Macro data: the overall stability in the first quarter, real estate continued to bottom, and infrastructure showed resilience. According to the data of the National Bureau of statistics, from January to March, the national fixed asset investment (excluding farmers) increased by 9.3% year-on-year; Compared with the growth rate from January to February, it fell 2.9pct month on month. The growth rate of infrastructure investment in the first quarter showed resilience. The cumulative year-on-year growth rate of broad infrastructure investment reached 10.48%, which was + 1.87pct compared with the growth rate from January to February. In the subdivision, the investment in hydropower and thermal combustion increased significantly. The breakdown data of real estate investment have fallen, and are still in the bottom stage.
Looking forward to the second quarter, we believe that the demand for infrastructure investment or in the second quarter is better than the market expectation, while real estate sales may confirm the bottom in the second quarter. The epidemic and external factors bring short-term disturbance, which may affect the recovery pace of infrastructure investment. However, due to the forward development of finance, the overall macro liquidity is relatively abundant. In the second year of the 14th five year plan, provinces and cities actively carry out major project investment and strive to maintain the goal of "stable growth". With the subsequent epidemic gradually controlled, the demand for infrastructure investment is expected to exceed expectations in the second quarter and usher in substantial improvement in the peak season of the third quarter. In terms of real estate investment, according to historical data, the "four bottoms" (policy bottom, sales bottom, land acquisition bottom and construction bottom) can be observed successively in the whole chain of real estate recovery. At present, we are at a critical moment of transition from the bottom of the policy to the bottom of sales. If the urban policy-making real estate policy continues to be launched and the positive signal of "stabilizing real estate" released by the central government is superimposed, the bottom of sales may come in the second quarter of this year.
Cement: weak demand and poor overall performance. According to the Bureau of statistics, from January to March 2022, China's cumulative cement output was 387 million tons, a year-on-year decrease of 12.1%. In March, China's monthly cement output was 187 million tons, a year-on-year decrease of 5.6%. In mid April, the demand of China's cement market was affected by the epidemic control, the overall performance was still poor, and the average shipment rate of enterprises fell by 25 percentage points year-on-year. In terms of inventory, the national cement storage capacity ratio continued to rise in mid April, reaching 67%, up 19% year-on-year. As of last week, the national cement price was 510 yuan / ton, up 26.4 yuan / ton year-on-year.
Glass: high inventory and delayed demand. From January to March 2022, the output of flat glass was 253 million heavy boxes, an increase of 2.0% year-on-year. In March, the output of flat glass in a single month was 87.22 million heavy boxes, an increase of 2.2% year-on-year. Under the background of capacity constraints, the overall output of glass was stable. Since March, the demand recovery has continued to be weak, and the enterprise inventory has gradually increased. As of last week, the enterprise inventory totaled 67.26 million heavy boxes, three times that of the same period last year. In the later stage, the release of market demand is relatively limited, but in the later stage, with the gradual recovery of transportation in some areas, the manufacturer's inventory growth or storage is expected to slow down. As of last week, the average price of float glass in the national market was 1975 yuan / ton, down 297 yuan / ton compared with the same period last year.
Investment suggestion: at present, the real estate is still in the process of bottoming out, and the hedging of infrastructure investment is more important. The impact of the recent epidemic on the construction rhythm may release the demand in the third and fourth quarters. 1) Cement: it mainly depends on the expectation after the epidemic repair. It is suggested to pay attention to the leading cement enterprises along the river with large price elasticity and strong performance certainty in peak season, as well as the leading enterprises in North China and Northeast China that are actively integrating recently; 2) Glass: the float price is continuously falling under the pressure of demand and cost. We believe that the current profit level of glass enterprises may be close to the profit and loss line. However, after recent adjustment, the float leader has a certain profit barrier and other new business layout, which has a certain long-term investment value; 3) Consumer building materials: the recent recovery of real estate policy is expected to be good for short-term demand. 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. Pay attention to the leader of consumer building materials with strong anti risk ability.
Risk warning: the demand for infrastructure and real estate investment is less than expected; The price rise of raw materials exceeded expectations; Other policies and industry risks.
