Key investment points
This week (2022.4.6 – 2022.4.8, the same below): the building materials sector (SW) rose or fell by 3.93% this week. In the same period, the CSI 3 million and wandequan a index rose or fell by – 1.06% and – 1.74% respectively, and the excess return was 4.99% and 5.67% respectively.
Fundamentals and high-frequency data of bulk building materials: (1) cement: the national high-standard cement market price this week was 507 yuan / ton, which was – 3 yuan / ton compared with last week and + 56 yuan / ton compared with the same period in 2021. Regions with higher prices than last week: Southwest Region (+ 8 yuan / ton) and Yangtze River Basin (+ 2 yuan / ton); Areas where prices fell: Yangtze River Delta (- 5 yuan / ton), pan Beijing Tianjin Hebei (- 5 yuan / ton), East China (- 5 yuan / ton), Central South (- 8 yuan / ton) and Northwest (- 10 yuan / ton). The average cement storage location of the national sample enterprises this week was 64.0%, which was + 1.4pct compared with last week and + 16.6pct compared with the same period in 2021. The average cement delivery rate (daily delivery rate / production capacity in process) of the national sample enterprises was 53.0%, which was + 1.2pct compared with last week and – 26.0pct compared with the same period in 2021. (2) Glass: according to the statistics of Zhuo Chuang information, the average price of the national float white glass original sheet is 2046 yuan / ton, which is – 13 yuan / ton compared with last week and – 247 yuan / ton compared with the same period in 2021. According to the statistics of Zhuo Chuang information, the original film inventory of sample enterprises in 13 provinces in China was 57.73 million heavy boxes, up from + 890000 heavy boxes last week and + 27.96 million heavy boxes in the same period in 2021. (3) Glass fiber: the median turnover of alkali free 2400tex direct yarn is 6150 yuan / ton, which is the same as last week and + 50 yuan / ton compared with the same period in 2021.
Zhou’s view: the possibility of the epidemic is higher than expected, which further increases the necessity of steady growth and risk prevention. Although Guangzhou relay loan and Yanjiao down payment were stopped, indicating that the relaxation of front-line real estate is still relatively restrained, the recent high-level meeting continued to report steady growth, and the infrastructure orders disclosed by infrastructure central enterprises also increased year-on-year. We believe that building materials have entered a rising stage similar to the expected steady growth in November 2021. As a core variety in the investment chain, there are opportunities for both cyclical and growing building materials. It is suggested to pay attention to Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Keshun Waterproof Technologies Co.Ltd(300737) , Guangdong Kinlong Hardware Products Co.Ltd(002791) , Beijing New Building Materials Public Limited Company(000786) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Huaxin Cement Co.Ltd(600801) , Gansu Shangfeng Cement Co.Ltd(000672) , Anhui Conch Cement Company Limited(600585) , China Liansu, etc.
In terms of bulk building materials: steady growth is expected to continue to rise. In the short term, under the pressure of centralized cashing in May and June, it is difficult to significantly accelerate the speed of real estate construction. Infrastructure needs to be strengthened to hedge against the economic downturn, and cement demand and profit are expected to rebound in the medium term. The epidemic has a short-term impact on delivery, but the price drop is limited. It is expected that with the mitigation of epidemic control, cement is expected to return to the normal rhythm of price increase. The implementation of infrastructure projects is expected to show significant improvement in the second quarter. The markets along the Yangtze River and the Pearl River Delta with relatively high core capacity utilization and good industry pattern are expected to see more than expected cement price elasticity. Industry self-discipline + potential environmental protection and energy consumption constraints shrink the supply capacity of the industry. In the medium term, the capacity utilization rate of the industry is expected to remain high, and the profit center will remain medium to high. The dividend yield of 5 ~ 8% in 2021 makes the current valuation of 7 times P / E ratio have room for repair. It is suggested to focus on Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) and Gansu Shangfeng Cement Co.Ltd(000672) with strong performance certainty and bright spots in the extension of medium and long-term industrial chain, and Tangshan Jidong Cement Co.Ltd(000401) , Xinjiang Tianshan Cement Co.Ltd(000877) , Gansu Qilianshan Cement Group Co.Ltd(600720) , etc. that benefit from the integration of northern market and great business elasticity in the medium and long term.
Decoration building materials: previously, the valuation of the decoration building materials sector has been in the lower position of the historical center due to the impact of slowing demand, rising raw materials and cash flow pressure. Since March, waterproof material enterprises have intensively issued price raising letters for the recent sharp rise in raw material prices, which is expected to be reflected in Q2. Although the shipment of most enterprises was affected by the short-term epidemic in March, some front-line leading enterprises have had a high order growth rate. With the expectation of marginal relaxation of real estate, the decline of high raw material costs, the implementation of price transmission, the withdrawal of bad debts and the gradual release of cash flow risk expectations, the overall sector is expected to usher in performance and valuation repair. Referring to the historical experience of the consumer building materials sector and the current competitive situation, in the stage of capital easing + confidence gradually recovering from the bottom of the real estate industry, some companies may take the lead to further increase their share and enter a new expansion cycle with the help of channel leading layout, operating efficiency advantage or financing plus leverage. The inflection point of shipment or order growth can be used as a signal on the right. Focus on Guangdong Kinlong Hardware Products Co.Ltd(002791) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Keshun Waterproof Technologies Co.Ltd(300737) , Beijing New Building Materials Public Limited Company(000786) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , China Liansu, ad shares, Monalisa Group Co.Ltd(002918) , Jiangsu Canlon Building Materials Co.Ltd(300715) , Zhejiang Walrus New Material Co.Ltd(003011) , etc.
Risk warning: the epidemic situation exceeded expectations, the real estate credit risk was out of control, and the policy concentration exceeded expectations.
