Key investment points
Key events of this week: 1) the prosperity of new material industry continues. Zhongfu Shenying was officially listed and traded on the science and Innovation Board on April 6. As the leader of high-performance carbon fiber, “Shenying” is expected to open a new chapter of “1-N” development Jiangsu Pacific Quartz Co.Ltd(603688) and its holding subsidiaries have resumed work and production in an orderly manner since recently. Previously, the company began to implement the temporary shutdown of some production sections from March 11 in response to the requirements of epidemic prevention. We expect that the production reduction arrangement will have a limited impact on the performance of 22 years. Chinese carbon fiber enterprises seize the historical opportunity of domestic substitution and accelerate the expansion of production capacity. Hengshen Co., Ltd. plans to invest in the construction of a 20000 t / a high-performance carbon fiber production base in Yulin, Shaanxi Province. The first phase plans to build 5000 tons, including a dry jet wet spinning carbonization line, a large tow carbonization line and supporting precursor production line. The investment in phase I of the project is 1.32 billion yuan (including land use right), and the construction period is expected to be 20 months.
2) equity incentive of brand building materials helps release business vitality. The income of PVC flooring leaders reached a new high In Zhejiang Walrus New Material Co.Ltd(003011) 21, the company realized revenue and net profit attributable to parent company of RMB 1.80/100 billion, with a year-on-year increase of + 46.9% / – 48.5%. The demand for PVC flooring export orders of the company continues to be strong. The follow-up production of China’s raised investment project and Vietnam’s third plant is expected to provide important support for the company’s 22-year business growth. Ceramic tile leader promotes equity incentive Guangdong Dongpeng Holdings Co.Ltd(003012) it is proposed to grant 40 million stock options to 6 senior executives, 236 core managers / technicians and other incentive objects, accounting for about 3.4% of the total share capital. The first exercise price is planned to be 9.09 yuan / share. The performance (100% exercise) assessment requirements at the company level are: Based on 21 years, the revenue growth rate in 22-24 years shall not be less than 10% / 20% / 30%. 3) The sales volume declined and the cost increased. The performance of cement enterprises in 22q1 was pre reduced. The follow-up monetary policy made steady growth, and the industry demand is expected to boost Guangdong Tapai Group Co.Ltd(002233) / Gansu Qilianshan Cement Group Co.Ltd(600720) issued the announcement of performance reduction. The net profit attributable to the parent company of 22q1 decreased by 86% ~ 80% / 87% ~ 99% respectively year-on-year. The covid-19 epidemic and slow construction recovery affected the cement sales. Among them, the sales volume of Guangdong Tapai Group Co.Ltd(002233) decreased by 25%, and the profitability decreased due to the rise of coal price. On April 6, the national standing committee pointed out that it is necessary to flexibly use a variety of monetary policy tools in due time, give better play to the dual functions of aggregate and structure, and increase support for the real economy. Infrastructure and real estate chain sectors are expected to continue to benefit. 4) The leading performance of float was the best in history, and the price of photovoltaic glass continued to rise at the bottom In Zhuzhou Kibing Group Co.Ltd(601636) 21 years, the income and net profit attributable to the parent company reached 14.57/4.23 billion, yoy + 51.1% / + 133.4%, with the best performance in history. The company announced five new 1200t / D photovoltaic glass production lines. We expect that by the end of the year, the company will have a total capacity of 13000d / T photovoltaic glass outside China, and the capacity scale will rank among the first echelon of the industry. This week, the mainstream quotation for 3.2mm coating of photovoltaic glass is 27.5 yuan / flat (mom + 6%, yoy – 2%), and there is still price elasticity at the bottom of the industry cycle.
This week’s view: at the current time, we suggest paying attention to several main lines of building materials & new materials investment. First, the prosperity and performance cashing are selected from carbon fiber, quartz sand and glass fiber industries; Second, the marginal improvement of real estate policy, focusing on the layout of brand building materials; Third, cement and water reducing agent are selected for the main line of steady growth; Fourth, at the bottom of the photovoltaic glass industry cycle, with the support of cost, the industry basically has no downside risk; Float glass prices stabilized and rebounded while demand boosted. 1) In the field of new materials, the “limited overseas supply”, the explosion of demand in new energy fields such as wind, light and hydrogen downstream of carbon fiber, and China’s leading “grinding a sword in ten years”; Domestic leaders have finished catching up. In the future, capacity expansion and cost reduction will lead to surpassing in the civil field; And we believe that the business continuity in the field of small and medium-sized tow is high. Zhongfu Shenying, a carbon fiber leader, was listed on the stock market on April 6. It is suggested to focus on it (see Zhongfu Shenying: high-performance carbon fiber leader, “Shenying” opens a new chapter of “1-N” development) and other targets of the carbon fiber industry chain, such as Jilin Carbon Valley, Jilin Chemical Fibre Co.Ltd(000420) etc. High purity quartz sand / electronic cover glass ushered in the industrial opportunity of high demand increase + domestic alternative resonance, and UTG welcomed the outbreak of demand. 2) The layout of brand building materials is at the right time. Since the second half of the year, the valuation and performance of brand building materials have been killed under weak demand + capital pressure + high cost. In the absence of significant improvement in real estate fundamentals, the policy continued to relax expectations, the credit risk faced by the real estate chain and the pessimistic expectation of market demand were repaired, and the sector rebounded as a whole. According to the historical resumption, the end of the general real estate policy corresponds to the end of the valuation of brand building materials. The end of this round of policy / valuation appears in 21q4. We expect the end of fundamentals to appear in 22q1. On the cost side, the reserves of raw materials with leading low price can generally cover 22q1, and the recent easing of the situation in Russia and Ukraine or the reduction of oil price can focus on the subdivision track with high correlation between cost and oil price. 3) The cost performance of cement allocation is high. The infrastructure development force and the marginal recovery of real estate under steady growth are expected to support the cement demand to maintain a high platform. However, the further coordination and optimization of cement core logic at the supply side in 22 years has generally strengthened the scope and intensity of peak staggering this year than last year, superimposing the high price center to maintain profitability and toughness. 4) From the perspective of water reducing agent, capital construction pull + gross profit margin rise + functional materials open up growth space. 5) The price of photovoltaic glass continues to rise due to the transmission of cost pressure. We believe that there is still price elasticity at the bottom of the industry cycle. We are optimistic about the adverse expansion and cost competitiveness of leading enterprises, and focus on the profit elasticity and long-term growth brought by the expansion of traditional glass into the field of photovoltaic glass; The price of float glass fell slightly, and the price is expected to stabilize and recover with the gradual recovery of demand. 6) The glass fiber cycle is weakened, the roving boom is expected to continue (wind power, automobile and other strong support for demand), the price of electronic cloth has fallen to the bottom range, and the current safety margin is high.
New materials: 1) carbon fiber boom continues: at the end of this week, the average price of carbon fiber market was 186000 yuan / ton (flat month on month, year-on-year + 3.1), the average price of large tow was 145000 yuan / ton (flat month on month, year-on-year + 1.5), and the average price of small tow was 225000 yuan / ton (flat month on month, year-on-year + 4.5); At the weekend, the inventory of carbon fiber factory was 12 tons (unchanged month on month, year-on-year – 2). The price of raw material acrylonitrile was flat month on month, and the price of precursor ran smoothly. We believe that the investment logic of the civil carbon fiber industry lies not only in the high demand growth (wind, light, hydrogen, etc.), but also in the “favorable climate, favorable location and harmonious people”. After seizing the opportunity to catch up, we will further expand the scale and cost advantage and realize the historical opportunity of “domestic substitution” and transcendence. Under the barriers of high technology, technology and capital, those who win the “raw silk” win the world. In the medium and long term, with reference to glass fiber, the industry penetration increases or depends on changing “price” for “demand”. We suggest paying attention to Zhongfu Shenying (the company is a high-quality leader in the carbon fiber industry, with obvious advantages in technology, scale and cost, products, talents and shareholders. It is expected that with the landing of the company’s IPO and the full commissioning of the 10000 ton line of Xining base, the company’s sales growth and cost decline will enter the fast lane, which will continue to promote the domestic substitution of carbon fiber). At the same time, we suggest paying attention to Jilin Carbon Valley, Jilin Chemical Fibre Co.Ltd(000420) , Weihai Guangwei Composites Co.Ltd(300699) Sinofibers Technology Co.Ltd(300777) , Hengshen shares; Carbon fiber equipment manufacturer Zhejiang Jinggong Science & Technology Co.Ltd(002006) ; Downstream composite manufacturers Sinoma Science & Technology Co.Ltd(002080) , Kbc Corporation Ltd(688598) , Beijing Tianyishangjia New Material Corp.Ltd(688033) , Hongfa new materials, etc.
2) For the quartz glass industry, benefiting from the growth of photovoltaic installed capacity / the transformation of photovoltaic cells from p-type to n-type, the demand for high-purity quartz sand is growing rapidly, and the supply pattern of “two overseas + one large in China” has led to new controllable growth in the industry, and the supply and demand is expected to maintain a tight balance; The demand for semiconductor and military quartz materials is booming, and the barriers to qualification certification are high. Leading enterprises are expected to continue to increase the market share. Jiangsu Pacific Quartz Co.Ltd(603688) and Hubei Feilihua Quartz Glass Co.Ltd(300395) . 3) Electronic cover glass: Chinese enterprises have achieved a technological breakthrough and passed the downstream certification. Under the condition of improving the penetration rate of domestic mobile phones and ensuring the safety of the supply chain, domestic substitution is accelerated. It is recommended to pay attention to CSG a, which has achieved the iterative breakthrough of electronic cover technology and completed the verification of downstream mobile phone manufacturers. 4) UTG: the penetration acceleration of folding screen mobile phones + alternative CPI trend is obvious, and the demand welcomes the outbreak; Take the lead in realizing technological breakthrough and benefiting mass production enterprises. It is suggested to pay attention to Triumph Science & Technology Co.Ltd(600552) .
Brand building materials: under the pressure of the industry, the most difficult time for brand building materials has passed, and the leader welcomes light loading + counter trend expansion. 1) Since 21q4, “bottom of real estate policy + broad real estate market (affordable housing)” + landing of credit risk + stabilization and decline of raw material prices, and the expected bottom of brand building materials has been established. 2) From the 14-year and 18-year recovery, the expected bottom of the real estate corresponds to the bottom of the valuation of brand building materials. 3) Leading enterprises have strengthened their competitiveness and highlighted their growth (category expansion and application expansion) during the pressure period of the industry. The credit impairment of major enterprises has been implemented in 21 years, and the performance and valuation are expected to be restored in 22 years. Brand building materials, brand building materials, brand building materials, brand building materials. Leading enterprises have advantages in terms of brand / Channel / cost / capital, etc. both in terms of competitiveness and growth, they have the ability to cross cycles, and in terms of competitiveness and growth, they have the ability to go through cycles, and in the process of building the bottom, they are the first to break through the encirclement, seize the leading position, take the lead in the process of building the bottom, take the lead in the process of building the bottom, and actively lay out the leading. We recommend Beijing New Building Materials Public Limited Company(000786) \ , Guangdong Dongpeng Holdings Co.Ltd(003012) Wangli Security & Surveillance Product Co.Ltd(605268) , Asia Cuanon Technology (Shanghai) Co.Ltd(603378) , it is suggested to pay attention to China Liansu, Jiangsu Canlon Building Materials Co.Ltd(300715) , D&O Home Collection Co.Ltd(002798) .
Under the expected warming of steady growth, the cost performance of cement sector allocation is prominent. We believe that although there is a small single digit decline in demand in 22 years, it is expected to remain at a high platform period of more than 2 billion tons. Under the contraction of demand, the willingness of enterprise supply coordination is expected to increase. The cross shareholding of leading enterprises is expected to jointly lead the optimization of the industry, and the coal price is still rising, which is expected to promote the price to remain high. In the medium and long term, the dual carbon policy and dual control of energy consumption promote the optimization of the industry pattern. The industry has entered the integration period, and competition and cooperation gradually replace competition. Leading enterprises actively distribute aggregate, commercial concrete and other markets to contribute to growth, and the cost performance is prominent at low valuations. This week, the national cement market price fluctuated downward, down 0.6% month on month. The price decline areas are mainly concentrated in East China and Central South China, with a range of 20-30 yuan / ton; The price rise area is mainly Chongqing, with a range of 70-80 yuan / ton. After the Qingming Festival, the demand of China’s cement market increased slightly, and the cement price maintained a shock adjustment trend. This week, the national cement storage capacity ratio was 67.1%, with a month on month ratio of + 2.0pct and a year-on-year ratio of + 18.7pct. The shipment rate was 61.1%, with a month on month increase of + 3.0pct and a year-on-year increase of – 26.3pct. It is recommended to focus on Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) , Gansu Shangfeng Cement Co.Ltd(000672) , Guangdong Tapai Group Co.Ltd(002233) , and it is recommended to focus on Chinese building materials, Xinjiang Tianshan Cement Co.Ltd(000877) , Jiangxi Wannianqing Cement Co.Ltd(000789) .
Continue to focus on recommending the leader of China’s concrete water reducing agent industry Sobute New Materials Co.Ltd(603916) Sobute New Materials Co.Ltd(603916) recommendation logic: the company’s production capacity planning is clear, and it is expected to continue to grow in the next three years, with a rising market share; The price of raw material ethylene oxide is running at a low level. At the end of September, the price increase of the company is gradually implemented, and the gross profit margin in 22 years may increase significantly; The company’s functional materials (such as anti crack and anti-seepage agent, wind power grouting material, etc.) maintain a high growth, and is expected to grow into an admixture platform enterprise.
Photovoltaic glass prices pushed up; Building glass prices continued to fall. In terms of photovoltaic glass, the mainstream quotation of 3.2mm coating at the end of this week is 27.5 yuan / flat (mom + 6%, yoy – 2%); Inventory days are about 19.4 days (mom + 1%, yoy – 21%); The production capacity is 48000 T / D (mom + 7%, yoy – 21%). For photovoltaic glass, the new supply under the dual control of energy consumption may be less than expected, and the price at the bottom of the industrial cycle may be upward elastic. Optimistic about the revenue proportion of traditional glass enterprises in the field of photovoltaic glass and improve their cost competitiveness. The average price of float glass this week was 2046 yuan / ton (mom -13, yoy -245); Weekend inventory of 57.13 million heavy containers (mom + 89, yoy + 2798); The production capacity of glass in production is 172000 T / D (mom -0.05). China’s float glass market rose and fell this week, with little change in the overall price, and the transaction is still flexible. The downstream replenishment in some regions has temporarily come to an end, and the inventory in most regions has increased during the week. Recently, uncertain factors in the market have heated up, shipments in some regions are limited, and the market is too wait-and-see. The demand is not improved enough, the overall market expectation is still weak, and the short-term adjustment space is temporarily limited under the thin profit. Pay attention to the later logistics and transaction changes. We believe that under the “guaranteed delivery” of real estate, the toughness of glass demand is expected to be maintained. On the supply side, considering the high capacity utilization rate of the industry, the subsequent new capacity is limited; In addition, at present, in the production line, the proportion of kiln age production capacity of 8-10 years / 10-12 years / more than 12 years is 13.2% / 8.3% / 5.9% respectively. Cold repair of the old production line may lead to supply contraction. We expect the glass price to remain at a good level throughout the year. Continue to focus on recommending Zhuzhou Kibing Group Co.Ltd(601636) , and suggest paying attention to Xinyi Glass, CSG a, Shandong Jinjing Science And Technology Stock Co.Ltd(600586) , Luoyang Glass Company Limited(600876) , etc; At the same time, we continue to recommend photovoltaic glass leading Xinyi solar energy and Flat Glass Group Co.Ltd(601865) .
Glass fiber: the industry cycle is weakened and the boom is expected to continue. This week, the average price of 2400tex winding direct yarn was 6100 yuan / ton (flat month on month, year-on-year – 83); The average price of electronic yarn G75 is 8875 yuan / ton (Mom – 500, yoy – 6875); The mainstream price of electronic cloth is 3.5 yuan / meter (Mom – 0.2). We expect that the industry’s new roving / electronic yarn production capacity will be about 545 / 101000 tons respectively in 22 years, and the production line will be put into operation more dispersed. We expect that the marginal new production capacity of 22q1-22q4 will be 1.7/3.8/4.413000 tons / quarter respectively, with a relatively mild impact. We expect that the global roving supply and demand will be in tight balance in 22 years, and the price boom is expected to continue under the low inventory level. The energy cost of glass fiber accounts for about 20%, and the energy consumption is still high. Under the dual control of energy consumption, it is more difficult to increase the new capacity of the industry, and the uncertainty of landing rhythm increases. We believe that the new production capacity will still be dominated by leading enterprises, and the industry pattern is expected to continue to be optimized. The leading enterprises have core competitiveness such as cost and technology, and the continuous upgrading of product structure will hedge the periodicity to a certain extent. The competitiveness of the leading enterprises in the glass fiber industry is significantly enhanced both from the perspective of increasing market share and continuous decline of cost. We expect that the profitability of the bottom leading enterprises in the next round is expected to increase significantly compared with history. We continue to focus on recommending glass fiber leading enterprises China Jushi Co.Ltd(600176) , Sinoma Science & Technology Co.Ltd(002080) , Jiangsu Changhai Composite Materials Co.Ltd(300196) , Shandong Fiberglass Group Co.Ltd(605006) .
Risk warning: macroeconomic downside risk; Demand is lower than expected; Excessive new capacity; Poor capital turnover.
