Building materials sector and CSI 300 index callback synchronously. The building materials index fell 4.2% this week, basically synchronized with the Shanghai and Shenzhen 300 index; The construction index fell 2.5%, outperforming the CSI 300 index by 1.7 percentage points. We believe that the main reasons for the decline of the sector are: 1) the social finance data (Social Finance 1.19 trillion yuan, expected 2.22 trillion yuan; new RMB loans 1.23 trillion yuan, expected 1.45 trillion yuan) are lower than expected, which reflects that the overall demand is still weak except for the infrastructure end; 2) the cost of raw materials still shows a rapid upward trend, and the market's profit expectation for some companies is further weakened, 3) With the escalation of external conflicts, the overall risk appetite of the market is weakened. We believe that under the background of less than expected social finance in February, the short-term market risk aversion may rise, and the undervalued targets may be more favored. However, for the whole year, the targets with clear growth logic and supported performance are still needed.
The 14th five year plan is released, and the construction of photovoltaic and fabricated buildings may be further accelerated. This week, the Ministry of housing and urban rural development issued the 14th five year plan for building energy conservation and green building development. It is planned that by 2025, the installed capacity of Cecep Solar Energy Co.Ltd(000591) photovoltaic will be more than 50gw, corresponding to more than 10GW per year. Prefabricated buildings account for 30% (2018: 9.1%) of the new urban construction area in that year, and the energy-saving transformation area of existing buildings will be more than 350 million square meters, Corresponding to the annual transformation of more than 70 million square meters. We believe that three types of targets benefit: steel structure: BIPV roof has rich customer resources and better understanding of building structures. At the same time, the penetration of prefabricated buildings is improved, which is good for the demand of steel structure Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , Zhejiang Southeast Space Frame Co.Ltd(002135) , Hangxiao Steel Structure Co.Ltd(600477) , Anhui Fuhuang Steel Structure Co.Ltd(002743) , Anhui Honglu Steel Construction(Group) Co.Ltd(002541) and other companies with customer resources and corresponding construction qualifications benefit from the industry.
Photovoltaic glass: building photovoltaic further promotes the demand for photovoltaic glass Flat Glass Group Co.Ltd(601865) , Xinyi solar energy, Shandong Jinjing Science And Technology Stock Co.Ltd(600586) , Csg Holding Co.Ltd(000012) , Changzhou Almaden Co.Ltd(002623) , Zhuzhou Kibing Group Co.Ltd(601636) , etc.
Waterproof: building photovoltaic needs TPO waterproof coiled material and corresponding construction. It is difficult for small waterproof enterprises dominated by non-standard products to enter, and the leading enterprises will become the main participants in the market Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Keshun Waterproof Technologies Co.Ltd(300737) , Jiangsu Canlon Building Materials Co.Ltd(300715) benefits.
Focus on the C-end anti inflation target under cost pressure. Under the influence of geopolitics, the cost of raw materials has increased significantly recently, squeezing the gross profit margin. Considering the price factor, the price adjustment window of b-end enterprises is usually at the end of the year, and the bargaining power is relatively weak, while the price adjustment of C-end enterprises is usually more flexible and effective; Considering the cost side, at present, the prices of asphalt, metal and titanium dioxide are still close to or higher than the high point in 2021, and the relevant cost pressure is expected to be still large. Compared with the high point in 2021, the prices of raw materials such as PVC and PPR have been callback by more than 10%, and the relevant cost pressure may be relieved compared with 2021h2. It is suggested to pay attention to 2022q1 and the over expected opportunities in the whole year from the two dimensions of price and cost Zhejiang Weixing New Building Materials Co.Ltd(002372) , Dehua Tb New Decoration Material Co.Ltd(002043) and other industries benefited.
Steady growth continued throughout the year, with Shandong Hi-Speed Road&Bridge Co.Ltd(000498) . The newly increased coverage is Shandong Hi-Speed Road&Bridge Co.Ltd(000498) . According to the relevant transportation planning of Shandong Province, during the 14th Five Year Plan period, Shandong is expected to add 555 / 505 / 140 kilometers of Railways / expressways / rail transit mileage every year, all of which are in the forefront of the country. The financial expenditure of transportation in Shandong Province accounts for 3.3% of the general public budget expenditure, which is lower than the national average of about 5%, reflecting that there is better room for the financial side, Therefore, we believe that infrastructure investment in Shandong will maintain stable growth during the 14th Five Year Plan period. By the end of 2021, the company had outstanding orders of 96.87 billion yuan, equivalent to 2.8 times the volume of revenue in 2020, further improving the certainty. We believe that the company is the subject of steady growth, with low valuation and cost performance.
Risk warning: the demand is lower than expected, the cost is higher than expected, and there is systemic risk.
