The building materials sector lost the index and the construction sector gained excess returns. This week, the building materials index fell 4.1%, 2.0 percentage points lower than the CSI 300 index, and the construction index fell 0.4%, 1.7 percentage points higher than the CSI 300 index. We judge the reasons why the building materials sector lost the index: 1) the epidemic prevention and control in key cities affected the construction demand, and 2) the debt extension of rongchuang this week increased the market’s concern about the risk of the real estate industry chain. Correspondingly, the expectation of stable growth of infrastructure under economic pressure is still good, so the performance of the construction sector is relatively good.
Evergrande creditors’ meeting was held to pay attention to the bottom recovery of sentiment in the real estate industry chain. Evergrande creditors’ meeting was held last week, which pointed out that it would strive to give a debt restructuring plan in July. It is judged that if the Evergrande incident is properly handled, the liquidity risk of the real estate industry chain is expected to be alleviated and the market sentiment will pick up. In the downward cycle, the head consumer building materials enterprises can often further widen the gap with other echelon enterprises through channel adjustment, category expansion, raw material and other cost control. In the long run, the downward cycle of real estate is often a good buying point for these enterprises. Recently, some cities have relaxed the regulation of real estate, and there is great pressure on steady growth. We judge that there is still marginal room to relax the real estate policy throughout the year, the mood of the real estate industry chain is expected to gradually bottom, and the valuation of leading consumer building materials enterprises is expected to rebound. From the perspective of certainty and PEG, it is the first time to promote Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , which is expected to exceed the expected performance, adjust the layout in advance of the channel sinking, and the integrated company will fully benefit from the large volume of co construction projects; In addition, from the perspective of liquidity mitigation of the real estate chain, gradually pay attention to Skshu Paint Co.Ltd(603737) , Guangdong Kinlong Hardware Products Co.Ltd(002791) , after full valuation adjustment in the early stage.
The general code for building energy conservation and renewable energy is about to be implemented, focusing on investment opportunities related to energy conservation. From April 2022, the general code for building energy efficiency and renewable energy utilization will be officially implemented. The code is a mandatory document. Compared with the current implementation document, the new regulations list carbon emission calculation as a mandatory requirement, further refine the renewable energy utilization requirements, and put forward higher requirements for energy-saving design. Due to the relatively rapid growth of government demonstration projects such as affordable housing in 2022, We believe that the relevant achievements may be reflected quickly, and the three types of building materials enterprises benefit from the following industries:
1) thermal insulation, sun shading, TPO waterproof and other building materials enterprises: Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Shandong Yuma Sun-Shading Technology Corp.Ltd(300993) , Ningbo Xianfeng New Material Co.Ltd(300163) , Zhejiang Xidamen New Material Co.Ltd(605155) and other industries benefit.
2) glass enterprises: the demand for energy-saving glass and BIPV may be further accelerated Flat Glass Group Co.Ltd(601865) , Zhuzhou Kibing Group Co.Ltd(601636) , Shandong Jinjing Science And Technology Stock Co.Ltd(600586) , Csg Holding Co.Ltd(000012) , Xinyi solar energy and other industries benefited.
3) green construction enterprises of EPC steel structures related to BIPV: Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , Hangxiao Steel Structure Co.Ltd(600477) , Zhejiang Southeast Space Frame Co.Ltd(002135) , Anhui Fuhuang Steel Structure Co.Ltd(002743) and other industries benefit.
Geopolitical conflict, global potash supply is fragmented, continue to recommend 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 Qingdao East Steel Tower Stock Co.Ltd(002545) at present, it has a potash fertilizer production capacity of 500000 tons, which is expected to expand to 1 million tons by the end of the year and 2 million tons in the medium term, so as to grasp the high prosperity elasticity of potash fertilizer. At the same time, it is expected to become a first-line potash fertilizer enterprise in Asia in the future.
Steady growth continued throughout the year, with Shandong Hi-Speed Road&Bridge Co.Ltd(000498) . According to the relevant transportation planning of Shandong Province, during the 14th Five Year Plan period, Shandong is expected to add 555 / 505 / 140 kilometers of railway / Expressway / rail transit mileage every year, all of which are in the forefront of the country. The financial expenditure of transportation in Shandong Province accounts for 3.3% of the general public budget expenditure, which is lower than the national average level of about 5%, reflecting that there is better room for the financial end to make efforts. Therefore, we believe that the infrastructure investment in Shandong will maintain a stable growth during the 14th Five Year Plan period. By the end of 2021, the company had outstanding orders of 96.87 billion yuan, 2.8 times the revenue in 2020, and the order certainty was high. We believe that the company is the subject of steady growth, with low valuation and cost performance.
Risk tips
Demand is lower than expected, cost is higher than expected, systemic risk
