The building materials sector slightly outperformed the index, and the construction sector did not obtain excess returns. This week, the yield of building materials index and construction index was - 0.5% / - 2.0%, which was 0.4 / - 1.1 percentage points respectively compared with the yield of Shanghai and Shenzhen 300 index. We believe that the reason for the excess return of the building materials sector is that the statement on financial stability reflects the clear attitude of the state to ensure that there is no systemic risk in the real estate market, and the market's expectation of the recovery of the real estate industry chain has increased, while the main reason for the non excess return of the construction sector is that after the statement of the financial committee, the overall performance of growth stocks is better than the undervalued stable growth sector.
The investment boom in water conservancy, roads and bridges is high, driving the steady growth of infrastructure. The Bureau of statistics released the main economic data from January to February, in which the infrastructure investment was + 8.1% year-on-year, which deviated greatly from the growth rate of cement demand (- 17.8%). We believe that the main reason is the growth differentiation of subdivided projects. At present, infrastructure investment includes 1) transportation, storage and postal industry and 2) water conservancy, environment and public facilities management industry. According to the detailed data in 2017, they account for about 40% / 60% of infrastructure investment respectively, of which road transportation and public facilities management are the most important components of the two. According to the data of the Bureau of statistics, in the first two months, the investment in road transportation and public facilities management industry increased by 8.2% / 5.0% year-on-year, driving the growth of infrastructure investment. However, the amount of cement used in water conservancy, environment and public facilities management industry is significantly lower than that of traditional infrastructure. Therefore, there is a large deviation between the growth rate of infrastructure investment and the growth rate of cement demand. At the previous two sessions, the government work report took 1) the construction of key water conservancy projects and 2) comprehensive three-dimensional transportation network as the focus of stable growth of infrastructure. Under the condition of further increase of financial expenditure, investment in roads, bridges and water conservancy may maintain a high growth rate. Continue to recommend Shandong Hi-Speed Road&Bridge Co.Ltd(000498) .
Pay attention to the performance exceeding expectations in the first quarter, and first promote Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) . On March 14, Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) released the price adjustment announcement of main products. From March 16, the price of asphalt coiled materials was increased by 15-20%, and the price of many other products was also adjusted to cope with the rising pressure of global crude oil price and asphalt price. In terms of operation, we believe that the sinking operation of Yuhong integrated company and the structural adjustment of customers have achieved remarkable results and outstanding growth, effectively hedging the impact of the real estate downturn; Moreover, there are abundant means to deal with bulk price increases, such as locking low-cost asphalt inventory in advance and conducting price increases to most customers to ensure the gross profit margin. Therefore, Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , which is recommended from the perspective of the first quarterly report, is expected to become one of the few core growth stocks in the sector.
Photovoltaic glass head enterprises actively expand production and pay attention to cost advantages. This week, Zhuzhou Kibing Group Co.Ltd(601636) announced the construction of two 1200t / D photovoltaic glass production lines in Malaysia, and the construction of 1.2 million tons of ultra silica sand production lines in the local area. Previously, Xinyi solar energy and Flat Glass Group Co.Ltd(601865) both announced new production line investment plans, reflecting the strong expansion intention of photovoltaic glass head enterprises. With the expansion of the average production line of the head enterprise, its cost advantage may be further consolidated, and the logic of volume increase is clear. Therefore, the growth of the head photovoltaic glass enterprise with cost advantage is expected to remain good. Recommended Shandong Jinjing Science And Technology Stock Co.Ltd(600586) . Xinyi solar energy, Flat Glass Group Co.Ltd(601865) , Zhuzhou Kibing Group Co.Ltd(601636) , Csg Holding Co.Ltd(000012) , Changzhou Almaden Co.Ltd(002623) , Luoyang Glass Company Limited(600876) and other industries benefited.
Geopolitical conflict, global potash supply is fragmented, recommended Qingdao East Steel Tower Stock Co.Ltd(002545) . Due to the gradual escalation of international geopolitical conflicts, countries pay more attention to food reserves, and food demand is expected to increase. With the recent rise in volume and price, the acceptance of potash fertilizer price in the downstream is expected to increase. At present, there is still no sign of easing the Western sanctions against Russia and Belarus, resulting in a large international trade gap (Belarus exports account for more than 20% of the international trade). It is judged that the price of potash fertilizer will continue to rise in the future, which makes the relevant companies show performance flexibility. At present, the company has a potash fertilizer production capacity of 500000 tons. It is expected to expand to 1 million tons by the end of the year and 2 million tons in the medium term. While grasping the high prosperity elasticity of potash fertilizer, it is also expected to become a first-line potash fertilizer enterprise in Asia in the future.
Risk tips
The demand is lower than expected, the cost is higher than expected, and there are systemic risks.
