line of glass fiber / quartz, and carbon fiber / quartz is the second choice; Third, the main line of brand building materials (it is expected that the double killing of valuation and performance will basically end, waiting for the inflection point of real estate sales and cost changes). 1) Cement demand has gradually recovered. This week, the clinker price along the river has ushered in the fourth round of rise. In the short term, it is expected to grow steadily. Under the warming expectation, the excess return of the sector is prominent. The industry has high prosperity toughness in 22 years (focusing on the enhancement of supply side coordination), and industrial integration + extension in the medium and long term. 2) From the perspective of water reducing agent, capital construction pull + gross profit margin rise + functional materials open up growth space. 3) The price of float glass has dropped slightly. In the short term, it is mainly to digest social inventory. In the follow-up, with the continuation of demand toughness, the price is still expected to maintain a good level; There is still price elasticity at the bottom of the photovoltaic glass cycle. We are optimistic about the adverse expansion and cost competitiveness of leading enterprises, and focus on the profit elasticity and long-term growth brought by the expansion of traditional glass into the photovoltaic glass field. 4) Brand building materials enter the strategic allocation time point. In terms of real estate, policy marginal relaxation + increased demand for affordable housing with non real estate developers as the main body, and the demand of the real estate chain is expected to gradually pick up (the end of real estate demand is expected to correspond to 2022q1). We believe that the expected bottom of the real estate corresponds to the bottom of the valuation of brand building materials (refer to the resumption in 2014 / 18, and this round corresponds to 2021q4). The double repair of the performance and valuation of brand building materials in 22 years is worth looking forward to. The leaders of each subdivision track have long interpreted the main logic of improving the concentration. The frequent repurchase, incentive and increase of industrial funds highlight the confidence of enterprises and have channels, brands Enterprises with excellent endowments such as capital and management have high certainty. 5) In the field of new materials, carbon fiber / high-purity quartz sand / electronic cover glass ushered in the industrial opportunity of high demand + domestic alternative resonance, and UTG welcomed the outbreak of demand. 6) The glass fiber cycle is weakened, the roving boom is expected to continue (wind power, automobile and other strong support for demand), the price of electronic cloth has fallen to the bottom range, and the current safety margin is high.
Under the expected warming of steady growth, the cost performance of cement sector allocation is prominent. This week, we released an in-depth report Gansu Shangfeng Cement Co.Ltd(000672) : leading profitability in the industry, “one main body and two wings” can be expected to grow. The core points are: 1) the company has the logic of volume growth and has the growth potential of industry scarcity; 2) The cost control ability is leading in the industry, and roe ranks first in the industry; 3) Aggregate and environmental protection are expanding rapidly, and investment in emerging industries is expected to gradually contribute income. Through the resumption of trading, we found that the cement sector can achieve about 10% excess return in each round of stable growth policy setting and data window period. The economic data verification period showed a volatile trend, and the fundamentals verification period was highly related to performance. At present, it is an important layout time point after setting the tone of steady growth. The cement sector is expected to continue to benefit from the expected warming. In addition, the fundamentals will also have better support to determine its continuity: we believe that although there is a small single digit decline in demand in 22 years, it is expected to remain at a high platform period of more than 2 billion tons. Under the contraction of demand, the willingness of enterprise supply coordination is expected to increase, and the coal price center is expected to move down compared with 2021. Industry integration will accelerate the optimization of pattern, and leading enterprises will actively layout aggregate Commercial and mixed markets contribute to growth, and the cost performance is prominent under the low valuation. This week, the national cement market price started an upward trend, with a month on month increase of 0.5%. In the first ten days of March, the demand of China’s cement market maintained a slow increase, and the shipment rate of enterprises in different regions increased by 10% – 20% month on month. The demand in the south basically recovered to 70-80%, while in the north, limited by the low temperature and the recurrence of the epidemic, it was only 2-40%. In terms of price, with the gradual increase of market demand and driven by the rising costs of coal, oil price and freight, the price of cement in many places shows an upward trend. This week, the national storage capacity ratio was 60.6%, with a month on month ratio of -3.4pct, a year-on-year increase of + 0.9pct; The shipment rate was 57.1%, with a chain comparison of + 10.5pct and a year-on-year comparison of + 2.1pct. It is recommended to focus on Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) , Gansu Shangfeng Cement Co.Ltd(000672) , Guangdong Tapai Group Co.Ltd(002233) , and it is recommended to focus on Chinese building materials, Xinjiang Tianshan Cement Co.Ltd(000877) , Jiangxi Wannianqing Cement Co.Ltd(000789) .
Continue to focus on recommending the leader of China’s concrete water reducing agent industry Sobute New Materials Co.Ltd(603916) Sobute New Materials Co.Ltd(603916) recommendation logic: the company’s production capacity planning is clear, and it is expected to continue to grow in the next three years, with a rising market share; The price of raw material ethylene oxide is running at a low level. At the end of September, the price increase of the company is gradually implemented, and the gross profit margin in 22 years may increase significantly; The company’s functional materials (such as anti crack and anti-seepage agent, wind power grouting material, etc.) maintain a high growth, and is expected to grow into an admixture platform enterprise.
Building glass prices continued to fall; The price of photovoltaic glass has stabilized. The average price of float glass this week was 2384 yuan / ton (Mom – 44, yoy + 147); Weekend inventory of 50.72 million heavy containers (mom + 400, yoy + 2212); The production capacity of glass in production is 173000 T / D (Mom – 0.1). This week, China’s float glass market is weak, with regional differences. During the week, the price in the northern region was further reduced. After the reduction, the shipment improved significantly and the outward delivery was relatively smooth. Prices in some regions of the southern region have fallen, the adjustment range is relatively small, and the market is still on the sidelines. In the later stage of the market, the overall supply and demand pattern is temporarily weak, and attention is paid to the order receiving situation of downstream processing plants and the digestion of social inventory.
We believe that under the “guaranteed delivery” of real estate, the toughness of glass demand is expected to be maintained. On the supply side, considering the high capacity utilization rate of the industry, the subsequent new capacity is limited; In addition, at present, in the production line, the proportion of kiln age production capacity of 8-10 years / 10-12 years / more than 12 years is 13.2% / 8.3% / 5.9% respectively. Cold repair of the old production line may lead to supply contraction. We expect the glass price to remain at a good level throughout the year. In terms of photovoltaic glass, the mainstream quotation of 3.2mm coating at the end of this week was 26 yuan / square (the same month on month, year-on-year – 35%); Inventory days are about 22.4 days (mom + 2%, yoy + 5%); The production capacity in process is 44000 T / D (unchanged month on month, year-on-year + 29%). For photovoltaic glass, the new supply under the dual control of energy consumption may be less than expected, and the price at the bottom of the industrial cycle may be upward elastic. Optimistic about the revenue proportion of traditional glass enterprises in the field of photovoltaic glass and improve their cost competitiveness. Continue to focus on recommending Zhuzhou Kibing Group Co.Ltd(601636) , and suggest paying attention to Xinyi Glass, Csg Holding Co.Ltd(000012) , Shandong Jinjing Science And Technology Stock Co.Ltd(600586) , Luoyang Glass Company Limited(600876) , etc; At the same time, we continue to recommend photovoltaic glass leading Xinyi solar energy and Flat Glass Group Co.Ltd(601865) .
Brand building materials: under the pressure of the industry, the most difficult time for brand building materials has passed, and the leader welcomes light loading + counter trend expansion. 1) Since 21q4, “bottom of real estate policy + broad real estate market (affordable housing)” + landing of credit risk + stabilization and decline of raw material prices, and the expected bottom of brand building materials has been established. 2) From the 14-year and 18-year recovery, the expected bottom of the real estate corresponds to the bottom of the valuation of brand building materials. 3) Leading enterprises have strengthened their competitiveness and highlighted their growth (category expansion and application expansion) during the pressure period of the industry. The credit impairment of major enterprises has been implemented in 21 years, and the performance and valuation are expected to be restored in 22 years. The leading enterprises of brand building materials have advantages in terms of brand / Channel / cost / capital. They have the ability to cross the cycle in terms of competitiveness and growth, and take the lead in highlighting the encirclement, seizing the leading position and actively arranging the leaders in the process of building the bottom. We recommend Beijing New Building Materials Public Limited Company(000786) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Guangdong Kinlong Hardware Products Co.Ltd(002791) , Keshun Waterproof Technologies Co.Ltd(300737) , ad shares, Monalisa Group Co.Ltd(002918) Zhejiang Weixing New Building Materials Co.Ltd(002372) , Skshu Paint Co.Ltd(603737) , Guangdong Dongpeng Holdings Co.Ltd(003012) , Wangli Security & Surveillance Product Co.Ltd(605268) , Asia Cuanon Technology (Shanghai) Co.Ltd(603378) , it is suggested to pay attention to China Liansu, Jiangsu Canlon Building Materials Co.Ltd(300715) , D&O Home Collection Co.Ltd(002798) .
New materials: 1) carbon fiber boom continues: at the end of this week, the average price of carbon fiber market was 187000 yuan / ton (flat month on month, year-on-year + 3.2), the average price of large tow was 147000 yuan / ton (flat month on month, year-on-year + 1.7), and the average price of small tow was 225000 yuan / ton (flat month on month, year-on-year + 4.5); At the weekend, the inventory of carbon fiber factory was 12 tons (Mom-1, yoy-6). The raw material acrylonitrile market rose slightly, and the price of precursor remained high. We believe that the investment logic of the civil carbon fiber industry lies not only in the high demand growth (wind, light, hydrogen, etc.), but also in the “favorable climate, favorable location and harmonious people”. After seizing the opportunity to catch up, we will further expand the scale and cost advantage and realize the historical opportunity of “domestic substitution” and transcendence. Under the barriers of high technology, technology and capital, those who win the “raw silk” win the world. In the medium and long term, with reference to glass fiber, the industry penetration can be improved or rely on “price” for “demand”. We suggest paying attention to the carbon fiber leader Zhongfu Shenying (to be listed), Weihai Guangwei Composites Co.Ltd(300699) , precursor leader Jilin Carbon Valley, Jilin Chemical Fibre Co.Ltd(000420) , Sinofibers Technology Co.Ltd(300777) , Hengshen shares; Carbon fiber equipment manufacturer Zhejiang Jinggong Science & Technology Co.Ltd(002006) ; Downstream composite manufacturers Sinoma Science & Technology Co.Ltd(002080) , Kbc Corporation Ltd(688598) , Beijing Tianyishangjia New Material Corp.Ltd(688033) , Hongfa new materials, etc. 2) For the quartz glass industry, benefiting from the growth of photovoltaic installed capacity / the transformation of photovoltaic cells from p-type to n-type, the demand for high-purity quartz sand is growing rapidly, the supply side is newly added or limited, and the supply and demand is expected to maintain a tight balance; The demand for semiconductor and military quartz materials is booming, and the barriers to qualification certification are high. Leading enterprises are expected to continue to increase the market share. Jiangsu Pacific Quartz Co.Ltd(603688) and Hubei Feilihua Quartz Glass Co.Ltd(300395) . 3) Electronic cover glass: Chinese enterprises have made technological breakthroughs and passed the downstream certification. Under the condition of improving the penetration rate of domestic mobile phones and ensuring the safety of the supply chain, domestic substitution is accelerated. It is suggested to pay attention to realizing the iterative breakthrough of electronic cover technology and complete the Csg Holding Co.Ltd(000012) . 4) UTG: the penetration acceleration of folding screen mobile phones + alternative CPI trend is obvious, and the demand welcomes the outbreak; Take the lead in realizing technological breakthrough and benefiting mass production enterprises. It is suggested to pay attention to Triumph Science & Technology Co.Ltd(600552) .
Glass fiber: the industry cycle is weakened and the boom is expected to continue. This week, the average price of 2400tex winding direct yarn was 6100 yuan / ton (the same month on month, year-on-year – 17); The average price of electronic yarn G75 is 10050 yuan / ton (unchanged month on month, year-on-year – 4850); The mainstream price of electronic cloth is 3.7 yuan / meter (mom -0.15). We expect that the new capacity of the industry will be limited in 22 years, with roving / electronic yarn of about 42 / 100000 tons respectively, and the production line will be put into operation more dispersed. We expect the marginal new capacity of 22q1-22q4 to be 1.7/1.7/3.313000 tons / quarter respectively, with a relatively mild impact. We expect that the global effective production capacity / demand of glass fiber in 22 years will be 9.36/9.43 million tons respectively. The supply and demand are in tight balance. Under the low inventory, the price boom is expected to continue. The energy cost of glass fiber accounts for about 20%, and the energy consumption is still high. Under the dual control of energy consumption, it is more difficult to increase the new capacity of the industry, and the uncertainty of landing rhythm increases. We believe that the new production capacity will still be dominated by leading enterprises, and the industry pattern is expected to continue to be optimized. The leading enterprises have core competitiveness such as cost and technology, and the continuous upgrading of product structure will hedge the periodicity to a certain extent. The competitiveness of the leading enterprises in the glass fiber industry is significantly enhanced, whether from the perspective of increasing market share or continuous decline of cost. We expect that the profit of the bottom leading enterprises in the next round is expected to increase significantly compared with history. We continue to focus on recommending glass fiber leading enterprises China Jushi Co.Ltd(600176) , Sinoma Science & Technology Co.Ltd(002080) Jiangsu Changhai Composite Materials Co.Ltd(300196) Shandong Fiberglass Group Co.Ltd(605006) 。
Risk warning: macroeconomic downside risk; Demand is lower than expected; Excessive new capacity; Poor capital turnover.
