Weekly Research Report of building decoration industry: the main line of steady growth will continue, and building energy conservation will focus on BIPV, thermal insulation and maintenance structure

The main line of steady growth will continue, and the structural and regional characteristics may be more obvious

Although the investment data from January to February performed well, the demand data such as cement output performed poorly or represented the delay of actual commencement, so we think the commencement may be postponed from January to February; According to the social finance data, the medium and long-term loans of non-financial enterprises increased by 594.8 billion yuan year-on-year, with a year-on-year growth rate of – 54%, and the demand for physical financing was weak; Looking forward to the future, with the superposition of external conflict fermentation and repeated internal epidemics, the sustainability of investment boom may be affected. We believe that the main line of steady growth will continue. The subdivided areas such as Shandong, Sichuan and Chongqing, and the subdivided areas such as water conservancy, green power, affordable housing, pipe network, cold chain and major transportation are expected to show good growth sustainability and elasticity. The top-level design of building energy efficiency has been gradually improved, and we are optimistic about the demand expansion of relevant industrial chains

In March 2022, the Ministry of housing and urban rural development issued the “14th five year plan” for building energy efficiency and green building development. Combined with the full-text mandatory national standard “general code for building energy efficiency and renewable energy utilization” issued in October 2021 and implemented from April 2022, two programmatic documents in the field of building energy efficiency have been issued one after another, and the top-level frame design has been gradually improved. We are optimistic about building photovoltaic integration, thermal insulation materials, enclosure structure Capacity expansion opportunities in industrial chain related fields such as energy-saving design and contract energy management.

The only national mandatory specification in the field of building energy conservation and renewable energy utilization, which puts forward clear indicators and requirements for energy conservation, emission reduction and Cecep Solar Energy Co.Ltd(000591) utilization. The general code for building energy conservation and renewable energy utilization highlights the nature of technical regulations and defines the mandatory indicators and basic requirements for design, construction, commissioning, acceptance and operation management from three aspects: energy conservation design of new buildings, energy conservation of existing buildings and renewable energy utilization. The content structure, element composition and main technical indicators are in line with the relevant technical regulations and standards of developed countries, and generally reach the international advanced level. Among them, the index requirements in energy conservation and emission reduction and Cecep Solar Energy Co.Ltd(000591) fields deserve special attention: 1) the average design energy consumption level of new residential buildings and public buildings is further reduced, which is 30% and 20% lower than the energy-saving design standards implemented in 2016; 2) It is required that the Cecep Solar Energy Co.Ltd(000591) system should be installed in the new building. During the design of Cecep Solar Energy Co.Ltd(000591) photovoltaic power generation system, the installed capacity of the system and the total annual power generation should be given.

Market Review

Last week, the construction (CITIC) index fell 0.56% and the CSI 300 index fell 1.49%. Among the three sub sectors, the housing construction and decoration sectors recorded positive gains of 4.18% and 1.33% respectively. Among individual stocks, Guangdong No.2 Hydropower Engineering Company Ltd(002060) (+ 61.16%), Shenzhen Grandland Group Co.Ltd(002482) (+ 45.17%), Tianyu Eco-Environment Co.Ltd(603717) (+ 16.90%), Zhejiang Reclaim Construction Group Co.Ltd(002586) (+ 13.66%), Shenzhen Wenke Landscape Co.Ltd(002775) (+ 8.74%) led the increase.

Investment advice

Under the medium and long-term growth dimension of “construction +” leader, enterprises with “new energy” and “chemical” industries have gradually entered the performance cashing period, and their performance is expected to grow high. Under the dimension of valuation restoration of value varieties, the leaders of local state-owned enterprises are expected to enjoy the high boom of regional infrastructure, and the profit elasticity brought by the improvement of operating efficiency has initially appeared. In the medium and long term, there are both opportunities for steady growth and report quality improvement. The increase of market share of central enterprises supports the continuous growth of revenue. After the completion of leverage reduction, roe still has obvious upward elasticity. With the continuous strengthening of the profit release ability and willingness of central enterprises, It also has strong elasticity of valuation and repair.

Risk tips: Infrastructure & real estate investment went down more than expected, new energy & chemical business expansion was less than expected, the concentration of assembled leaders was less than expected, and the progress of efficiency improvement in the reform of central enterprises and state-owned enterprises was less than expected.

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