Market Review
In the past five trading days (04110415), the CSI 300 fell 0.99%, the building materials (CITIC) index fell 5.13%, all sub sectors fell, and the decline of consumer building materials and glass fiber was relatively small. Recently, the market style has changed rapidly, and the building materials index performed better in the previous week, which may be the main reason for the large decline last week. Among individual stocks, Guangdong Sanhe Pile Co.Ltd(003037) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Ningxia Qinglong Pipes Industry Group Co.Ltd(002457) , Xinjiang Guotong Pipeline Co.Ltd(002205) , Dayu Water-Saving Group Co.Ltd(300021) ranked first in terms of income.
The consumption probability of building materials is higher than that of Shanghai and Shenzhen, and the performance of building materials is lower than that of Shanghai and Shenzhen
Among the 17 RRR reductions after 2015, construction achieved 8 excess returns and building materials achieved 12 excess returns. However, the RRR reduction market of the construction sector after 2019 was weak, and building materials maintained a relatively high winning rate. We believe that after the local government's leverage reduction was strengthened in 2018, the market's expectation of infrastructure investment decreased, and the construction market is more related to the policy expectation, but less related to the realization of the fundamentals of the implementation of the policy, which may be the reason why the trend of construction is weaker than that of building materials after the introduction of the RRR reduction policy after 2019. Building materials benefited from the high boom of the lower reaches of the real estate in 18-20 years, and the probability of obtaining excess returns after the RRR reduction is very high. After 2018, the range from the announcement date of the RRR reduction to 30 trading days after the implementation date is the research object. Consumer building materials (other decorative materials and ceramics) and cement perform well after the RRR reduction, and the average increase is significantly higher than that of other sectors. In the last seven RRR reductions, only two times did the increase of consumption of building materials not reach the top two. In April of 20, it ranked third overall. The glass and glass fiber whose product prices were in the rapid upward period at that time ranked top. In July of 21, it was because the risk exposure of real estate capital chain had a great impact on its market. We believe that the current real estate policy and the fundamentals of consumer building materials have been in the improvement cycle, and the valuation of consumer building materials varieties is also at a historically low level. Therefore, after this round of RRR reduction, consumer building materials are still expected to be one of the best performing sub sectors of building materials.
Taking MLF and reverse repurchase interest rate as statistical standards, the interest rate cut also brings excess returns to the building materials sector with a high probability. For example, after the reduction of the one-year MLF, the probability of the construction sector running out of the excess return in the next 30 days is 40%, while that of the building materials is 60%, and in the case of no running out of the excess return, it is basically level with the CSI 300. During the 7-day and 14 day reverse repo interest rate decline after 19 years, building materials only lost CSI 300 in individual cases and won in most cases.
Continue to be optimistic about stable growth and fundamental reversal, and recommend the consumption of building materials / pipelines / cement, etc
1) influenced by the prosperity of real estate, capital chain and cost pressure last year, the above factors are expected to gradually improve. In the medium and long term, the leading companies have started channel reform, and the scale effect is expected to continuously improve the industry concentration, both long and short; 2) The downstream of the plastic pipeline sector has both infrastructure and real estate. The infrastructure end is expected to benefit from the warming of municipal pipe network investment, and the logic of the real estate end is similar to that of consumer building materials; 3) Cement is expected to benefit from the improvement of follow-up infrastructure and real estate demand. In the medium and long term, the supply pattern is expected to be continuously optimized; 4) At present, the market value of the leading glass enterprises is at a low level. At present, they are in the period of accelerated resumption of work in spring, and the glass price is expected to gradually rise. This year, the overall supply and demand of the industry may still be in a tight balance, the unit profit of float glass is expected to be relatively stable, photovoltaic glass is expected to benefit from the recovery of the industrial chain, and electronic glass is expected to benefit from the large volume of new products such as domestic substitutes and folding screens; 5) The demand side of glass fiber is driven by the downstream of wind power and overseas, and the increment on the supply side is limited.
Investment advice
Recommendations for consumer building materials Monalisa Group Co.Ltd(002918) , Dehua Tb New Decoration Material Co.Ltd(002043) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Beijing New Building Materials Public Limited Company(000786) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , etc; The pipeline recommends China Liansu, Shandong Donghong Pipe Industry Co.Ltd(603856) , ad shares, etc; Cement recommendations Gansu Shangfeng Cement Co.Ltd(000672) , Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) , Jiangxi Wannianqing Cement Co.Ltd(000789) ; Glass recommended Triumph Science & Technology Co.Ltd(600552) , Zhuzhou Kibing Group Co.Ltd(601636) , Xinyi Glass, etc; Glass fiber recommendation China Jushi Co.Ltd(600176) , Sinoma Science & Technology Co.Ltd(002080) etc;
Risk tip: the demand for infrastructure and real estate fell more than expected, affecting the rising trend of cement and glass prices; The promotion of old reform and new urbanization was less than expected.
