Review of the market of building materials sector in 2021: in the whole year of 2021 (as of December 31, 2021), the building materials sector increased by 4.46%, outperforming the Shanghai and Shenzhen 300 index by 9.66 percentage points, ranking 14th among the 28 Shenwan industries, and the growth of refractory (+ 52.84%), glass (+ 24.97%) and glass fiber (+ 16.62%) in the subdivided sectors was higher.
Cement: supply and demand maintain a weak balance, and the profit center is expected to move up. Pay attention to regional differentiation and independent market. In 2022, the regional differentiation of cement market will further increase. Since September 2021, the price of cement will rise, especially in East China and Central South China. The prosperity of the industry is more obvious than that in Northwest and Northeast China. From the perspective of investment, it is suggested to give priority to the leaders in East and South China with high concentration, strong demand and good supply and demand pattern.
Glass: float supply and demand are in tight balance, and deep processing boosts demand. In 2021, the prosperity of float glass is high before and low after. In the first half of 2021, the prosperity of glass industry will maintain a high prosperity in 2020; From September 2021, affected by the downstream real estate market, the market sentiment was pessimistic, and the price of float glass continued to decline and stabilized in December 2021. We believe that the low price of float glass will become an important catalyst for the recovery of the market in 2022, supported by the rigid demand for toughness at the completion end.
Glass fiber: high prosperity continues and growth is accelerated. Since 2020q3, the prosperity of the glass fiber industry has entered the upward channel and continued to this day. In 2021, the glass fiber price has been at a high level throughout the year. In 2022, under the situation that downstream demand continues to be strong and supply is still tight, glass fiber prices are expected to continue to be high in 2021. In the medium term, the marginal impact on the capacity of the glass fiber supply side in the next 1-3 years is limited, and more production lines enter cold repair, and the glass fiber supply and demand pattern will be further optimized.
Consumer building materials: focus on high-quality leaders and embrace high-quality growth. Looking forward to 2022, the real estate is expected to maintain stability, the increase of demand side is limited, and the consumption of building materials is facing the game of stock market. After the pressure period in 2021, it is expected that the small and medium-sized enterprises with backward production capacity and relatively poor channels may accelerate the liquidation, and the market concentration of consumer building materials will increase in 2022, with strong certainty. At present, the valuation of some leading consumer building materials enterprises has been lower than the valuation center in recent one year, which is at a relatively low point and has a high cost performance. It is suggested to find leading consumer building materials enterprises with high-quality growth from the perspectives of revenue quality, profit quality and cash flow.
Key recommended targets: Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Sobute New Materials Co.Ltd(603916) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Anhui Conch Cement Company Limited(600585) , China Jushi Co.Ltd(600176) .
Risk tip: there is a risk of macroeconomic downturn and a sharp decline in the growth rate of infrastructure and real estate investment; Price fluctuation risk of raw materials and bulk commodities; Industry competition intensified and market concentration improved less than expected.
