Key investment points
This week (2022.3.7 – 2022.3.11, the same below): this week, the building materials sector (SW) rose or fell by - 2.92%. In the same period, the Shanghai and Shenzhen 3 million and wandequan a index rose or fell by - 1.06% and - 1.47% respectively, and the excess return was - 1.86% and - 1.45% respectively.
Fundamentals and high-frequency data of bulk building materials: (1) cement: the market price of high-standard cement in China this week was 515 yuan / ton, which was + 3 yuan / ton compared with last week and + 81 yuan / ton compared with the same period in 2021. Regions with higher prices than last week: Yangtze River Delta (+ 13 yuan / ton), Yangtze River Basin (+ 6 yuan / ton), East China (+ 7 yuan / ton), Central South (+ 13 yuan / ton), Southwest (+ 8 yuan / ton); Regions where prices fell: Pan Beijing Tianjin Hebei region (- 5 yuan / ton) and northwest region (- 18 yuan / ton). This week, the average cement warehouse location of national sample enterprises was 59.8%, which was -3.0pct compared with last week and -0.3pct compared with the same period in 2021. The average cement delivery rate (daily delivery rate / production capacity in process) of the national sample enterprises was 44.1%, which was + 8.9pct compared with last week and -2.4pct compared with the same period in 2021. (2) Glass: according to the statistics of Zhuo Chuang information, the average price of the national float white glass original sheet is 2384 yuan / ton, which is - 44 yuan / ton compared with last week and + 145 yuan / ton compared with the same period in 2021. According to the statistics of Zhuo Chuang information, the original film inventory of sample enterprises in 13 provinces in China was 50.72 million heavy boxes, up from + 4 million heavy boxes last week and + 22.12 million heavy boxes in the same period in 2021. (3) Glass fiber: the median turnover of alkali free 2400tex direct yarn was 6150 yuan / ton, the same as last week, and + 150 yuan / ton compared with the same period in 2021.
Zhou's view: the financial data in February were lower than expected, especially the negative growth of residents' medium and long-term loan balance, indicating that the relaxation of existing real estate policies is still insufficient. Under the pressure of centralized cashing in May and June, the speed of real estate construction will not be fast. In the short term, infrastructure needs to be strengthened to hedge against the economic downturn. For building materials, the credit expansion of physical demand and real estate chain formed by infrastructure projects may come in 1 ~ 2 quarters, and leading enterprises often take the lead in entering the expansion cycle. Last week, the "14th five year plan" for building energy conservation and green building development was issued, which requires to improve the performance of doors and windows, thermal insulation and other enclosure materials, and promote building photovoltaic, prefabricated construction and decoration. It is suggested to pay attention to Guangdong Kinlong Hardware Products Co.Ltd(002791) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Beijing New Building Materials Public Limited Company(000786) , Anhui Conch Cement Company Limited(600585) , China Liansu, etc.
In terms of bulk building materials: the broad monetary policy of steady growth is expected to be further strengthened, and the medium-term cement demand and profit are expected to be repaired. The social finance data in February was significantly lower than expected, mainly due to the weak medium and long-term loans of residents and enterprises, indicating that the effect of stable growth and wide credit has not been fully demonstrated. Under the annual economic growth target of 5.5%, the policy of stable growth is expected to be further strengthened. The recent improvement of cement demand is general, but the pace of policy bond issuance is significantly ahead. With the implementation and commencement of subsequent projects, the medium-term infrastructure demand is still strongly supported. In the short term, due to the good implementation of peak staggering, the overall level of clinker storage in China is low, and the cement storage level is in the middle but has begun to decline. The superposition enterprises have a strong mentality of raising prices to pass on costs. It is expected that the rhythm of price increase in this peak season will lead the rise of demand, and there is good price elasticity along the core markets such as the Yangtze River and the Pearl River Delta. Industry self-discipline + potential environmental protection and energy consumption constraints shrink the industry's supply capacity, the industry's capacity utilization is expected to remain high, and the profit center will remain medium to high. The dividend yield of 5 ~ 8% in 2021 makes the current valuation of 7 times P / E ratio have room for repair. It is suggested to focus on Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) and Gansu Shangfeng Cement Co.Ltd(000672) with strong performance certainty and bright spots in the extension of medium and long-term industrial chain, and Tangshan Jidong Cement Co.Ltd(000401) , Xinjiang Tianshan Cement Co.Ltd(000877) , Gansu Qilianshan Cement Group Co.Ltd(600720) , etc. that benefit from the integration of northern market and great business elasticity in the medium and long term.
Decoration and building materials: steady growth is expected to boost demand, and the sector valuation is expected to continue to repair under the relaxation of real estate chain policies and funds. The recent government work report mentioned "building key water conservancy projects", "accelerating the renewal and transformation of urban gas pipeline and other pipe networks", "continuing to recommend the construction of underground comprehensive pipe gallery", etc. we expect that the construction of underground pipe network and sponge city will bring sustainable increment during the 14th five year plan period. The completion end of the real estate remained resilient, but the new construction and sales remained weak. In terms of real estate, the easing signal has been gradually released. Previously, according to the financial Associated Press, the opinions on the supervision of national commercial housing pre-sale funds have been issued, and the supervision of pre-sale funds is expected to be improved. At the same time, the proportion of down payment has been reduced in many places on the credit side recently. However, the social finance data in February is lower than expected, and the policy effect is not clear. We expect that the follow-up real estate enterprises and consumer financing side are expected to continue to relax. Previously, the valuation of the decoration and building materials sector has been in the lower position of the historical center due to the slowdown in demand, the rise of raw materials and cash flow pressure. With the relaxation of expectations on the edge of real estate, the decline of high raw material costs, and the gradual release of bad debt provision and cash flow risk expectations, the overall sector is expected to usher in performance and valuation repair. Referring to the historical experience of the consumer building materials sector and the current competitive situation, in the stage of capital easing + confidence gradually recovering from the bottom of the real estate industry, some companies may take the lead to further increase their share and enter a new expansion cycle with the help of channel leading layout, operating efficiency advantage or financing plus leverage. The inflection point of shipment or order growth can be used as a signal on the right. To focus on the etc.
Risk warning: the epidemic situation exceeded expectations, the real estate credit risk was out of control, and the policy concentration exceeded expectations.
