Key investment points
This week (2022.1.4 – 2022.1.7, the same below), the building materials sector (CITIC) rose or fell by 1.88%. Over the same period, the Shanghai Composite Index and wandequan a index rose or fell by – 1.65% and – 2.61% respectively, and the excess returns were 3.53% and 4.49% respectively.
Fundamentals and high-frequency data of bulk building materials: (1) cement: the market price of high-standard cement in China this week was 541.0 yuan / ton, down from – 8.0 yuan / ton last week, up from + 89.0 yuan / ton in the same period in 2021. There are no areas where prices rise; The regions where prices fell were: Yangtze River Delta (- 20.0 yuan / ton), Yangtze River Basin (- 20.0 yuan / ton), pan Beijing Tianjin Hebei (- 8.3 yuan / ton), Guangdong and Guangdong (- 15.0 yuan / ton), Central South (- 18.3 yuan / ton) and Southwest (- 6.0 yuan / ton). The average cement storage location of the national sample enterprises this week was 62.0%, with a month on month ratio of -0.2pct, which was + 6.7pct compared with the same period in 2021. The average cement delivery rate (daily delivery rate / production capacity in process) of the national sample enterprises this week was 33.6%, with a month on month ratio of -0.8pct, compared with -9.8pct in 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 was 2107.7 yuan / ton, with a month on month ratio of – 58.2 yuan / ton and a year-on-year ratio of – 236.5 yuan / ton. The inventory of enterprises in the province was 2.79 million boxes, representing a year-on-year increase of 2.47 million boxes. (3) Glass fiber: the median turnover of alkali free 2400tex direct yarn was 6150 yuan / ton, the same as last week, with a year-on-year increase of + 500 yuan / ton.
Zhou viewpoint
In addition to continuing to be optimistic about the post real estate industrial chain, we believe that the issuance of special bonds will be accelerated and the financial advance will be strengthened, and the key fields such as water conservancy, transportation and municipal administration will continue to make efforts. Pipeline reconstruction and urban rail transit are expected to become structural highlights. It is suggested to pay attention to the pre and medium cycle varieties with low valuation such as cement and pipe materials.
In terms of bulk building materials: infrastructure is expected to rebound under the force of fiscal policy, and the policies of affordable housing and guaranteed delivery housing stabilize the expectation of real estate investment. Based on the peak staggering and the strengthening of industry self-discipline, we estimate that the supply capacity of the industry after eliminating the peak staggering will decrease by 0.1% year-on-year in 2022. With the support of stable investment on demand, the cement boom can still remain high. The dividend yield of 5 ~ 9% in 2021 makes the current P / E ratio of 6 ~ 7 times have room to repair. It is recommended to pay attention to Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) and Gansu Shangfeng Cement Co.Ltd(000672) with strong performance certainty, bright spots in the extension of medium and long-term industrial chain, Guangdong Tapai Group Co.Ltd(002233) , Jiangxi Wannianqing Cement Co.Ltd(000789) with high dividend yield, and Tangshan Jidong Cement Co.Ltd(000401) , Xinjiang Tianshan Cement Co.Ltd(000877) which are expected to benefit from the integration of the northern market and great business elasticity.
Decoration and building materials: we expect the infrastructure chain to grow steadily and counter cyclical adjustment to boost demand. Recently, the central government mentioned that the new special bonds focus on water conservancy, transportation, municipal infrastructure construction, affordable housing projects and other fields. The Ministry of water resources mentioned the implementation of major national water network projects. We expect that the construction of underground pipe network and sponge city will bring sustainable increment during the 14th five year plan period. The completion end of the real estate remained resilient, but the new construction and sales remained weak. In terms of real estate, the easing signal has been gradually released, and the bottom of the policy has been found. We expect that the financing end of subsequent real estate enterprises and consumers is expected to be slightly relaxed. In addition, accelerating the construction of affordable rental housing during the 14th Five Year Plan period will bring some increment. Previously, the decoration building materials sector was affected by the slowdown in demand, the rise of raw materials and cash flow pressure. The valuation has been in the lower position of the historical center. With the relaxation of the real estate margin, the overall sector is expected to usher in performance and valuation repair. It is recommended to pay attention to Guangdong Kinlong Hardware Products Co.Ltd(002791) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , and China Liansu, Yonggao Co.Ltd(002641) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Beijing New Building Materials Public Limited Company(000786) , Keshun Waterproof Technologies Co.Ltd(300737) , Jiangsu Canlon Building Materials Co.Ltd(300715) , Monalisa Group Co.Ltd(002918) , Zhejiang Walrus New Material Co.Ltd(003011) .
Risk warning: the epidemic situation exceeded expectations, the real estate credit risk was out of control, and the policy concentration exceeded expectations.
