Key investment points
This week (2022.3.21 – 2022.3.25, the same below): this week, the building materials sector (SW) rose or fell by – 3.72%. In the same period, the Shanghai and Shenzhen 300 and wandequan a indexes rose or fell by – 2.14% and – 1.41% respectively, and the excess return was – 1.58% and – 2.31% respectively.
Fundamentals and high-frequency data of bulk building materials: (1) cement: the national high-standard cement market price this week was 507 yuan / ton, compared with – 7 yuan / ton last week and + 64 yuan / ton compared with the same period in 2021. Regions with higher prices than last week: Pan Beijing Tianjin Hebei region (+ 3 yuan / ton) and North China (+ 10 yuan / ton); Regions where prices fell: Yangtze River Basin (- 3 yuan / ton), Northeast (- 13 yuan / ton), Central South (- 5 yuan / ton), Southwest (- 4 yuan / ton) and Northwest (- 36 yuan / ton). This week, the average cement warehouse location of national sample enterprises was 59.3%, which was + 1.6pct compared with last week and + 6.6pct compared with the same period in 2021. The average cement delivery rate (daily delivery rate / production capacity in process) of the national sample enterprises was 48.1%, which was -1.3pct compared with last week and -22.4pct compared with the same period in 2021. (2) Glass: according to the statistics of Zhuo Chuang information, the average price of the national float white glass original sheet is 2113 yuan / ton, which is – 153 yuan / ton compared with last week and – 165 yuan / ton compared with the same period in 2021. According to the statistics of Zhuo Chuang information, the original film inventory of sample enterprises in 13 provinces in China was 56.45 million heavy boxes, up from + 2.73 million heavy boxes last week and + 26.99 million heavy boxes in the same period in 2021. (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 viewpoint: the relaxation of the first set of interest rates in Wuhan shows that the accumulation of real estate pressure in second tier cities has reached the policy critical point. Under the escalation of epidemic control, the construction speed of the construction site will slow down slightly, or the launch of the relaxation policy of real estate will be accelerated. However, before the peak of bond repayment, the negative credit rumors of private real estate enterprises could not be eliminated. Superimposed with the sharp fluctuation at the cost side, the fluctuation range of annual gross profit margin and profit forecast may be relatively large. Recently, the “14th five year plan for green construction” and the “key tasks for 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 and 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 disturbance of the epidemic has increased the downward pressure on the economy, and the cement demand and profit are expected to rebound in the medium term. The epidemic affects the downstream construction and then restricts the release of demand. Although it has a certain impact on the rhythm of cement delivery and price rise in the short term, due to the increased downward pressure on the economy in the medium term, the steady growth policy is expected to further exert its force and will not change the recovery trend of cement demand and profit in the medium term. 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 real estate sector has gradually released loose signals. 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 credit side has recently reduced the down payment ratio and the loan interest rate of the first house. 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 real estate enterprises and consumer financing side are expected to continue to relax. Previously, the valuation of the decoration building materials sector was lower than the historical center due to the slowdown in demand, the rise of raw materials and cash flow pressure. Since March, waterproof material enterprises have intensively issued price increase letters in response to the recent sharp rise in raw material prices. At present, the price increase has been gradually implemented. With the expectation of marginal relaxation of real estate, the decline of high raw material costs, the implementation of price transmission, the withdrawal of bad debts and the gradual release of 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. Pay attention to Guangdong Kinlong Hardware Products Co.Ltd(002791) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , China Liansu, ad Co., Ltd. Zhejiang Weixing New Building Materials Co.Ltd(002372) , Beijing New Building Materials Public Limited Company(000786) , Keshun Waterproof Technologies Co.Ltd(300737) , Jiangsu Canlon Building Materials Co.Ltd(300715) , Monalisa Group Co.Ltd(002918) , Zhejiang Walrus New Material Co.Ltd(003011) , etc.
Risk warning: the epidemic situation exceeded expectations, the real estate credit risk was out of control, and the policy concentration exceeded expectations.
