The completion of real estate is tenacious, the usage per unit area continues to increase, and the glass demand in 22 years is not pessimistic: about 75% – 80% of China’s flat glass demand comes from real estate, and the apparent glass consumption and the completed area of real estate in 2021q1-3 are yoy + 7.9% / 23.4% respectively. Although there are differences in data, they rebound significantly compared with the average of 20 years. The above two data in 20 years are yoy + 3.1% / – 4.9%. In the whole year of 21, we expect that the consumption of glass will continue the trend of the first three quarters. Although the real estate developers have partially affected the delivery progress due to the shortage of funds, and the glass peak season is not prosperous in single Q3, the demand rate of this part will probably be released in 22 years. Another important reason why we are not pessimistic about the demand for glass in 22 years is that it takes about 3 years for the data transmission of real estate from new construction to completion. The new construction of real estate has increased year-on-year from May 15 to October 18. Theoretically, the year-on-year data of real estate completion should continue to rise from May 18 to October 21. In fact, except that the rising point of completion data is delayed for half a year, the latter is basically consistent with the theory. Referring to the gradual decline in the growth rate of new construction in 19 years, we judge that the toughness of the completed area of real estate in 22 years is still the same. The third favorable factor for demand comes from the increase in the amount of glass per unit area. In addition to more buildings using multi-storey energy-saving glass, the glass opening area of residential / commercial buildings is also increasing. In the past three years (18-20 years), the apparent glass consumption yoy + 11.7% / + 8.9% / + 3.1% has been higher than the completed area yoy + 7.8% / + 2.6% / – 4.9% for a long time. We think this factor has begun to play a role.
Market review this week: this week (2021 / 12 / 27-2021 / 12 / 31), the building materials sector (CITIC) index increased by 1.4%, which was 1.0% relative to the excess return of CSI 300. Year to date, the yield of the building materials sector is 9.4%, compared with the excess yield of CSI 300 is 14.6%. Last week, the yield of the preferred portfolio was 1.8%, compared with the excess yield of the building materials index was 0.4%, and the cumulative yield / excess yield was 0.4% / 1.1%.
Overview of weekly data of building materials: the average price of float glass in China this week was 109.07 yuan / weight box, down 1.5% month on month and 2.6% year-on-year. The inventory was 35.17 million weight boxes, up 3.7% month on month. This week, the average price of national mainstream winding direct yarn was 6275 yuan / ton, down 0.8% month on month; The average price of electronic yarn was 14575 yuan / ton, the same as last week. The average transaction price in the national cement market this week was 540 yuan / ton. The cement delivery rate decreased by 5pct to 48% month on month, and the storage capacity increased by 0.3pct to 63.2% month on month.
Production capacity of glass / glass fiber in December: 1 / 3 pieces of glass resumed production / cold repair in December, 261 pieces were in production by the end of December, with a daily melting capacity of 172600 tons, a decrease of 1950 tons / day compared with the end of November; A new glass fiber production line, with an annual production capacity of 6.018 million tons, an increase of 60000 tons compared with the end of November.
From the perspective of security, it is recommended that Zhuzhou Kibing Group Co.Ltd(601636) (601636, buy), Csg Holding Co.Ltd(000012) (000012, buy), China Jushi Co.Ltd(600176) (600176, buy). From an offensive point of view, recommend Jiangsu Pacific Quartz Co.Ltd(603688) (603688, buy). In addition, it is recommended to focus on Zhejiang Weixing New Building Materials Co.Ltd(002372) (002372, not rated) and Fujian Kuncai Material Technology Co.Ltd(603826) (603826, not rated).
Risk statement
The growth rate of infrastructure / real estate investment did not meet expectations, and the price of raw materials fluctuated sharply
