Key investment points
Iron and steel: the demand performance in recent two weeks is weak, and the weekly table needs to decline month on month, about – 14% year-on-year. The transaction of construction steel has not reached the peak season level, which is related to the epidemic in many places. The demand is weak, but the steel price is strong, reflecting that the market does not think that the epidemic will have a sustained impact; In addition, the strong upstream raw materials also form a cost support for the steel price. The resumption of production after the winter Paralympic Games in North China has driven the demand for raw materials higher. The resumption of blast furnace production also led to the continuous decline of the profit per ton of steel. At present, the simulated profit per ton of steel has fallen to the low level in the range of nearly five years, reflecting the high supply pressure in the smelting link. On the whole, the short-term steel price is intertwined with long and short factors. The positive factors are the tight overseas supply and the support of raw material costs. The negative factors are the weak demand in China and the suppression of processing fees by the resumption of blast furnace production. In the medium term, we should pay attention to the risk that the demand continues to fall short of expectations.
Coal: China Shenhua Energy Company Limited(601088) large dividends are expected to stimulate the investment enthusiasm of the sector again. In terms of thermal coal, ports and pits continued to rise. This week, affected by the strict investigation of medium and long-term contract performance by coal mines in the producing area, the market supply is tight, and the pit mouth price rises by 30-70 yuan. In terms of supply, due to the limited production of environmental protection inspection in some open-pit coal mines, combined with the shortage of coal management tickets at the end of the month and the impact of medium and long-term contract supervision, the supply of coal mines in the main production areas is still tight. Affected by the epidemic, downstream industries have shut down, and some power plants have arranged maintenance, so there are few transactions, but the problem of structural coal shortage is not changed. In terms of import, at present, the demand of Europe and other countries is gradually slowing down, and China’s inquiry is also dominated by low calorie coal, but the short-term imported power coal price is still supported. In terms of demand, after entering the traditional off-season, the daily consumption of the power plant is reduced and the procurement rhythm is suspended. However, considering the actual inventory level of the power plant, there is still rigid demand in the follow-up. After that, we need to pay attention to the changes of downstream demand and inventory. In terms of coking coal, downstream production is still recovering, and international coal prices are still rising. The prices of some coal types fell this week. The coal types with reduced prices are mainly low sulfur main coking coal, fat coal and some gas coal with a large increase in the early stage, with an overall decline of about 100300 yuan / ton. The price of hard coking coal in Fengjing mine in the world decreased by 12.89% on a weekly basis. In terms of supply, most areas operate normally, while Inner Mongolia has limited coal mine production due to environmental protection inspection, and the overall supply side continues to be tight; International supply is also generally tight, and coking coal prices are still high. In terms of importing Mongolian coal, Ganqi Maodu port cleared 212 vehicles per day (week on week + 21 vehicles) on the 4th of this week, and the customs clearance volume continued to rise at a low level. However, due to the poor willingness of traders to receive goods, the quotation was lower. In terms of demand, affected by the epidemic, the production of coke enterprises decreased, the trans provincial transportation was blocked, the downstream receiving was cautious, and the procurement of coke enterprises slowed down. On March 24, Tangshan Bureau of industry and information technology issued an urgent letter on handling passes for key industrial enterprises, which may reduce the impact of the epidemic on steel production. Then continue to pay attention to the shipment and downstream demand. In terms of coke, the supply and demand side has loosened in the short term, and we should pay attention to the impact of the epidemic. As of March 25, the price of secondary metallurgical coke in Tangshan was 3600 yuan / ton, unchanged on a weekly basis. In terms of supply, with the multi-point outbreak of the epidemic, affected by the interruption of automobile transportation and tight transportation capacity, coke enterprises in the central and western regions have accumulated warehouses. Although the arrival of raw materials is insufficient and the operating load has decreased significantly, the overall supply side still tends to be loose. On the demand side, the downstream steel mills often stopped work and slowed down construction under the influence of the epidemic, and were forced to reduce production due to lack of raw materials; After considering the downstream replenishment demand, some traders in the port still have a small number of transactions. On the whole, the epidemic disrupted the original market supply and demand pattern, and the demand was compressed in the short term. In the follow-up, we will continue to pay attention to the shipment and steel plant production. Investment strategy: in terms of thermal coal this week, the price fluctuated at a high level, the epidemic affected the limited transportation capacity, superimposed on the mining Insurance Association, the market coal is still in short supply, and the international medium and high calorie coal price is still high, resulting in continuous restrictions on imports; In terms of coking coal, due to the impact of the epidemic, the commencement of downstream steel mills is limited, and the market fluctuates and adjusts. Last weekend, Tangshan issued a document requiring to apply for passes for key industrial enterprises, which may help to reduce the impact of the epidemic on steel production. Overall, the stock capacity is a scarce resource. Coal stocks are generally valued at 5-6 times, and the stability of price and profit expectations is improved. It is suggested to actively layout coal stocks in 2022. In terms of individual stock recommendation, companies with a high proportion of long-term association have more stable performance growth, companies with a high proportion of coal in the market have more attractive valuation, and companies with large advantages of coal types or logic of output growth have strong competitiveness α In addition, coal stocks that actively layout energy transformation will also get the opportunity to improve their valuation. Thermal coal stocks are suggested to focus on: Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) , Shaanxi Coal Industry Company Limited(601225) , Yankuang energy, China Shenhua Energy Company Limited(601088) , China Coal Energy Company Limited(601898) , Shanxi Coal International Energy Group Co.Ltd(600546) , Beijing Haohua Energy Resource Co.Ltd(601101) , power investment energy. Metallurgical coal stocks are suggested to pay attention to: Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) , Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Shanxi Coking Coal Energy Group Co.Ltd(000983) , Huaibei Mining Holdings Co.Ltd(600985) , Jizhong Energy Resources Co.Ltd(000937) , Shanxi Coking Co.Ltd(600740) . Anthracite recommended attention: Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) . Coke stocks are suggested to pay attention to: Shanxi Meijin Energy Co.Ltd(000723) , Jinneng Science&Technology Co.Ltd(603113) , China Xuyang group, Kailuan Energy Chemical Co.Ltd(600997) , Shaanxi Heimao Coking Co.Ltd(601015)
Nonferrous Metals: high inflation supports gold prices, and the Fed’s interest rate hike is expected to speed up; The price of energy metals is stable, and the development of lithium resources in China may speed up. 1) The terminal demand continues to increase, the supply is difficult to meet in the short term, the prices of energy and metal commodities have reached a historical high, the profits of the industrial chain are further concentrated upstream, the game between the upstream and downstream of the industrial chain is significantly intensified, and the increase of commodities is slowing down. Affected by the sharp rise in the price of raw materials, the price rise tide of various auto enterprises is coming: affected by the rise in the cost of raw materials, the decline of subsidies and the shortage of chips, Tesla, Byd Company Limited(002594) , Xiaopeng automobile, Nezha automobile, Weima and other auto enterprises have announced price increases in the past two weeks. Since March, nearly 20 new energy vehicle enterprises have announced price increases, involving nearly 40 models. Lithium: China’s resource security system has been strengthened, and the price of lithium carbonate has operated steadily. The price of lithium carbonate has reached 500000 yuan / ton. The “lithium supply” has become the main contradiction in the new energy vehicle industry chain. Lin nianxiu, deputy director of the national development and Reform Commission, said at the forum of the 8th China electric vehicle hundred people’s Congress that we should strengthen the construction of resource security systems such as lithium, cobalt and nickel, continue to ensure supply and stable price, and speed up the construction of development and procurement With the diversified resource guarantee system of China International, the development of lithium resources in China may enter an accelerated period. Rare earth permanent magnet: the industry pattern is reshaped. Downstream enterprises mainly consume inventory, and the purchase demand is weakened. The quotation of praseodymium and neodymium oxide in China fell by 3.9% to 995000 yuan / ton. We believe that under the current supply and demand pattern, the price does not have the risk of falling sharply. Cobalt: with the tightening of raw materials, the price of cobalt may rise further, which is affected by the high price. There is a strong wait-and-see mood in the downstream market of electrolytic cobalt. The high fluctuation of nickel price also has an impact on the demand for ternary materials, and the downstream is dominated by rigid demand procurement; The supply side logistics and transportation problem has not been alleviated, the supply of intermediate products is tight, and the cobalt inventory remains at a very low level, showing a situation of weak supply and demand. Nickel: in the short term, under the capital game, the fluctuation of nickel price increases; In the long run, nickel prices have returned to fundamentals. Affected by the capital game, nickel fluctuated greatly in this cycle. LME nickel closed at US $36000 / ton, down 2.61% month on month. 2) For precious metals, the Fed’s position is further biased towards hawks, but the market is more worried about inflation. During the week, Fed chairman Powell said that the Fed must raise interest rates “quickly”. If a single interest rate increase of 50 basis points is appropriate, it will do so; Brad of the Federal Reserve said that a 50 basis point increase in interest rates would certainly occur; Mester said that the Fed may need to raise interest rates significantly in the remaining six meetings this year; The market expects the fed to raise interest rates by 50 basis points in May and June respectively.
However, US CPI and other inflation data significantly exceeded the historical level, and market concerns about inflation intensified. As of March 25, Comex gold closed at US $1954.2 per ounce, up 1.29% month on month; COMEX silver closed at US $25.615/oz, up 2.10% month on month; SHFE gold closed at 401.7 yuan / g, up 1.47% month on month; SHFE silver closed at 5237 yuan / kg, up 2.23% month on month. 3) Base metals, further interest rate hikes are expected to increase, and concerns about the European energy crisis have intensified. During the week, a series of economic related data released by the United States confirmed that the Federal Reserve will actively take measures to curb inflation and further increase interest rate expectations. In addition, Russia’s supply of natural gas to European countries will be settled in rubles. Any supply interruption caused by the change of rules will exacerbate the energy crisis in Europe, the soaring price of natural gas in Europe, and the fear of shrinking the supply of non-ferrous metals in Europe. Specifically, LME copper, aluminum, lead, zinc, tin and nickel rose or fell by – 0.3%, 7.0%, 3.8%, 6.3%, 0.4% and – 1.7% respectively this week, and the price rose as a whole.
Building materials: the listing of Zhongfu Shenying, a carbon fiber leader, is imminent. It is suggested to pay attention to the high prosperity target of relevant industrial chains; Mandatory regulations will be implemented soon, and attention will be paid to the opportunities related to the development of green buildings. At the current time, we suggest paying attention to several main lines of investment in building materials & new materials. First, the prosperity and performance fulfillment are selected from carbon fiber, quartz sand and glass fiber industries; Second, the marginal improvement of real estate policy, focusing on the layout of brand building materials; Third, gypsum board and cement are preferred for undervalued defense: the common feature is good cash flow and competition pattern; The bottom is the leading industry with deterministic growth cycle and limited cost support. 1) In the field of new materials, the demand for new energy fields such as wind, light and hydrogen downstream of carbon fiber breaks out; Domestic leaders have finished catching up. In the future, capacity expansion and cost reduction will lead to surpassing in the civil field. High purity quartz sand / electronic cover glass ushered in the industrial opportunity of high demand increase + domestic alternative resonance, and UTG welcomed the outbreak of demand. 2) The glass fiber cycle is weakened, the roving boom is expected to continue (wind power, automobile and other strong support for demand), the price of electronic cloth has fallen to the bottom range, and the current safety margin is high. 3) Brand building materials enter the strategic allocation time point. In terms of real estate, policy marginal relaxation + increased demand for affordable housing with non real estate developers as the main body, and the demand of the real estate chain is expected to gradually pick up (the end of real estate demand is expected to correspond to 2022q1). We believe that the expected bottom of the real estate corresponds to the bottom of the valuation of brand building materials (refer to the resumption of 14 / 18, and this round corresponds to 2021q4). The double repair of the performance and valuation of brand building materials in 22 years is worth looking forward to. The leaders of each subdivision track have long deduced the main logic of improving the concentration. The frequent repurchase, incentive and increase of industrial funds highlight the confidence of enterprises, and the enterprises with excellent endowments such as channel, brand, capital and management are highly uncertain. 4) In the short term, when the cement industry is expected to grow steadily and heat up, the excess return of the sector is prominent. In the 22 years, the industry has high prosperity toughness (focusing on the enhancement of supply side coordination), and in the medium and long term, the industry is expected to be integrated + extended. 5) From the perspective of water reducing agent, capital construction pull + gross profit margin rise + functional materials open up growth space. 6) The price of float glass has dropped slightly. In the short term, it is mainly to digest social inventory. In the follow-up, with the continuation of demand toughness, the price is still expected to maintain a good level; There is still price elasticity at the bottom of the photovoltaic glass cycle. We are optimistic about the adverse expansion and cost competitiveness of leading enterprises, and focus on the profit elasticity and long-term growth brought by the expansion of traditional glass into the photovoltaic glass field.
Chemical industry: the traditional bulk is still looking for the bottom, and the leading value crosses the cycle. As the main body of the chemical industry, the PPI of chemical raw materials and chemical products manufacturing industry in February 2022 increased by 19.70% year-on-year, which was positive for 14 consecutive months. In terms of downstream demand, from January to December 2021, the newly started area of houses decreased by 11.4% year-on-year, 0.04% month on month in December, the construction area increased by 5.2% year-on-year from January to December, 6.32% month on month in December, the completed area increased by 11.2% year-on-year from January to December, and 184.9% month on month in December; From January to December, the national automobile output increased by 4.8% year-on-year; From January to December, the retail sales of clothing, shoes, hats, knitwear and textiles increased by 14.2% year-on-year, with strong demand. On the supply side, the investment in fixed assets in the chemical industry continued to grow. From January to December, the investment in fixed assets in chemical raw materials and chemical products manufacturing industry increased by 15.7% year-on-year. It is suggested to focus on leading enterprises with excellent quality and core competitiveness, such as Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Jiangsu Yangnong Chemical Co.Ltd(600486) , Zhejiang Nhu Company Ltd(002001) , Rongsheng Petro Chemical Co.Ltd(002493) , Tongkun Group Co.Ltd(601233) , Hengli Petrochemical Co.Ltd(600346) . With the improvement of health awareness, sugar substitutes have become the general trend of the times. It is suggested to pay attention to the leading food additives in the business cycle Anhui Jinhe Industrial Co.Ltd(002597) .
Risk warning events: macroeconomic downside risk, crude oil price fluctuation risk and enterprise operation risk.
