Key changes in the industry (04060408): ① Xinjiang announced the key project plan, with a total investment of 2.17 trillion yuan (year-on-year + 430.2 billion yuan), and an annual planned investment of 270 billion yuan (year-on-year + 30 billion yuan). ② On April 6, [Zhongfu Shenying] was listed on the science and innovation board. ③ [ Zhuzhou Kibing Group Co.Ltd(601636) ] released the 2021 annual report to accelerate the layout of photovoltaic glass business. ④ On April 7, the price of photovoltaic glass ushered in the second round of increase. ⑤ The price of float glass in Hubei increased, and the Shahe epidemic in Hebei affected the outward transportation of glass. ⑥ [ China Railway Group Limited(601390) ] the newly signed contract amount in the first quarter increased significantly by 84% year-on-year. ⑦ Gansu Qilianshan Cement Group Co.Ltd(600720) , Guangdong Tapai Group Co.Ltd(002233) released the forecast for the first quarter, with a large decline, mainly due to the decline of sales volume, the increase of cost and non recurrent impact.
Core view: capital construction chain and real estate chain are stable growth
(1) the goal of steady growth is firm. It is expected that after the completion of epidemic prevention, infrastructure will continue to hedge against downward pressure. From the perspective of infrastructure chain, construction, cement and pipeline sectors are more relevant. At the end of March, the national regular meeting mentioned that “maintaining the stable operation of the economy in the first quarter and the first half of the year is very important to achieve the annual goal; placing steady growth in a more prominent position”. At the same time, a number of water conservancy projects with mature conditions were started this year, with an annual investment of 800 billion yuan. The investment targets related to water conservancy include [ Anhui Construction Engineering Group Corporation Limited(600502) ] [ Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) ] [ Guangdong No.2 Hydropower Engineering Company Ltd(002060) ]. Recently, attention has been paid to the announcement of major project investment arrangements by provinces and cities. The epidemic has occupied the control energy of local governments to a certain extent. They are optimistic about the implementation of the plan at the beginning of the year and the resumption of overweight after the epidemic, but suggest a rational view of the “trillion” investment. For example, Xinjiang announced the 2.17 trillion investment plan, but the investment in 2022 is 270 billion yuan. In addition, China Railway Group Limited(601390) announced the newly signed contract amount in the first quarter this week, boosting market confidence, with a significant year-on-year increase of 84%, including a significant increase of 94% in infrastructure construction.
(2) continue to be optimistic about the real estate chain, because the marginal relaxation of urban policy continues. We are optimistic about the target with the characteristics of both start-up and growth. ① The consumption of building materials and cement will focus on the marginal change of performance. After the end of the epidemic interference, the demand superposition + steady growth policy will be implemented from March to April, and the improvement of fundamentals is expected to accelerate; ② Cost side pressure has been fully recognized, and price increases have been hedged in waterproof, coating, cement and other industries; ③ In 2021, the growth rate of real estate sales, commencement and construction is high before and low after, and the Q1 base is high. The dynamic PE of consumer building materials elasticity leader in 2022 is generally 10-15x, and the core leader is 20-25x. We suggest to pay attention to: ① valuation and repair space; ② Profit expectation and repair space. The core leader’s mark [ Hongda Xingye Co.Ltd(002002) 372 ].
(3) the short-term sales volume of cement decreased, the cost increased and the inventory increased, but it is used at the starting end of the real estate chain / infrastructure chain, and the fundamentals of Q2 are expected to improve. The cement storage capacity ratio continued to increase by 2 percentage points to 67% month on month, with a year-on-year increase of + 18.7 percentage points. The overall delivery level was 58%, with a year-on-year decrease of 30%. The delivery in Shanghai, which is greatly affected by the epidemic, was only 30%, with a decrease of 70%.
(4) following the price increase in early March, the recent second round of price increase of photovoltaic glass is mainly driven by cost (natural gas + freight).
(5) continue to pay attention to the performance expectation of the first quarter. We expect that the glass fiber and retail building materials sectors are relatively prominent, [ China Jushi Co.Ltd(600176) ] [ Jiangsu Changhai Composite Materials Co.Ltd(300196) ] [ Shandong Fiberglass Group Co.Ltd(605006) ] are expected to show a simultaneous increase in volume and price, and benefit from overseas demand. In addition, we continue to be optimistic about the support of rigid demand + the restoration of the real estate boom, the superposition of the slowdown of hardcover, and the better cash flow and profit margin of retail and distribution mode. The core recommendation is [ Zhejiang Weixing New Building Materials Co.Ltd(002372) ], high-quality profitability and concentric circle acceleration; Focus on the [ Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) ] launched by the C-end and integrated company, and [ Dehua Tb New Decoration Material Co.Ltd(002043) ] with outstanding retail brand strength.
Risk warning: policy changes are less than expected; The risk of credit tightening; The risk of continued tightening of real estate regulation.
