Matters:
On March 30, Shenwan building materials sector rose 4.91%, ranking second among Shenwan's 31 sub industries.
Ping An View:
The epidemic affects the recovery of demand, and the profitability is under pressure in stages. In terms of cement, with the resumption of work and production on the right track and the strength of infrastructure investment, the cement demand in March improved compared with that in February. However, due to the recurrence of the epidemic in many places and the frequent impact of rainy weather on the construction, the starting pressure of superimposed real estate investment is still high. Since the middle of March, the recovery rhythm of cement demand has slowed down, the delivery rate and mill operation rate are further weaker than that in the same period of last year, and the performance of cement price is also weak. In terms of waterproofing, repeated epidemics and the debt extension of individual large real estate enterprises have increased the market's concerns about the demand and performance impairment of the waterproofing industry. The significant rise in oil prices has also led to the rise of waterproof costs such as asphalt. In terms of glass, on March 20, the market price of 4.8/5mm float flat glass was 2250 yuan / ton, the price continued to fluctuate, the glass inventory rose, confirming the weak downstream demand; At the same time, as the prices of petroleum coke and heavy oil rise with the oil price, the profit of glass is also under pressure stage by stage.
The real estate policy continued to improve, and the price rise of cement and waterproof hedged the cost pressure. With the voice of many ministries and commissions on March 16, the loosening of real estate policies in many places has significantly increased. On March 23, Harbin plans to abolish the regional sales restriction policy, and the policy has stepped from relief to substantive improvement. Benefiting from the continuous improvement of the mortgage side and the frequent positive signals of policies, the trading volume of second-hand houses in key cities has gradually rebounded month on month. It is expected that the property market in more cities will stabilize in the second quarter. With the gradual stabilization of the property market, the continuous development of infrastructure and the control of epidemic situations in various regions, the demand for cement is expected to continue to release; Due to the rise of coal and other cost side prices, the price of cement gradually increased, p.o42 5. The bulk market price rose to 481 yuan / ton, and the subsequent release of demand is expected to bring the cement price further upward. In terms of waterproofing, after the policy warms up, the risk of default of real estate enterprises is less likely to spread significantly, and the development of infrastructure investment and roof photovoltaic will support the demand for waterproofing. In addition, Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) recently announced that the price of main products increased by 10% - 20%, and Keshun Waterproof Technologies Co.Ltd(300737) also increased by 5% - 30% to ensure the profit level. In terms of glass, although the short-term weakness of completion restricts the demand, the downward space of glass price driven by cost is relatively limited. At the same time, with the improvement of real estate policy and the requirements of "guaranteed delivery", the completion in the second half of the year is expected to gradually pick up, and the glass prosperity need not be too pessimistic.
The valuation and dividend yield of the building materials sector are attractive. Due to the pressure of downstream real estate investment and the impact of the epidemic, the construction rhythm, the superposition of coal and oil and other cost side price increases, the share price of Shenwan building materials sector has been weak recently, with a cumulative decline of 5.1% in March, and the valuation of the sector has fallen to a historically low quartile, especially the three sub sectors of cement, waterproof and glass. As the industry leader, PE (2022e) of Anhui Conch Cement Company Limited(600585) , Keshun Waterproof Technologies Co.Ltd(300737) , Zhuzhou Kibing Group Co.Ltd(601636) according to the consistent expectation of wind (180 days) is only 5.9 times, 10.2 times and 7.7 times respectively. Vertically, the three PE (TTM) are in the quantile of 9.8%, 1.0% and 7.5% respectively in the past five years, of which Anhui Conch Cement Company Limited(600585) according to the latest dividend plan, the current dividend rate is more than 6.1%.
With the continuous improvement of the demand of "construction and building materials", it is expected that the investment rate of "construction and building materials" will continue to improve, and the follow-up performance of "construction and building materials" is expected to be improved. At the same time, with the continuous improvement of the demand of "construction and building materials", the investment rate of "construction and building materials" is expected to continue to improve, and the development rate of "construction and building materials" is expected to be improved; In terms of waterproof, enterprises have raised prices to ensure profitability, and the frequent defaults of downstream real estate enterprises have also accelerated the clearing of the waterproof industry pattern. In the medium and long term, the general trend of raising standards in the industry is expected to lead to a double rise in concentration and demand. It is suggested to pay attention to industry leaders with product advantages, price raising ability and attractive valuation, such as Keshun Waterproof Technologies Co.Ltd(300737) . In terms of glass, with the continuous development of real estate policies, the improvement of the capital side of real estate enterprises and the superposition of the requirements of "guaranteed delivery", the completion in the second half of the year is expected to gradually return to the right track. There is no need to be pessimistic about the glass demand supported by the completion peak. It is suggested to pay attention to industry leaders, such as Zhuzhou Kibing Group Co.Ltd(601636) .
Risk tips: 1) capital construction and real estate investment are lower than expected; 2) The prices of raw materials and fuels continued to rise; 3) The untimely recovery of accounts receivable and the risk of bad debt provision.
