This week (2022.4.10 – 2022.4.15, the same below): the building decoration sector (SW) rose or fell by – 5.48% this week. In the same period, the Shanghai and Shenzhen 3 million a index rose or fell by – 0.99% and – 2.46% respectively, and the excess return was – 4.49% and – 3.02% respectively.
Comments on important industrial policies, event changes and data tracking: (1) the national development and Reform Commission held a special press conference to introduce the situation of actively expanding effective investment: as of April 15, the national development and Reform Commission had approved 32 fixed asset investment projects with a total investment of 520 billion yuan, including 24 and 8, mainly in transportation, water conservancy, energy, high technology and other industries. Do a good job in expanding effective investment and focus on key areas. One is infrastructure construction. In accordance with the requirements of moderately advanced infrastructure investment, we will promote the construction of infrastructure such as water conservancy, transportation and energy, accelerate the aging renovation of urban gas pipelines and the construction of drainage and waterlogging prevention facilities, and strengthen the construction of new infrastructure. (2) Shanghai Stock Exchange publicly solicits opinions on the raising rules of REITs for infrastructure: the introduction of REITs raising mechanism is conducive to the listed high-quality operators to acquire assets by issuing additional shares based on the market mechanism, optimize the investment portfolio, promote M & A activities, and truly realize the long-term strategic value and sustainable development ability of REITs as an “asset listing platform”, which is conducive to the formation of market-oriented survival of the fittest, promoting a virtuous circle of investment and financing Improve the overall market performance of REITs, accelerate the improvement of REITs market and the growth of market scale, revitalize the existing infrastructure assets, improve the financing and financing capacity of enterprises, and strengthen the guarantee of capital elements of infrastructure projects. (3) The people’s Bank of China released financial data for March 2022: the total amount of social finance data in March exceeded expectations, but structurally, the increment of medium and long-term loans at the enterprise and resident ends is still weak, reflecting that the transmission of broad currency to the real economy is controlled by the decline of real estate and epidemic management. Considering that under the centralized cashing pressure of real estate enterprises in May and June, the repair of real estate investment is still limited, and infrastructure needs to be strengthened in the short term to hedge against the economic downturn, the broad monetary steady growth policy is expected to be further strengthened.
Zhou viewpoint
This week, the central bank lowered the reserve requirement, all localities continued to deregulate the real estate, Nanjing relaxed the supervision of real estate funds, and released the relaxation signal on the supply side, indicating that the policy relaxation is still increasing. Although the rapid rise of inflation restricts the relaxation of short-term monetary policy, the epidemic also hinders the sensitivity of monetary relaxation to the real economy. Infrastructure development and real estate relaxation are expected to continue to increase. The early fiscal revenue and expenditure and the issuance of special bonds reflect the continuous efforts of fiscal policies to ensure the capital side. This week, the raising rules for infrastructure REITs were issued for public comments. The raising mechanism is also conducive to the accelerated expansion of the market scale of REITs. The PMI of the construction industry, provincial investment plans and enterprise orders indicate that the pace of project implementation has been significantly accelerated. This round of policies focuses on supporting transportation, affordable housing projects, water conservancy and other fields, The pull on traditional transportation and municipal infrastructure projects is still prominent, and the implementation of orders is expected to continue to accelerate.
We suggest paying attention to the investment opportunities in the construction sector from the following three directions: (1) the prosperity of the infrastructure municipal chain and the improvement of valuation under the continuous force of steady growth: we are optimistic about the opportunities for the continuous repair of the valuation of leading infrastructure enterprises with historically low valuation and stable performance. From the perspective of historical recovery, central infrastructure enterprises enjoy continuous excess returns from the stage of broad monetary force to economic stabilization, and pay attention to China Communications Construction Company Limited(601800) , China Railway Group Limited(601390) , China Railway Construction Corporation Limited(601186) Jsti Group(300284) , China State Construction Engineering Corporation Limited(601668) (China Shipping asset valuation repair), etc. (2) There are bright spots in the demand structure and investment opportunities under the incremental development of new businesses: with the promotion of policies such as double carbon strategy and green and energy-saving buildings, the prosperity of fabricated buildings, energy conservation and carbon reduction and infrastructure segments related to new energy is high, and enterprises with relevant transformation layout are expected to benefit. Last week, the 14th five year plan for building energy conservation and green building development was issued, which proposed to promote building photovoltaic, prefabricated construction and decoration. It is suggested to pay attention to Anhui Honglu Steel Construction(Group) Co.Ltd(002541) , Shenzhen Capol International&Associatesco.Ltd(002949) , Zhejiang Yasha Decoration Co.Ltd(002375) , China Railway Prefabricated Construction Co.Ltd(300374) ; Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) , China Energy Engineering Corporation Limited(601868) , etc. of new energy business transformation and incremental development; Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , Center International Group Co.Ltd(603098) , Zhejiang Southeast Space Frame Co.Ltd(002135) and others benefiting from the large volume of building photovoltaic market, and Jiangxi Geto New Materials Corporation Limited(300986) and other leasing service providers of green building materials (aluminum formwork). (3) Direction of state-owned enterprise reform: 2022 is the end of the three-year action of state-owned enterprise reform. It is expected that while the reform of state-owned enterprises is advancing steadily, the previous reform dividends in corporate governance structure, strengthening incentives, mixed reform, improving efficiency and stimulating vitality are expected to enter the release period. It is suggested to pay attention to the directions of performance improvement with cost reduction and efficiency increase, new business transformation layout and asset reorganization, and Sichuan Road & Bridge Co.Ltd(600039) , Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) Shandong Hi-Speed Road&Bridge Co.Ltd(000498) , Metallurgical Corporation Of China Ltd(601618) etc.
Risk tips: the epidemic situation exceeded expectations, the real estate credit risk was out of control, the policy concentration exceeded expectations, and the progress of state-owned enterprise reform was lower than expected.
