Market review in March: the market fluctuated significantly, and the industry followed the downward trend. In March, the building materials sector showed a downward trend following the market. The building materials sector fell 8.30% in a single month, outperforming the CSI 300 index by 1.15 percentage points, of which the cement sector fell 5.89% in a single month, outperforming the CSI 300 index by 3.57 percentage points, the glass sector fell 5.57%, outperforming the CSI 300 index by 3.88 percentage points, and other building materials sectors fell 10.40%, outperforming the CSI 300 index by 0.95 percentage points. Among the sub sectors, the top three sectors were cement pipe (+ 12.78%), concrete and related (- 5.37%) and gypsum board (- 6.83%).
The goal of “steady growth” is clear, and attention is paid to the implementation of project needs. From January to February 2022, the national investment in broad infrastructure increased by 8.61 year-on-year, with a growth rate of 8.4 percentage points higher than that of last year. In the two sessions held in March, the government work report added the expression of “moderately ahead of infrastructure investment”, emphasized the construction of key water conservancy projects and comprehensive three-dimensional transportation network, and continued to promote the construction of underground comprehensive pipe gallery. Recently, the national Standing Committee once again called for the deployment and use of government bonds, the expansion of effective investment, and the promotion of making up for weaknesses, increasing stamina and stable economic growth. About 800 billion new water conservancy projects were started in the whole year. On the whole, the goal of “steady growth” this year is clear and clear. It is suggested to actively pay attention to the implementation of follow-up projects.
The operation of the industry is weak, waiting for the release of demand. Affected by repeated epidemics, weather, capital and other factors, the recovery pace of cement demand is slow. With the basic resumption of operation of clinker lines across the country, under the pressure of high costs, some regional enterprises may plan to increase the number of kiln shutdown days in April. It is suggested to actively pay attention to the recovery pace of downstream demand; The glass industry is expected to gradually improve the terminal construction in April. Under the background of high current production capacity and inventory, the increase of order demand in the future will play a key role in the operation performance of the glass industry; Although the production line of glass fiber will be ignited in the near future, it will take time to officially put into operation, and the inventory is still low. It is expected that the short-term price will remain high, and the short-term price of electronic yarn will be temporarily stable after adjustment.
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Since the economic work conference last December, the central government has set the overall working idea of “stable growth” for 22 years. Since the first quarter, the market’s concern about the future economic downturn has spread. The repeated epidemic in many places in China and the outbreak of the conflict between Russia and Ukraine have brought more uncertain factors to the market. The central bank and the national development and Reform Commission have continuously issued relevant measures to accelerate the “steady growth”. At present, the downstream demand of the industry is still in the stage of gradual recovery, but the latest data show that the overall recovery rhythm is slow, which will strengthen the market’s game expectation that “the worse the demand is, the more the policy needs to be further overweight”. Therefore, the subject matter of the relevant industrial chain of “stable growth” is still the focus of recent investment. It is suggested to focus on the relevant varieties with capital construction and real estate demand and high safety margin of valuation, and grasp the cement Window opportunities for glass, recommend Anhui Conch Cement Company Limited(600585) , Huaxin Cement Co.Ltd(600801) , Gansu Shangfeng Cement Co.Ltd(000672) , Jiangxi Wannianqing Cement Co.Ltd(000789) , Guangdong Tapai Group Co.Ltd(002233) , Zhuzhou Kibing Group Co.Ltd(601636) , Csg Holding Co.Ltd(000012) ; At the same time, other building materials with great growth potential in the medium and long term can be appropriately considered. It is recommended that Guangdong Kinlong Hardware Products Co.Ltd(002791) , Ocean’S King Lighting Science & Technology Co.Ltd(002724) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Keshun Waterproof Technologies Co.Ltd(300737) , Skshu Paint Co.Ltd(603737) , Dehua Tb New Decoration Material Co.Ltd(002043) .
Risk warning: the landing of the project is lower than expected; Supply increased more than expected; The cost rise exceeded expectations.
