Weekly market of construction industry
The industry rose and fell in the week. This week (3.28-4.1), the building decoration industry (SW) rose 1.65%, weaker than the Shanghai Composite Index (+ 2.19%), Shanghai and Shenzhen 300 (+ 2.43%), stronger than the performance of Shenzhen Component Index (1.29%), ranking 15th among the 31 primary industries of SW, and the industry ranking remained the same as last week (15th). In terms of molecular sectors, the sectors of housing construction (3.77%), basic municipal engineering (3.56%), International Engineering (1.66%), chemical engineering (1.48%) and garden Engineering (0.01%) rose this week, and the performance of decoration sector was the weakest (- 1.68%). Performance of individual stocks in a week. A total of 74 companies in the construction industry recorded an increase this week, accounting for 51%; The number of companies with an increase of more than the industry index (1.65%) this week was 56, accounting for 38%. The construction industry recorded an increase this week, with an increase compared with last week. The number of companies with an increase of more than the industry index this week decreased compared with last week. The top 5 gainers of the industry are 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%), Shanghai Luoman Lighting Technologies Inc(605289) (8.20%); The top 5 industry declines this week were Tianyu Eco-Environment Co.Ltd(603717) (- 10.23%), L&K Engineering (Suzhou) Co.Ltd(603929) (- 10.41%), Shenzhen Qixin Group Co.Ltd(002781) (- 12.05%), Hangzhou Landscape Architecture Design Institute Co.Ltd(300649) (- 13.04%), Shenzhen Grandland Group Co.Ltd(002482) (- 21.81%).
Industry valuation. From the perspective of the overall P / E ratio of the industry, as of April 1, the P / E ratio (TTM) of the architectural decoration industry was 10.77 times and the industry P / B ratio (MRQ) was 0.96 times. The P / E ratio and P / B ratio of the industry increased compared with last week. Compared with the SW primary industry, PE in the construction industry ranks the third from the bottom, higher than steel and banks; Pb valuation ranks the penultimate in all primary industries, higher than that of banks. The current industry's lowest price earnings ratio (TTM): Top 5 Shaanxi Construction Engineering Group Corporation Limited(600248) (3.42), China Railway Construction Corporation Limited(601186) (4.25), China State Construction Engineering Corporation Limited(601668) (4.48), China Railway Group Limited(601390) (5.46), Shandong Hi-Speed Road&Bridge Co.Ltd(000498) (6.20); The lowest price to book ratio (MRQ) is China Railway Construction Corporation Limited(601186) (0.51), ST Meishang (0.53), Beijing Orient Landscape & Environment Co.Ltd(002310) (0.61), China Communications Construction Company Limited(601800) (0.65), China Railway Group Limited(601390) (0.66).
Industry dynamic analysis
Based on the previous "14 weeks" project construction, we will increase the amount of capital and steadily promote the construction of all kinds of projects, so as to prevent and eliminate major risks as soon as possible.
On March 31, the national development and Reform Commission organized the first inter ministerial joint meeting on the implementation of 102 major projects in the 14th five year plan. The meeting reviewed the working rules of the inter ministerial joint meeting on promoting the implementation of 102 major projects in the 14th five year plan and the key points of work in 2022, and studied and deployed the key work in the next step. The meeting stressed that 102 major projects are important contents of the outline of the 14th five year plan and an important starting point for promoting the implementation of the 14th five year plan. Promoting the implementation of 102 major projects benefits both the present and the long term, which plays an important role in expanding effective investment and promoting steady and healthy economic development. According to the requirements of the meeting, all departments should deploy according to the key points of work in 2022, strengthen organization and leadership, strengthen coordination and cooperation, and ensure the implementation and effectiveness of each task of 102 major projects.
The overall performance of China's infrastructure investment data from January to February is bright, or because the special bonds issued by 21q4 and 22q1 have been put into use, and the progress of major construction projects has been accelerated, which reflects the remarkable effect of the early steady growth policy to a certain extent. In March, the spread of the national epidemic intensified, which may have a certain impact on the investment promotion and project construction in some regions in the short term. However, from the perspective of the whole year, the tone of China's steady growth is still clear, the policy force is sustained, and the financial capital supply is highly guaranteed. We are optimistic about the increase in the growth rate of infrastructure investment in 22h1 and the future performance of the "two new and one heavy" sector, It is suggested to pay attention to the central infrastructure enterprises and local infrastructure leading sectors, survey and design sectors, urban rail industry chain and high-quality targets of new power construction, which are the main force of infrastructure construction. At the same time, it is suggested to pay attention to the fabricated buildings and building photovoltaic sectors whose prosperity is expected to continue to rise during the 14th Five Year Plan period. At the same time, the marginal improvement policy of the real estate industry continues, and the favorable policy expectation in the future is relatively strong. The real estate chain design, decoration and consumer building materials sector may usher in new upward action.
This week, the national development and Reform Commission and the National Energy Administration jointly issued a notice to speed up the development and construction of pumped storage projects during the 14th Five Year Plan period, emphasizing strengthening efforts to accelerate the approval of pumped storage projects in 2022, ensure the approval of a number of projects by the end of 2022, and do a good job in connection with the subsequent annual approval of the 14th five year plan, so as to promote the sound, rapid, large-scale and high-quality development of pumped storage.
The circular requires that the development and reform commissions and energy bureaus of all provinces (autonomous regions and municipalities) should take the development and construction of pumped storage projects as an important energy work at present, strengthen departmental coordination while accelerating project approval, promote the acceleration of the approval procedures for project land use and environmental impact assessment, and start the construction of projects with construction conditions as soon as possible;
Central energy enterprises undertaking the development and construction of pumped storage projects should optimize and improve their internal processes, improve the efficiency of project investment decision-making, bidding and other work, speed up the investment of capital, manpower and other elements, and support project approval and construction; In the planning and implementation of power grid, power grid enterprises shall do a good job in connection with the construction of pumped storage projects in all provinces (regions and cities), and speed up the construction of grid connection projects on the basis of the design of project access system; For qualified pumped storage projects, strengthen land guarantee.
At the same time, in terms of operational benefits, it is proposed to take the two-part electricity price as the main body, form the electricity price through a competitive way, bring the capacity electricity price into the recovery of transmission and distribution electricity price, and promote the pumped storage power station to participate in the market as an independent subject. In the area where the large-scale wind power photovoltaic base is located, the planning and construction of pumped storage should be well connected and coordinated with the planning of large-scale wind power photovoltaic base, project layout and transmission channel, so as to promote power transmission.
According to the medium and long term development plan of pumped storage (20212035) released in the early stage, the planning cycle of pumped storage construction in China is long and the scale is large. With the implementation of Pumped Storage Power Station projects in various provinces and cities, the high-quality targets in the field of deep cultivation hydropower construction are expected to benefit fully. It is suggested to pay attention to the leader of central water conservancy and hydropower enterprises Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) , as well as local state-owned infrastructure enterprises Anhui Construction Engineering Group Corporation Limited(600502) . According to the contents of the plan, By 2030, the production scale of pumped storage will reach 120 million KW. The growth of such orders and the increase of market share of the company can be expected.
Investment advice this week
At present, steady growth continues to increase, fiscal expenditure has increased, infrastructure investment data from January to February are bright, policy implementation has achieved initial results, the demand for two new and one heavy construction in the construction industry is clear, local construction plans are large, and capital supply is relatively sufficient. This week, we continue to recommend high-quality infrastructure targets benefiting from the "two new and one heavy" under the goal of steady growth, and we suggest paying attention to affordable housing The high-quality targets for the development of prefabricated buildings and BIPV and the high-quality targets in the field of new power construction. In addition, there are sufficient orders in hand in the early stage, and the performance of 22q1 exceeds expectations. The company's performance is worth looking forward to.
Including:
1) China State Construction Engineering Corporation Limited(601668) , China Communications Construction Company Limited(601800) , China Railway Construction Corporation Limited(601186) , Metallurgical Corporation Of China Ltd(601618) , Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) and other central construction enterprises, Shandong Hi-Speed Road&Bridge Co.Ltd(000498) , Anhui Construction Engineering Group Corporation Limited(600502) and other regional infrastructure leaders, with excellent order performance and significant valuation advantages, are the main force to increase infrastructure and the main beneficiaries of steady growth and moderate improvement of industry concentration;
2) China Design Group Co.Ltd(603018) , Anhui Transport Consulting & Design Institute Co.Ltd(603357) , high-quality survey and design targets at the front of the industrial chain, give priority to the steady growth of infrastructure and the high growth of infrastructure demand in the province during the 14th five year plan;
3) Shenzhen Capol International&Associatesco.Ltd(002949) , the leader of prefabricated building design, benefited from the release of demand for prefabricated building construction during the 14th Five Year Plan period;
4) Guangzhou Metro Design & Research Institute Co.Ltd(003013) , Zhejiang Tiantie Industry Co.Ltd(300587) , respectively, are leading enterprises in urban rail design and urban rail vibration reduction, with stable industry status, strong technical and brand strength and high performance, fully benefiting from the release of urban rail construction demand under the promotion of new infrastructure;
5) new power construction: under the background of new power system construction with new energy as the main body, construction enterprises involved in the field of power construction are expected to benefit from the improvement of power grid investment and construction, operation and maintenance demand, and the release of BIPV and energy storage demand. It is recommended that Suwen Electric Energy Technology Co.Ltd(300982) , the leader of power construction and operation on the user side, and the layout of Zhejiang Southeast Space Frame Co.Ltd(002135) , Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , Tus-Design Group Co.Ltd(300500) .
2022 industry investment perspective
In 2022, the construction industry is expected to usher in multiple development opportunities of fundamentals, policy driven and "construction +", and the industry is in the undervalued range, with prominent investment value. The overall fundamentals of the construction industry are improving. In particular, the rapid growth of orders from central infrastructure enterprises and local infrastructure leaders will help improve performance. It will take the lead in benefiting from the release of infrastructure demand under the goal of stable growth. At the same time, it will actively layout new businesses, improve comprehensive strength and help valuation repair.
The policy is expected to become another driving force for the "spring agitation" of the industry in 2022. In the near future, the steady growth policy will continue to increase, the active fiscal policy should improve the efficiency, the local special debt can be launched within a certain period, the monetary policy should be flexible and appropriate, and the liquidity should be reasonable and abundant. In 2022, there are expectations of reducing reserve requirements and interest rates, and the loose monetary policy is conducive to the development of the industry. The "two new and one heavy" construction is expected to increase, and the infrastructure investment is moderately ahead of schedule, which is worth looking forward to.
The construction industry actively embraces the "new economy" and actively layout Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) . BIPV, energy storage and carbon sequestration have become the key areas of layout of listed companies. Some companies Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) have achieved initial results and are expected to continue to make efforts in the future to help improve the valuation level of companies and industries. Industry leaders and regional leaders will continue to cultivate traditional businesses, expand the whole industrial chain and extend upstream and downstream around traditional businesses, and fully benefit from the improvement of industry concentration. The release of future performance is sustainable.
On the whole, the construction industry has both "white horse" with good performance and extremely low valuation, and "dark horse" with layout of "building +" and standing at the market outlet. The overall trend of the industry is good, with fundamental support and policy catalysis. In addition, the "building +" helps to improve the valuation and is optimistic about the overall trend of the construction industry in 2022.
Suggestions on medium and long-term configuration
The overall fundamentals of the construction industry have improved. Industry leaders and regional leaders have benefited from the "national advance and people retreat" and the improvement of industry concentration. Both newly signed orders and performance have increased rapidly. At the same time, the construction industry actively embraces the "new economy" and the "construction +" era is coming, opening up the future development space of the company. On the main line of configuration, we propose to actively layout the "construction +" new business sector around the "two new and one heavy" infrastructure leaders and the "double carbon" background:
(1) "two new and one heavy" infrastructure leaders. Central construction enterprises and regional infrastructure leaders will fully benefit from "two new and one heavy" construction, and central construction enterprises and regional infrastructure leaders will fully benefit from the "two new and one heavy" construction. And central construction enterprises and regional infrastructure leaders are the main beneficiaries of "the country advances, the people retreat, the industry concentration increases, and the industry concentration increases. The new orders and performance are bright, and the valuation advantage is quite significant. It's suggested to focus on China State Construction Engineering Corporation Limited(601668) \ the valuation advantage is obvious. The new orders and performance and valuation advantage is very obvious. It's obvious valuation advantage is obvious. It's recommended to focus on China State Construction Engineering Corporation Limited(601668) andother regional infrastructure leaders. At the same time, urban rail design and vibration reduction will fully benefit from the release of urban rail transit demand under the construction of new urbanization. Guangzhou Metro Design & Research Institute Co.Ltd(003013) and Zhejiang Tiantie Industry Co.Ltd(300587) .
(2) high quality target of infrastructure survey and design China Design Group Co.Ltd(603018) , Anhui Transport Consulting & Design Institute Co.Ltd(603357) , the front end of the industrial chain gives priority to benefiting from the release of infrastructure demand under the goal of steady growth. During the 14th Five Year Plan period, the planned infrastructure investment scale of many provinces increased significantly, the contracting advantage of leading orders of high-quality design was significant, and the market share could be increased in time.
(3) pumped storage beneficiary company. With the change of energy structure, power supply security has been put on the agenda, and energy storage has become the main means to solve power security. As the most important way of energy storage, pumped storage has been strongly supported by national policies. In the future, pumped storage will enter a stage of rapid growth and encourage social capital to enter. Water conservancy and hydropower engineering enterprises own the construction and operation of pumped storage projects, and most of them have hydropower operation assets. It is possible to layout pumped storage power stations, which is expected to fully benefit the development of pumped storage in the future. Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) , Guangdong No.2 Hydropower Engineering Company Ltd(002060) and Anhui Construction Engineering Group Corporation Limited(600502) .
(4) prefabricated buildings. We believe that under the background of carbon peak and carbon neutralization goal, the prefabricated construction field mainly in the form of concrete structure and steel structure will continue to fully benefit from the further improvement of the industry prosperity and the release of demand, and is expected to become an important development field under the carbon neutralization goal. It is suggested to pay attention to Shenzhen Capol International&Associatesco.Ltd(002949) , Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , Zhejiang Southeast Space Frame Co.Ltd(002135) .
(5) new power construction. In the context of the construction of new electric power systems with new energy as the main body, under the backdrop of new energy as the main body, building companies involved in power construction are expected to benefit from grid investment and construction and operation and operation and operation and maintenance needs, BIPV and energy storage demand releases, BIPV is expected to benefit from the backdrop of new energy as the building of new power systems, as the backdrop of a new power system with new energy as the main body. Building companies involved in the field of power construction are expected to benefit from grid investment, construction and operation and maintenance, enhanced demand for operation and maintenance, enhanced BIPV and release of BIPV and energy storage demand. Recommend the consumer side power construction and operation leader Suwen Electric Energy Technology Co.Ltd(300982) Suwen Electric Energy Technology Co.Ltd(300982) \ \359.
Risk tips: epidemic control is not as expected, policy implementation is not as expected, economic downside risk, PPP promotion is not as expected, fixed asset investment is declining, local financial growth is slow, etc
