Investment advice
We reiterate once again: the logic of steady growth remains unchanged, and we will actively layout the early callback of central construction enterprises.
In 2022, the target economic growth rate is set at 5.5% and the unemployment rate is controlled within 5.5%. The above indicators are at the upper limit of market expectations. From January to February, the economic data made a good start. The fixed investment in infrastructure, real estate and manufacturing increased by 8.1%, + 3.7% and + 20.9% year-on-year. As a means of steady growth, ensuring people's livelihood, relatively efficient and low "side effects", the capital development force was also steadily realized at the capital side and project side: as of March 13, the annual cumulative issuance of local special bonds was 0.97 trillion yuan, and 20 provinces issued investment plans for major projects in 2022, The total investment exceeded 11 trillion yuan, a year-on-year increase of 29.7%; Focus on:
1) preferred central enterprises of new energy construction: China Energy Engineering Corporation Limited(601868) , Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) . The world's top 2 energy and power construction enterprises have deeply benefited from the "double carbon" strategy. The order growth rate of new infrastructure projects is expected to exceed expectations, the pace of new energy investment and construction is expected to exceed expectations, and the performance of the 14th five year plan is high and the growth is determined to be strong.
2) pay attention to traditional infrastructure central enterprises: China Railway Construction Corporation Limited(601186) , China Railway Group Limited(601390) , China Communications Construction Company Limited(601800) , Metallurgical Corporation Of China Ltd(601618) . The core target of steady growth is the strategic layout of "large municipal administration" and "large urban construction", which is expected to fully benefit from urban renewal, people's livelihood and urban agglomeration construction.
The "14th five year plan" green building plan was released, focusing on BIPV, steel structure and building energy conservation. On March 11, the Ministry of housing and urban rural development issued the 14th five year plan for building energy conservation and green building development, which requires:
1) during the "14th five year plan" period, the installed capacity of photovoltaic in new buildings is 50gw. Far exceeding the target value of 10GW in the 13th five year plan. We estimated in the external report on November 30, 2021 that the total market for installing bapv in existing buildings is about 960 billion yuan, and the photovoltaic market space of new buildings is expected to exceed 83 billion yuan / year. It is recommended to pay attention to the installation and operation of photovoltaic glass. Objects of concern: Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , Zhejiang Southeast Space Frame Co.Ltd(002135) , Jangho Group Co.Ltd(601886) , Tus-Design Group Co.Ltd(300500) , Center International Group Co.Ltd(603098) , Zhuzhou Kibing Group Co.Ltd(601636) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) .
2) vigorously develop steel structure buildings. Encourage hospitals, schools and other public buildings to give priority to steel structure buildings, actively promote the construction of steel structure residential and rural houses, and improve the performance and technical measures such as fire prevention and anti-corrosion of steel structure buildings. Object of concern: Anhui Honglu Steel Construction(Group) Co.Ltd(002541) , Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , Anhui Fuhuang Steel Structure Co.Ltd(002743) , Zhejiang Southeast Space Frame Co.Ltd(002135) .
3) key projects to improve the energy-saving standards of new buildings. By 2025, more than 50 million square meters of ultra-low energy consumption and near zero energy consumption building demonstration projects will be built. High performance doors and windows promotion project. Object of concern: Luyang Energy-Saving Materials Co.Ltd(002088) , Asia Cuanon Technology (Shanghai) Co.Ltd(603378) , Skshu Paint Co.Ltd(603737) .
Downstream: infrastructure investment + 8.1% year-on-year, urban investment bond issuance - 1.7% year-on-year
Capital side: in February, the M2 balance was 244.2 trillion yuan, and the new social finance was 1.19 trillion yuan. The issuance rhythm of special bonds in February was much ahead of the same period last year, and the urban investment bonds decreased by 1.7% year-on-year.
Year on year total investment in capital construction + 12.8%.
(1) real estate: from January to February, the cumulative investment in real estate development was + 3.7% year-on-year, and the area of land acquisition and sales continued to decline;
(2) capital construction: from January to February, the cumulative capital construction investment (excluding power) was + 8.1% year-on-year;
(3) industry: from January to February, the cumulative fixed asset investment in manufacturing and mining industry was + 20.9% and + 21.1% year-on-year.
Demand side: PMI of construction industry rose to 57.6% in February.
Infrastructure: major projects: as of March 13, 20 provinces have released the investment amount of major projects in 2022, with a total investment of more than 11 trillion, and the total investment of comparable provinces increased by 29.7% year-on-year.
Upstream: in February, the price of cement and glass increased by + 2.4% and - 2.2% month on month, and the price of steel decreased slightly
Building materials: on March 14, the comprehensive index of building materials was 169.57 points, with a month on month ratio of - 0.3%, which was + 6.4% compared with the same period of 21 years; Cement and glass price indexes were + 2.4% and - 2.2% month on month, respectively.
Retail sales of building materials: from January to February, the cumulative retail sales of construction and decoration materials reached 24.5 billion yuan, an increase of 6.2% year-on-year. Steel: on March 15, the unit prices of rebar, medium sector, high-speed wire and round steel decreased by 1.7%, 0.6%, 1.5% and 1.0% month on month respectively.
Construction equipment: the sales volume of excavators in January decreased by 48.3% year-on-year, and the operating hours in February increased by 9.2% year-on-year. Aluminum alloy temsector: in February, the PMI of aluminum alloy temsector development index was 40.4%, up 8.8pct month on month, of which the production index increased 22.1pct to 35.7% month on month, and the new order index increased 8.6pct to 39.3% month on month.
Assembled sector tracking
Policy: on March 11, 2022, the Ministry of housing and urban rural development issued the "14th five year plan" for building energy conservation and green building development, proposing that by 2025, more than 50 million square meters of ultra-low energy consumption and nearly zero energy consumption buildings will be built, and the installed capacity of Cecep Solar Energy Co.Ltd(000591) photovoltaic will be more than 50gw.
Orders: in 2021, Anhui Honglu Steel Construction(Group) Co.Ltd(002541) , Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , Anhui Fuhuang Steel Structure Co.Ltd(002743) the cumulative contract value of newly signed orders was 22.83 billion yuan, 16.95 billion yuan and 5.59 billion yuan respectively, with a year-on-year increase of + 31.5%, + 13.3% and + 4.4%.
Infrastructure sector tracking
Orders from central construction enterprises: from January to February of 22 years, Metallurgical Corporation Of China Ltd(601618) , China State Construction Engineering Corporation Limited(601668) , China National Chemical Engineering Co.Ltd(601117) , Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) newly signed contracts were 2086, 4458, 767 and 121.2 billion yuan respectively, with a year-on-year increase of 14.6%, 6.7%, 87.5% and 1.7% respectively.
PPP warehousing projects: in January 2022, the amount of new warehousing projects was 32.1 billion yuan, a year-on-year decrease of 72.0%.
Risk tips
Covid-19 epidemic rebounded in China; The growth rate of infrastructure investment is lower than expected; The growth rate of real estate investment is lower than expected; The penetration rate of prefabricated buildings increased less than expected.
