Key investment points
This week (2022.3.7 – 2022.3.11, the same below): this week, the architectural decoration sector (SW) rose or fell by - 2.74%. 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 - 1.68% and - 1.27% respectively.
Important policies, event changes and data tracking comments of the industry: (1) the Ministry of housing and urban rural development issued the "14th five year plan" for building energy conservation and green building development. The plan puts forward the development goals of energy conservation and green buildings during the 14th Five Year Plan Period: increase the energy efficiency level of new residential / public buildings in cities and towns by 30% / 20%, complete the energy-saving transformation of existing buildings, with an area of more than 350 million square meters, and build ultra-low energy consumption and near zero energy consumption buildings of more than 50 million square meters. Among them, "prefabricated buildings accounted for 30% of new buildings in cities and towns in that year, the installed capacity of Cecep Solar Energy Co.Ltd(000591) photovoltaic in new buildings nationwide was more than 50 million KW, the building application area of geothermal energy was more than 100 million square meters, and the proportion of power consumption in building energy consumption exceeded 55%". The expected objectives are that this plan is new compared with the 13th five year special plan, It reflects that renewable energy substitution is an important direction for the development of energy conservation and green buildings in the 14th five year plan, which is expected to accelerate the promotion of building photovoltaic. The plan also clearly proposes to promote new green construction methods, including "encouraging hospitals, schools and other public buildings to give priority to steel structure buildings, actively promoting prefabricated concrete buildings in commercial housing and affordable housing" and "actively developing prefabricated decoration", which is conducive to accelerating the application and promotion of prefabricated construction and decoration. (2) The people's Bank of China released financial data for February: in February, RMB loans increased by 1.23 trillion yuan, a year-on-year decrease of 125.8 billion yuan, and the increment of social financing scale was 1.19 trillion yuan, a year-on-year decrease of 531.5 billion yuan. The financial data in February was 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 centralized cashing pressure of real estate enterprises in May and June, the repair of real estate investment is still limited. In the short term, infrastructure needs to be strengthened to hedge against the economic downturn, and the broad monetary steady growth policy is expected to be further strengthened.
Zhou viewpoint
We suggest focusing on investment opportunities in the construction sector from the following three directions:
1) steady growth continues to increase, and we are optimistic about the valuation repair opportunities under the recovery of infrastructure chain boom: the financial 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 steady growth and wide credit has not been fully demonstrated. Under the annual economic growth target of 5.5%, the policy steady growth is expected to be further strengthened. We believe that the boom recovery of infrastructure investment demand is sustainable. We suggest paying attention to the continuous repair opportunities for the valuation of leading infrastructure enterprises with historically low valuation and stable performance. We suggest paying attention to China Railway Group Limited(601390) , China Railway Construction Corporation Limited(601186) , China Communications Construction Company Limited(601800) , Jsti Group(300284) , etc.
2) there are bright spots in the demand structure and investment opportunities under the incremental development of new businesses: with the promotion of policies such as double carbon strategy and green and energy-saving buildings, the prosperity of fabricated buildings, energy conservation and carbon reduction and infrastructure segments related to new energy is high, and enterprises with relevant transformation layout are expected to benefit. Last week, the 14th five year plan for building energy efficiency and green building development was issued, which proposed to promote building photovoltaic, prefabricated construction and decoration. It is suggested to pay attention to Anhui Honglu Steel Construction(Group) Co.Ltd(002541) , Shenzhen Capol International&Associatesco.Ltd(002949) , Zhejiang Yasha Decoration Co.Ltd(002375) , China Railway Prefabricated Construction Co.Ltd(300374) ; Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) , China Energy Engineering Corporation Limited(601868) , etc. of new energy business transformation and incremental development; Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , Center International Group Co.Ltd(603098) , Zhejiang Southeast Space Frame Co.Ltd(002135) and others benefiting from the large volume of building photovoltaic market, and Jiangxi Geto New Materials Corporation Limited(300986) and other leasing service providers of green building materials (aluminum formwork).
3) reform direction of state-owned enterprises: 2022 is the end of the three-year action of state-owned enterprise reform. It is expected that while the reform of state-owned enterprises is advancing steadily, the previous reform dividends in corporate governance structure, strengthening incentives, mixed reform and improving efficiency and stimulating vitality are expected to enter the release period. It is suggested to pay attention to the improvement of performance under cost reduction and efficiency increase For new business transformation layout and asset restructuring, it is recommended to pay attention to Sichuan Road & Bridge Co.Ltd(600039) , Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) , Shandong Hi-Speed Road&Bridge Co.Ltd(000498) , Metallurgical Corporation Of China Ltd(601618) , etc.
Risk tips: the epidemic situation exceeded expectations, the real estate credit risk was out of control, the policy concentration exceeded expectations, and the progress of state-owned enterprise reform was lower than expected.
