Key investment points
Key events of this week: 1) six ministries and commissions made joint statements to promote the recovery of real estate policies: on March 16, the financial stability and Development Commission of the State Council held a meeting to study the current economic situation. With regard to real estate enterprises, the meeting said that it was necessary to study and put forward effective plans to prevent and resolve risks; Then, six ministries and commissions, including the central bank, made statements one after another to maintain the healthy and stable development of the real estate market. Among them, the Ministry of Finance said that it did not have the conditions to expand the pilot cities of real estate tax reform this year. 2) The investment data from January to February exceeded expectations, and the real estate demand was under short-term pressure: according to the National Bureau of statistics, the real estate development / infrastructure investment (excluding electricity) from January to February was yoy + 3.7% / + 8.1%, the area of real estate sales / new construction / completion / construction / land acquisition was yoy-9.6% / – 12.2% / – 9.8% / + 1.8% / – 42.3%, and the output of cement / glass was yoy-17.8% / + 2.0%. Under the pressure of steady growth, the annual infrastructure investment continued to rely on fiscal policy. 3) The annual reports of the 21st century have been released one after another. The profits of glass fiber leaders have increased rapidly, and the cement enterprises have ups and downs: China Jushi Co.Ltd(600176) / Sinoma Science & Technology Co.Ltd(002080) revenue yoy + 68.9% / + 7.6%, net profit attributable to parent yoy + 149.5% / + 65.4%. The performance of the industry has reached the best in history under the high boom Tangshan Jidong Cement Co.Ltd(000401) / Guangdong Tapai Group Co.Ltd(002233) / Gansu Qilianshan Cement Group Co.Ltd(600720) / Ningxia Building Materials Group Co.Ltd(600449) revenue + 2.4% / + 9.5% / – 1.8% / + 13.2% year-on-year, net profit attributable to parent company yoy-1.4% / + 3.0% / – 34.1% / – 17.0%. The double control of energy consumption and the slowdown in the commencement of Q4 project in September 21 led to the decline of cement sales, but the price increased year-on-year and remained high. The different volume reduction and price increase of various enterprises led to the differentiation of income; The sharp rise in coal price at the profit side affects the performance of enterprises. 4) A number of enterprises have launched a new round of repurchase, demonstrating their confidence in development: Zhuzhou Kibing Group Co.Ltd(601636) plans to repurchase at no more than 450 million yuan, accounting for 1.0% – 1.6% of the total share capital Guangdong Tapai Group Co.Ltd(002233) plans to buy back with 200400 million yuan, accounting for 1.3% – 2.7% of the total share capital Gansu Shangfeng Cement Co.Ltd(000672) it is proposed to repurchase with 200300 million yuan, accounting for 1.5% of the total share capital. 5) The float glass industry leader has stepped up the photovoltaic industry, and the waterproof leader has actively expanded its production: Zhuzhou Kibing Group Co.Ltd(601636) it is planned to build two 1200t / D photovoltaic glass production lines and an annual output of 1.2 million tons of ultra white quartz sand base in Malaysia, and build roof distributed photovoltaic power stations in five production bases in China, with a design installed capacity of 143.02 MWP Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) plans to invest 600 million yuan to build a green new material production base in Nanning.
This week’s view: at present, it is gradually entering the intensive disclosure period of the annual report. It is suggested to pay attention to the exceeding expected target of the annual report. At the current time, we suggest to pay attention to several main lines of investment in building materials & new materials. First, the prosperity and performance fulfillment are selected from glass fiber, quartz sand and carbon fiber industries; Second, the marginal improvement of real estate policy, focusing on the layout of brand building materials; Third, gypsum board and cement are preferred for undervalued defense: the common feature is good cash flow and competition pattern; Fourth, at the bottom of the photovoltaic glass industry cycle, under the support of cost, the downward risk of the industry is limited, and the selection of leading enterprises with high certainty and competitive cost. 1) The glass fiber cycle is weakened, the roving boom is expected to continue (wind power, automobile and other strong support for demand), the price of electronic cloth has fallen to the bottom range, and the current safety margin is high. 2) In the field of new materials, carbon fiber / high-purity quartz sand / electronic cover glass ushered in the industrial opportunity of high demand + domestic alternative resonance, and UTG welcomed the outbreak of demand. Zhongfu Shenying, a carbon fiber leader, has begun preliminary inquiry and will be issued to the public. According to the company’s announcement, it is expected to realize a net profit of 80-90 million yuan from January to march of 22, with a year-on-year increase of 106.9% – 132.8%. 3) Brand building materials enter the strategic allocation time point. In terms of real estate, policy marginal relaxation + increased demand for affordable housing with non real estate developers as the main body, and the demand of the real estate chain is expected to gradually pick up (the end of real estate demand is expected to correspond to 2022q1). We believe that the expected bottom of the real estate corresponds to the bottom of the valuation of brand building materials (refer to the resumption of 14 / 18, and this round corresponds to 2021q4). The double repair of the performance and valuation of brand building materials in 22 years is worth looking forward to. The leaders of each subdivision track have long deduced the main logic of improving the concentration. The frequent repurchase, incentive and increase of industrial funds highlight the confidence of enterprises, and the enterprises with excellent endowments such as channel, brand, capital and management are highly uncertain. 4) In the short term, when the cement industry is expected to grow steadily and heat up, the excess return of the sector is prominent. In the 22 years, the industry has high prosperity toughness (focusing on the enhancement of supply side coordination), and in the medium and long term, the industry is expected to be integrated + extended. 5) From the perspective of water reducing agent, capital construction pull + gross profit margin rise + functional materials open up growth space. 6) The price of float glass has dropped slightly. In the short term, it is mainly to digest social inventory. In the follow-up, with the continuation of demand toughness, the price is still expected to maintain a good level; There is still price elasticity at the bottom of the photovoltaic glass cycle. We are optimistic about the adverse expansion and cost competitiveness of leading enterprises, and focus on the profit elasticity and long-term growth brought by the expansion of traditional glass into the photovoltaic glass field.
Glass fiber: the industry cycle is weakened and the boom is expected to continue. This week, the average price of 2400tex winding direct yarn was 6100 yuan / ton (the same month on month, year-on-year – 17); The average price of electronic yarn G75 is 10000 yuan / ton (Mom – 50, yoy – 4900); The mainstream quotation of electronic cloth is 3.7 yuan / meter (flat month on month). We expect that the new capacity of the industry will be limited in 22 years, with roving / electronic yarn of about 54.5101000 tons respectively, and the production line will be put into operation more dispersed. We expect the marginal new capacity of 22q1-22q4 to be 1.7/1.7/3.313000 tons / quarter respectively, with a relatively mild impact. We expect that the global effective production capacity / demand of glass fiber in 22 years will be 9.36/9.43 million tons respectively. The supply and demand are in tight balance. Under the low inventory, the price boom is expected to continue. The energy cost of glass fiber accounts for about 20%, and the energy consumption is still high. Under the dual control of energy consumption, it is more difficult to increase the new capacity of the industry, and the uncertainty of landing rhythm increases. We believe that the new production capacity will still be dominated by leading enterprises, and the industry pattern is expected to continue to be optimized. The leading enterprises have core competitiveness such as cost and technology, and the continuous upgrading of product structure will hedge the periodicity to a certain extent. The competitiveness of the leading enterprises in the glass fiber industry is significantly enhanced both from the perspective of increasing market share and continuous decline of cost. We expect that the profitability of the bottom leading enterprises in the next round is expected to increase significantly compared with history. We continue to focus on recommending glass fiber leading enterprises China Jushi Co.Ltd(600176) , Sinoma Science & Technology Co.Ltd(002080) , Jiangsu Changhai Composite Materials Co.Ltd(300196) , Shandong Fiberglass Group Co.Ltd(605006) .
New materials: 1) carbon fiber boom continues: at the end of this week, the average price of carbon fiber market was 186000 yuan / ton (mom -0.1, yoy + 3.1), the average price of large tow was 145000 yuan / ton (mom -0.2, yoy + 1.5), and the average price of small tow was 225000 yuan / ton (mom flat, yoy + 4.5); At the weekend, the inventory of carbon fiber factory was 13 tons (mom + 1, yoy – 1). The raw material acrylonitrile market declined slightly, and the price of precursor was slightly loose. We believe that the investment logic of the civil carbon fiber industry lies not only in the high demand growth (wind, light, hydrogen, etc.), but also in the “favorable climate, favorable location and harmonious people”. After seizing the opportunity to catch up, we will further expand the scale and cost advantage and realize the historical opportunity of “domestic substitution” and transcendence.
Under the barriers of high technology, technology and capital, those who win the “raw silk” win the world. In the medium and long term, with reference to glass fiber, the industry penetration can be improved or rely on “price” for “demand”. We suggest paying attention to the carbon fiber leader Zhongfu Shenying (to be listed), precursor leader Jilin Carbon Valley, Jilin Chemical Fibre Co.Ltd(000420) , Weihai Guangwei Composites Co.Ltd(300699) , Sinofibers Technology Co.Ltd(300777) , Hengshen shares; Carbon fiber equipment manufacturer Zhejiang Jinggong Science & Technology Co.Ltd(002006) ; Downstream composite manufacturers Sinoma Science & Technology Co.Ltd(002080) , Kbc Corporation Ltd(688598) , Beijing Tianyishangjia New Material Corp.Ltd(688033) , Hongfa new materials, etc. 2) For the quartz glass industry, benefiting from the growth of photovoltaic installed capacity / the transformation of photovoltaic cells from p-type to n-type, the demand for high-purity quartz sand is growing rapidly, and the supply pattern of “two overseas + one large in China” has led to new controllable growth in the industry, and the supply and demand is expected to maintain a tight balance; The demand for semiconductor and military quartz materials is booming, and the barriers to qualification certification are high. Leading enterprises are expected to continue to increase the market share. Jiangsu Pacific Quartz Co.Ltd(603688) and Hubei Feilihua Quartz Glass Co.Ltd(300395) . 3) Electronic cover glass: Chinese enterprises have made technological breakthroughs and passed the downstream certification. Under the condition of improving the penetration rate of domestic mobile phones and ensuring the safety of the supply chain, domestic substitution is accelerated. It is suggested to pay attention to realizing the iterative breakthrough of electronic cover technology and complete the Csg Holding Co.Ltd(000012) . 4) UTG: the penetration acceleration of folding screen mobile phones + alternative CPI trend is obvious, and the demand welcomes the outbreak; Take the lead in realizing technological breakthrough and benefiting mass production enterprises. It is suggested to pay attention to Triumph Science & Technology Co.Ltd(600552) .
Brand building materials: under the pressure of the industry, the most difficult time for brand building materials has passed, and the leader welcomes light loading + counter trend expansion. 1) Since 21q4, “bottom of real estate policy + broad real estate market (affordable housing)” + landing of credit risk + stabilization and decline of raw material prices, and the expected bottom of brand building materials has been established. 2) From the 14-year and 18-year recovery, the expected bottom of the real estate corresponds to the bottom of the valuation of brand building materials. 3) Leading enterprises have strengthened their competitiveness and highlighted their growth (category expansion and application expansion) during the pressure period of the industry. The credit impairment of major enterprises has been implemented in 21 years, and the performance and valuation are expected to be restored in 22 years. Brand building materials, brand building materials, brand building materials, brand building materials. Leading enterprises have advantages in terms of brand / Channel / cost / capital, etc. both in terms of competitiveness and growth, they have the ability to cross cycles, and in terms of competitiveness and growth, they have the ability to go through cycles, and in the process of building the bottom, they are the first to break through the encirclement, seize the leading position, take the lead in the process of building the bottom, take the lead in the process of building the bottom, and actively lay out the leading. We recommend Beijing New Building Materials Public Limited Company(000786) \ , Guangdong Dongpeng Holdings Co.Ltd(003012) , Wangli Security & Surveillance Product Co.Ltd(605268) Asia Cuanon Technology (Shanghai) Co.Ltd(603378) , it is suggested to pay attention to China Liansu, Jiangsu Canlon Building Materials Co.Ltd(300715) , D&O Home Collection Co.Ltd(002798) .
Under the expected warming of steady growth, the cost performance of cement sector allocation is prominent. Through the resumption of trading, we found that the cement sector can achieve about 10% excess return in each round of stable growth policy setting and data window period. The economic data verification period showed a volatile trend, and the fundamentals verification period was highly related to performance. At present, it is an important layout time point after setting the tone of steady growth. The cement sector is expected to continue to benefit from the expected warming. In addition, we believe that the demand of the coal industry will continue to increase by more than 2.2 billion tons, and the supply of the leading enterprises is expected to continue to increase. In addition, although the demand of the coal industry will continue to decline in 2021, it is expected that under the support of the central platform, the supply will continue to increase, and all the leading enterprises are expected to make a positive contribution to the growth of more than 2.2 billion tons, The low valuation highlights the cost performance. This week, the national cement market price fell by 0.2% month on month. In mid March, the demand of China’s cement market was affected by the multi-point spread of the epidemic, the construction progress of the project was limited, and the improvement of cement shipments this week was limited. In terms of price, due to the obvious increase in the cost side, the cement price in some southern regions has maintained an upward trend; As the demand in Northeast China has just started, the quotation has returned to a reasonable level from a high level. This week, the national storage capacity ratio was 58.9%, with a month on month ratio of -1.8pct, a year-on-year increase of + 2.5pct; The shipment rate was 59.7%, with a chain comparison of + 2.7pct and a year-on-year comparison of + 10.9pct. It is recommended to focus on Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) , Gansu Shangfeng Cement Co.Ltd(000672) , Guangdong Tapai Group Co.Ltd(002233) , and it is recommended to focus on Chinese building materials, Xinjiang Tianshan Cement Co.Ltd(000877) , Jiangxi Wannianqing Cement Co.Ltd(000789) .
Continue to focus on recommending the leader of China’s concrete water reducing agent industry Sobute New Materials Co.Ltd(603916) Sobute New Materials Co.Ltd(603916) recommendation logic: the company’s production capacity planning is clear, and it is expected to continue to grow in the next three years, with a rising market share; The price of raw material ethylene oxide is running at a low level. At the end of September, the price increase of the company is gradually implemented, and the gross profit margin in 22 years may increase significantly; The company’s functional materials (such as anti crack and anti-seepage agent, wind power grouting material, etc.) maintain a high growth, and is expected to grow into an admixture platform enterprise.
Building glass prices continued to fall; The price of photovoltaic glass has stabilized. The average price of float glass this week was 2266 yuan / ton (Mom – 118, yoy – 6); Weekend inventory of 53.72 million heavy containers (mom + 300, yoy + 2489); The production capacity of glass in production is 173000 T / D (unchanged month on month). This week, China’s float glass market is weak and downward, and prices in most regions have been reduced by different ranges. In the northern region, the delivery of some manufacturers is limited, and the local price decline is obvious. Under the impact of the supply of goods in North China and Northeast China, the prices in the southern region fell. On the whole, the new orders of downstream processing plants are insufficient, the lack of orders is still prominent, the wait-and-see in the middle and lower reaches is strong, and the short-term market is expected to continue the weak pattern. We believe that under the “guaranteed delivery” of real estate, the toughness of glass demand is expected to be maintained. On the supply side, considering the high capacity utilization rate of the industry, the subsequent new capacity is limited; In addition, at present, in the production line, the proportion of kiln age production capacity of 8-10 years / 10-12 years / more than 12 years is 13.2% / 8.3% / 5.9% respectively. Cold repair of the old production line may lead to supply contraction. We expect the glass price to remain at a good level throughout the year. In terms of photovoltaic glass, the mainstream quotation of 3.2mm coating at the end of this week was 26 yuan / square (the same month on month, year-on-year – 35%); Inventory days are about 22.7 days (mom + 1%, yoy + 6%); The production capacity in process is 44000 T / D (unchanged month on month, year-on-year + 32.6%). For photovoltaic glass, the new supply under the dual control of energy consumption may be less than expected, and the price at the bottom of the industrial cycle may be upward elastic. Optimistic about the revenue proportion of traditional glass enterprises in the field of photovoltaic glass and improve their cost competitiveness. Continue to focus on recommending Zhuzhou Kibing Group Co.Ltd(601636) , and suggest paying attention to Xinyi Glass, Csg Holding Co.Ltd(000012) , Shandong Jinjing Science And Technology Stock Co.Ltd(600586) , Luoyang Glass Company Limited(600876) , etc; At the same time, we continue to recommend photovoltaic glass leading Xinyi solar energy and Flat Glass Group Co.Ltd(601865) .
Risk warning: macroeconomic downside risk; Demand is lower than expected; Excessive new capacity; Poor capital turnover.
