Haitong construction's monthly follow-up series of reports mainly systematically combs and analyzes the market public data such as downstream and forward-looking data indicators, industrial policy changes, the latest order progress and upstream indicators, and studies and judges the industry trend.
Downstream and forward-looking indicators - infrastructure investment, manufacturing and real estate maintain positive investment growth. From January to March 2022, fixed asset investment increased by 9.3% year-on-year, 2.9 percentage points lower than the growth rate from January to February. From January to March 2022, the capital construction investment (excluding power) increased by 8.5% year-on-year, and the capital construction investment (excluding power) in March alone increased by 8.8% year-on-year, including the investment in water conservancy management industry increased by 10.0%; Investment in public facilities management increased by 8.0%; Investment in road transportation increased by 3.60%; Investment in railway transportation industry decreased by 2.90%; Investment in water transportation increased by 13.50%; Investment in air transport industry decreased by 0.40%. From January to March 2022, the investment in real estate development increased by 0.7% at the same time, 3 percentage points lower than the growth rate from January to February; The sales area of commercial housing decreased by 13.8% year-on-year, expanding by 4.2 percentage points compared with the decline from January to February. In terms of new construction, from January to March 2022, the new construction area of houses decreased by 17.5% year-on-year, expanding by 5.3 percentage points compared with the decline from January to February; In terms of completion, the completed area of houses decreased by 11.5% year-on-year, an increase of 1.7 percentage points compared with the decline from January to February. From January to March 2022, the manufacturing investment increased by 15.60% year-on-year, 5.3 percentage points lower than the growth rate from January to February; In March 2022, the official manufacturing PMI was 49.50%, down 0.7 percentage points from February, below the balance line of prosperity and decline; Caixin manufacturing PMI was 48.1%, down 2.3 percentage points from February, below the balance line of prosperity and decline line.
Order tracking - orders of several central enterprises increased rapidly. The monthly order data of construction central enterprises show that many companies maintain rapid growth. From January to March 2022, Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) , China State Construction Engineering Corporation Limited(601668) , Metallurgical Corporation Of China Ltd(601618) , China National Chemical Engineering Co.Ltd(601117) new orders increased by 7.04%, 12.62%, 13.74% and 90.05% respectively year-on-year, 5.37%, 5.92, -0.89 and 2.52 percentage points higher than the growth rate in February. In the first quarter of 2022, the newly signed orders of China Railway Group Limited(601390) and China Railway Construction Corporation Limited(601186) increased by 83.99% and 1.53% respectively year-on-year. From January to March 2022, the completion amount of China's foreign contracted projects decreased by 3.7% year-on-year, an increase of 2.2 percentage points compared with the decline from January to February; The newly signed contract amount of foreign contracted projects decreased by 11.5% year-on-year; Among them, one belt, one road, 1-2 months, the completion of foreign contracted projects decreased by 2.60% compared with the same period in January 2022, which was 11.5 percentage points lower than that in January 2022. One belt, one road, signed new contract projects increased by 19.10% over the same period, and the growth rate was obviously rising. The number of inbound PPP projects increased and the landing rate continued to increase.
The impact of PPP project specifications was gradually eliminated, and the number of PPP projects put into storage in February 2022 increased by 3.49% year-on-year; The total investment in warehousing projects increased by 4.70% at the same time. At the same time, the landing rate of the project continued to improve, reaching 75.73% as of February.
Upstream - cement production and excavator sales decreased significantly. From January to March 2022, the national cement output decreased by 12.10% year-on-year, 5.7 percentage points lower than the decline from January to February. From January to March 2022, the sales volume of excavators in China decreased by 39.20% year-on-year, 22.88 percentage points higher than the decline from January to February. We believe that this is related to the impact of the epidemic in early 2022. From January to march in 2022, the power consumption of the whole society increased by 5.0%, down 0.79 percentage points from January to February.
Investment suggestion: under the triple pressure of economy, investment is still an important starting point. We believe that we have firm confidence in steady growth and continue to be fully optimistic about the market of the construction sector. We suggest to pay attention to: 1) steady growth of infrastructure construction: Central Construction Enterprises: Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) , China State Construction Engineering Corporation Limited(601668) , China Communications Construction Company Limited(601800) , China Railway Group Limited(601390) , China Railway Construction Corporation Limited(601186) , China National Chemical Engineering Co.Ltd(601117) , China Energy Engineering Corporation Limited(601868) , Metallurgical Corporation Of China Ltd(601618) ; 2) Local leaders China Design Group Co.Ltd(603018) , Anhui Construction Engineering Group Corporation Limited(600502) , Shandong Hi-Speed Road&Bridge Co.Ltd(000498) . 3) Building new track leaders: Cofco Engineering & Technology Co.Ltd(301058) , Anhui Honglu Steel Construction(Group) Co.Ltd(002541) , Center International Group Co.Ltd(603098) , Suwen Electric Energy Technology Co.Ltd(300982) .
Risk tips: the risk of policy implementation falling short of expectations, bad debt risk of payment collection, and price fluctuation risk of raw materials.
