This week (March 14, 2022 – March 18, 2022, the same below): the building materials sector (SW) rose or fell by – 0.16% this week. In the same period, the CSI 3 million and wandequan a index rose or fell by – 0.94% and – 1.31% respectively, and the excess return was 0.78% and 1.15% respectively.
Fundamentals and high-frequency data of bulk building materials: (1) cement: the market price of high-standard cement in China this week was 514 yuan / ton, which was – 1 yuan / ton compared with last week and + 78 yuan / ton compared with the same period in 2021. Regions with higher prices than last week: Pan Beijing Tianjin Hebei region (+ 7 yuan / ton), East China (+ 6 yuan / ton), Central South Region (+ 7 yuan / ton) and southwest region (+ 4 yuan / ton); Price decline area: Northeast China (- 30 yuan / ton). The average cement storage location of the national sample enterprises this week was 57.7%, down from – 2.1pct last week and + 1.2pct over the same period in 2021. The average cement delivery rate (daily delivery rate / production capacity in process) of the national sample enterprises was 49.3%, which was + 5.2pct compared with last week and -11.7pct compared with the same period in 2021. (2) Glass: according to the statistics of Zhuo Chuang information, the average price of national float white glass is 2266 yuan / ton, which is – 118 yuan / ton compared with last week and – 6 yuan / ton compared with the same period in 2021. The inventory of enterprises in the same period last week was 24.89 million boxes, which was higher than that of enterprises in the same period last week + 3.03 million boxes. (3) Glass fiber: the median turnover of alkali free 2400tex direct yarn was 6150 yuan / ton, the same as last week, and + 150 yuan / ton compared with the same period in 2021.
Zhou’s view: the real estate policy is warm, and many ministries and commissions said last week to stabilize the real estate. The expected rate of return of the project in Hefei local auction increased, and state-owned enterprises warmly supported it. More and more policies and profits will gradually boost the confidence of the industrial chain. On the basis of the sharp decline caused by geographical factors in the early stage, the building materials sector is expected to usher in a stage of rise. Recently, the “14th five year plan of green construction” and the “key tasks of urbanization in 2022” have been issued, which mainly involve improving the performance of enclosure materials such as doors and windows and thermal insulation, promoting building photovoltaic, prefabricated construction and decoration, and strengthening the transformation of old residential areas and urban pipe networks. It is suggested to pay attention to Guangdong Kinlong Hardware Products Co.Ltd(002791) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Beijing New Building Materials Public Limited Company(000786) , Anhui Conch Cement Company Limited(600585) , China Liansu, etc. In terms of bulk building materials: the broad monetary policy of steady growth is expected to be further strengthened, and the medium-term cement demand and profit are expected to be repaired. The economic data in February showed that the investment was strong while the demand for cement was still weak. We judged that the project approval and implementation were accelerated under the force of steady growth, and the progress of capital investment has been significantly accelerated, but the new project has not yet contributed to the physical demand. We expect that Q2 may enter a phased peak of physical demand, and the medium-term cement demand is expected to continue to repair. In the short term, due to the good implementation of peak staggering, the overall level of clinker storage in China is low, and the cement storage level is in the middle but has begun to decline. The superposition enterprises have a strong mentality of raising prices to pass on costs. It is expected that the rhythm of price increase in this peak season will lead the rise of demand, and there is good price elasticity along the core markets such as the Yangtze River and the Pearl River Delta. Industry self-discipline + potential environmental protection and energy consumption constraints shrink the industry’s supply capacity, the industry’s capacity utilization is expected to remain high, and the profit center will remain medium to high. The dividend yield of 5 ~ 8% in 2021 makes the current valuation of 7 times P / E ratio have room for repair. It is suggested to focus on Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) and Gansu Shangfeng Cement Co.Ltd(000672) with strong performance certainty and bright spots in the extension of medium and long-term industrial chain, and Tangshan Jidong Cement Co.Ltd(000401) , Xinjiang Tianshan Cement Co.Ltd(000877) , Gansu Qilianshan Cement Group Co.Ltd(600720) , etc. that benefit from the integration of northern market and great business elasticity in the medium and long term.
Decoration and building materials: steady growth is expected to boost demand, and the sector valuation is expected to continue to repair under the relaxation of real estate chain policies and funds. The recent government work report mentioned “building key water conservancy projects”, “accelerating the renewal and transformation of urban gas pipeline and other pipe networks”, “continuing to recommend the construction of underground comprehensive pipe gallery”, etc. we expect that the construction of underground pipe network and sponge city will bring sustainable increment during the 14th five year plan period. In terms of real estate, the easing signal is gradually released. Recently, the local auction heat in Hefei is high, which reflects the boost of the confidence of real estate enterprises; Previously, according to the financial Associated Press, the opinions on the supervision of national commercial housing pre-sale funds have been issued, and the supervision of pre-sale funds is expected to improve. At the same time, the proportion of down payment on the credit side has been reduced in many places recently. However, the social finance data in February is lower than expected, and the policy effect is not yet clear. We expect that the follow-up Housing enterprises and consumer financing side are expected to continue to relax. Previously, the valuation of the decoration and building materials sector has been in the lower position of the historical center due to the slowdown in demand, the rise of raw materials and cash flow pressure. With the relaxation of expectations on the edge of real estate, the decline of high raw material costs, and the gradual release of bad debt provision and cash flow risk expectations, the overall sector is expected to usher in performance and valuation repair. Referring to the historical experience of the consumer building materials sector and the current competitive situation, in the stage of capital easing + confidence gradually recovering from the bottom of the real estate industry, some companies may take the lead to further increase their share and enter a new expansion cycle with the help of channel leading layout, operating efficiency advantage or financing plus leverage. The inflection point of shipment or order growth can be used as a signal on the right. To focus on the etc.
Risk warning: the epidemic situation exceeded expectations, the real estate credit risk was out of control, and the policy concentration exceeded expectations.
