Weekly Research Report of building decoration industry: continue to be firmly optimistic about the main line of steady growth, and focus on BIPV, thermal insulation and maintenance structure for building energy conservation

Firmly optimistic about the release space of follow-up infrastructure and real estate policies

On March 29, the national standing committee pointed out that "we should not relax our commitment to the annual development goals, put steady growth in a more prominent position, coordinate the policies of steady growth, structural adjustment and reform, stabilize the economy early and quickly, do not take measures that are not conducive to stabilizing market expectations, and formulate plans to deal with greater uncertainty", highlighting the necessity of steady growth after the recent repeated epidemics. We expect that the follow-up policies are expected to be further strengthened, Continue to be optimistic about the sustainability of steady growth. In March, Zhengzhou, Harbin, Fuzhou and other places adjusted the policies of loan restriction, purchase restriction or sale restriction. According to the statistics of Zhuge housing search data research center, by the end of March, more than 70 cities across the country had adjusted the policies related to real estate this year. The adjustment direction involves adjusting the purchase and sale restriction, reducing the proportion of down payment, increasing the amount of provident fund loans, reducing the housing loan interest rate, and issuing house purchase subsidies. Affected by multiple factors such as the epidemic situation, market expectations and the fundamentals of real estate enterprises, the real estate industry is still at a "trough". We believe that more cities will follow up and optimize restrictive policies in the future. The real estate policy is expected to continue to boost the market's confidence in the real estate chain and drive the valuation repair of the sector.

The top-level design of building energy efficiency has been gradually improved, and we are optimistic about the demand expansion of relevant industrial chains

Since April 1, the national standard "general code for building energy conservation and renewable energy utilization" has been enforced. Two programmatic documents in the field of building energy conservation have been issued one after another, and the top-level frame design has been gradually improved. We are optimistic about the capacity expansion opportunities in industrial chain related fields such as building photovoltaic integration, thermal insulation materials, envelope structure, energy-saving design and contract energy management. The only national mandatory specification in the field of building energy conservation and renewable energy utilization, which puts forward clear indicators and requirements for energy conservation, emission reduction and Cecep Solar Energy Co.Ltd(000591) utilization. The general code for building energy conservation and renewable energy utilization highlights the nature of technical regulations and defines the mandatory indicators and basic requirements for design, construction, commissioning, acceptance and operation management from three aspects: energy conservation design of new buildings, energy conservation of existing buildings and renewable energy utilization. The content structure, element composition and main technical indicators are in line with the relevant technical regulations and standards of developed countries, and generally reach the international advanced level. Among them, the index requirements in energy conservation and emission reduction and Cecep Solar Energy Co.Ltd(000591) fields deserve special attention: 1) the average design energy consumption level of new residential buildings and public buildings is further reduced, which is 30% and 20% lower than the energy-saving design standards implemented in 2016; 2) It is required that the Cecep Solar Energy Co.Ltd(000591) system should be installed in the new building. During the design of Cecep Solar Energy Co.Ltd(000591) photovoltaic power generation system, the installed capacity of the system and the total annual power generation should be given.

Market Review

Last week, the construction (CITIC) index rose by 2.17% and the CSI 300 index rose by 2.94%. In the three sub sectors, except for construction and decoration, all the three sub sectors rose, of which housing construction and infrastructure recorded positive earnings of 4.87% and 2.99% respectively. Among individual stocks, Lets Holdings Group Co.Ltd(002398) (+ 14.89%), Beijing Qianjing Landscape Co.Ltd(603778) (+ 13.79%), Shenzhen Jianyi Decoration Group Co.Ltd(002789) (+ 12.79%), Xinjiang Beixin Road & Bridge Group Co.Ltd(002307) (+ 11.84%), Chongqing Construction Engineering Group Co.Ltd(600939) (+ 10.55%) led the increase.

Investment advice

Under the medium and long-term growth dimension of "construction +" leader, enterprises with "new energy" and "chemical" industries have gradually entered the performance cashing period, and their performance is expected to grow high. Under the dimension of valuation restoration of value varieties, the leaders of local state-owned enterprises are expected to enjoy the high boom of regional infrastructure, and the profit elasticity brought by the improvement of operating efficiency has initially appeared. In the medium and long term, there are both opportunities for steady growth and report quality improvement. The increase of market share of central enterprises supports the continuous growth of revenue. After the completion of leverage reduction, roe still has obvious upward elasticity. With the continuous strengthening of the profit release ability and willingness of central enterprises, It also has strong elasticity of valuation and repair.

Risk tips: Infrastructure & real estate investment went down more than expected, new energy & chemical business expansion was less than expected, the concentration of assembled leaders was less than expected, and the progress of efficiency improvement in the reform of central enterprises and state-owned enterprises was less than expected.

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