First quarter performance of infrastructure industry
Affected by geopolitics, interest rate hikes by the Federal Reserve and repeated outbreaks in China, investors' concerns about the macroeconomic downturn increased. The whole stock market performed poorly in the first quarter. In the first quarter, the Shanghai Composite Index fell 10.65%, the Shenzhen composite index fell 18.44% and the gem index fell 19.96%. In infrastructure industry and related fields, except for housing construction, real estate, engineering consulting services, cement and other sectors, other sectors were in decline. The top three sectors were wind power equipment, software development and power grid equipment, with a decline of 24.27% respectively 20.46%、20.45%。
From the valuation of the sector, the valuation of the rising sector and the less declining sector in the first quarter are relatively low. From this point, it can be seen that the overall style of the market in the first quarter is mainly defensive. The main reason is that the market sentiment is risk averse due to the impact of the external environment, and the sectors with low valuation and low congestion are more favored by the market.
The growth rate of infrastructure investment accelerated in the first quarter
According to the investment data from January to February released by the National Bureau of statistics, infrastructure investment increased by 8.1% year-on-year, 7.7 percentage points faster than the whole year of 2021, the number of new projects invested increased by 1.1 times year-on-year, the planned total investment of new projects increased by 62.8%, the national budget funds increased by 33.9%, and the self raised funds increased by 13.2%. On the whole, the infrastructure industry has achieved a good start.
Second quarter outlook of infrastructure industry
Core view: 1. In the long run, new energy infrastructure and digital infrastructure are more in line with the requirements of China's economy towards high-quality development, and the industry has more growth; 2. In the short term, there is no conflict between the development of new infrastructure and the realization of steady growth. New energy infrastructure and digital infrastructure are important directions for investment in advance of steady growth policies; 3. The average valuation of the industry has been adjusted to a reasonable range, and the new infrastructure is expected to rebound in the second quarter.
[real estate]
The easing of real estate policy does not mean that real estate can soar again. First, the debt default risk of the real estate industry has not been fully released. The purpose of this round of real estate policy easing is to achieve a soft landing of real estate and support the economy. In addition, consumers have a more rational concept of house purchase. The development of the real estate industry depends on the policy in the short term and the population in the long term. The policy has a great impact on the supply side and the population has a great impact on the demand side. "Meeting the reasonable housing needs of buyers" is to meet the rigid demand on the one hand and the improved demand on the other hand. Therefore, we believe that this year's real estate is relatively certain that the opportunity lies in economically developed cities and cities with net population inflow. Such market rigid demand and improved demand are relatively strong. Recently, the real estate stocks are generally rising. We believe that there may be differentiation in the later stage. It is suggested to focus on the state-owned real estate enterprises and high-quality private real estate enterprises with net population inflow, urban real estate development, abundant liquidity and good performance expectations. The relevant targets are: China Vanke Co.Ltd(000002) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , Poly Developments And Holdings Group Co.Ltd(600048) , Longhu group, etc.
[transportation infrastructure]
As an important field of new infrastructure construction, intercity high-speed rail and rail transit have the function of countercyclical regulation of economy. It is different from the functions and service objects of traditional railways and highways. It focuses more on densely populated urban agglomerations and metropolitan areas, and emphasizes high-speed and high-frequency. It is the basic transportation blood to promote the integrated and coordinated development of urban agglomerations and metropolitan areas. At present, 10 national urban agglomerations and 5 national metropolitan areas have been approved. By increasing the construction of intercity high-speed railway and rail transit and promoting the interconnection of transportation infrastructure, the construction and development of urban agglomerations and metropolitan areas can be effectively promoted. According to the 14th five year plan
According to the development plan of modern comprehensive transportation system, during the "14th five year plan" period, the operating mileage of railway will increase by 19000 kilometers, while that of high-speed railway will increase by 12000 kilometers, accounting for 63.16%. The operating mileage of urban rail transit will increase from 6600 kilometers in 2020 to 10000 kilometers in 2025, with a compound annual growth rate of about 8.7%, and the market increment space is obvious. In addition, the new intercity high-speed rail and rail transit can better integrate with the digital economy, improve the digital level, realize data interconnection, establish an intelligent transportation infrastructure system, and realize the long-term goal of becoming a transportation power. It is suggested to pay attention to the intercity high-speed railway and rail transit related to the construction of national urban agglomerations and metropolitan areas, with relevant targets: China Communications Construction Company Limited(601800) , China Railway Construction Corporation Limited(601186) , Sichuan Road & Bridge Co.Ltd(600039) , Hongrun Construction Group Co.Ltd(002062) , Shanghai Tunnel Engineering Co.Ltd(600820) , etc.
[new energy infrastructure]
We believe that the implementation of the double carbon policy will not be loosened, and the logic of the new energy industry has not changed. The main reasons are as follows: first, the development of the new energy industry helps to avoid the problem of energy bottleneck; Second, the construction of new energy infrastructure such as wind power, photovoltaic, UHV and charging piles can stimulate a large amount of investment and consumption demand in the short term; Third, the construction of new energy infrastructure is more in line with China's high-quality economic development in the long run.
From the documents issued by government departments, the state still encourages and supports the development of new energy industry. On March 22, the national development and Reform Commission and the Energy Administration issued the 14th five year plan for modern energy system, which proposed to accelerate the development of wind power and Cecep Solar Energy Co.Ltd(000591) power generation. We will actively promote the construction of decentralized wind power and distributed photovoltaic power in the eastern and central regions, optimize the development of onshore wind power and photovoltaic power generation bases in Xinjiang, Qinghai, Gansu, Inner Mongolia, Ningxia, Northern Shaanxi, northern Shanxi, northern Hebei, Liaoning, Jilin and Heilongjiang, and focus on the construction of offshore wind power bases in Guangdong, Fujian, Zhejiang, Jiangsu and Shandong. According to the statistical data of the national power industry in 2021 released by the national energy administration, by the end of December 2021, the installed capacity of wind power is about 330 million KW and the installed capacity of Cecep Solar Energy Co.Ltd(000591) power generation is about 310 million KW. According to the action plan for carbon peak before 2030, the total installed capacity of wind power and Cecep Solar Energy Co.Ltd(000591) power generation will reach more than 1.2 billion kw in 2030. According to conservative calculation, the annual compound growth rate of installed capacity of wind power and Cecep Solar Energy Co.Ltd(000591) power generation is about 7.23%.
In the new energy infrastructure, we are optimistic about the investment opportunities of offshore wind power. It is suggested to pay attention to the wind power equipment enterprises with wharf advantages, with relevant targets: Dajin Heavy Industry Co.Ltd(002487) , Shanghai Taisheng Wind Power Equipment Co.Ltd(300129) , etc; The submarine cable with high industrial barriers is the link with high certainty of benefit, and the related objects: Jiangsu Zhongtian Technology Co.Ltd(600522) , Hengtong Optic-Electric Co.Ltd(600487) , Ningbo Orient Wires & Cables Co.Ltd(603606) , etc; At the same time, it is suggested to pay attention to the UHV sector as the core of the energy Internet, with relevant targets: State Grid Yingda Co.Ltd(600517) , Tbea Co.Ltd(600089) , Nari Technology Co.Ltd(600406) , etc.
[digital infrastructure]
The 14th five year plan for the development of digital economy mentioned that by 2025, the added value of core industries of digital economy will account for 10% of GDP. Digital infrastructure has become the bottom foundation of its growth, and there is a large incremental space. In addition, the start-up of the East digital West computing project puts forward more specific requirements for digital infrastructure. We are optimistic about the relevant benefits:
1. Cloud computing and data center, related subjects: Kehua Data Co.Ltd(002335) , Shanghai Baosight Software Co.Ltd(600845) , Guangdong Aofei Data Technology Co.Ltd(300738) , etc.
2. Equipment supplier and related objects: Zte Corporation(000063) , Unisplendour Corporation Limited(000938) , etc.
2. Network, server and other equipment, related objects: Eoptolink Technology Inc.Ltd(300502) , Shenzhen Envicool Technology Co.Ltd(002837) etc.
3. Optical fiber communication, related subjects: Yangtze Optical Fibre And Cable Joint Stock Limited Company(601869) , Jiangsu Zhongtian Technology Co.Ltd(600522) , Hengtong Optic-Electric Co.Ltd(600487) , etc.
4. Data security, related subjects: 360 Security Technology Inc(601360) , Nsfocus Technologies Group Co.Ltd(300369) , etc.
Risk tips: the implementation of policies is less than expected, the epidemic situation repeatedly exceeds expectations, and the rise of raw materials exceeds expectations.
