This week's opinion update:
"Steady growth" promotes the high growth of infrastructure investment, and REITs is still expected to be an important source of funds: under the guidance of "steady growth", the narrow infrastructure investment was + 8.8% year-on-year in March 2022. At the same time, the orders of central construction enterprises, cement output and other relevant data of building materials also reflect that infrastructure has significantly boosted the demand of the industry. The "Article 23 on finance" issued by the people's Bank of China and the State Administration of foreign exchange aims to meet and guarantee the reasonable investment and financing needs of financing platform companies and support local infrastructure construction. However, from the perspective of policy orientation, the general direction of implicit debt control of local governments remains unchanged, and REITs is an important way to increase the source of funds. We continue to be firmly optimistic about investment opportunities in the "steady growth" sector, including central construction enterprises, local state-owned enterprises and design units in the construction industry, as well as cement and pipe network in the building materials industry.
The improvement of real estate fundamentals has yet to take time, and the "guaranteed delivery" has been substantially promoted: the real estate market environment has not been effectively improved, while the strict epidemic control policies in many parts of China in March exacerbated the further weakening of real estate data. "Financial Article 23" requirements: reasonably determine the minimum down payment proportion and minimum loan interest rate of commercial individual housing loans within the jurisdiction. In addition, the "guaranteed housing" has been substantially promoted. In the first quarter of 2022, the investment growth rate of real estate projects with a construction period of more than one year exceeded 10%. We emphasize that the 22-year "guaranteed delivery" is still the key direction throughout the year, and the float glass in the completion link is relatively optimal. Zhuzhou Kibing Group Co.Ltd(601636) , CSG a are recommended; The valuation of consumer building materials has been attractive to some extent, and the fundamentals of real estate hit the bottom in the later stage, which is conducive to the valuation repair of leading enterprises. Market performance and high frequency data tracking this week:
Market performance: this week, CITIC Building materials index was - 7.03%, of which glass sector decreased the least (- 3.88%) and other structural materials sector decreased the most (- 18.63%); CITIC construction index was - 6.22% this week, with the smallest decline (- 3.89%) in housing construction and the largest decline (- 7.69%) in professional engineering and other sectors; This week, the average decline of infrastructure public offering REITs was - 1.62% (arithmetic average), of which Ping An Guangzhou Guanghe REIT fell the least (- 0.03%), and Wells Fargo's first water REIT fell the most (- 4.24%).
High frequency data (4.16-4.22): cement: po42 this week 5. The average price of cement is 518 yuan / ton, a month on month increase of + 0.63%; The storage capacity ratio was 66.38% and the chain ratio was -0.81pct. Glass: this week's glass inventory was 68.451 million heavy boxes, a month on month increase of + 1.76%. The average price of 3.2mm photovoltaic glass was 27.5 yuan / m2, unchanged month on month; The average price of 2mm photovoltaic glass was 21.20 yuan / m2, unchanged month on month; Glass fiber: the price of winding direct yarn this week was 6450 yuan / ton, unchanged month on month; The price of G75 electronic yarn was 8750 yuan / ton, unchanged month on month. Carbon fiber: the average market price of carbon fiber this week was 186.25 yuan / kg, unchanged month on month; The average price of large tow in China is 145 yuan / kg, and the average price of small tow in China is 225 yuan / kg, which is flat month on month.
Investment suggestions:
Building materials sector: in the direction of periodic products, float is the best at this stage (it is suggested to pay attention to: Zhuzhou Kibing Group Co.Ltd(601636) , Shandong Jinjing Science And Technology Stock Co.Ltd(600586) etc.); In the direction of capital construction, pay attention to the elasticity of cement and some pipeline enterprises (it is suggested to pay attention to: Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) , Shandong Donghong Pipe Industry Co.Ltd(603856) ); The time point for strategic layout of consumer building materials has come (it is suggested to pay attention to: Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Beijing New Building Materials Public Limited Company(000786) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Guangdong Kinlong Hardware Products Co.Ltd(002791) ); New material direction, continue to recommend Luyang Energy-Saving Materials Co.Ltd(002088) , Triumph Science & Technology Co.Ltd(600552) .
Construction sector: optimistic about the equipment operating lease sector (it is recommended to pay attention to: Zhejiang Huatie Emergency Equipment Science & Technology Co.Ltd(603300) , Jiangxi Geto New Materials Corporation Limited(300986) etc.); Revaluation of sector value brought by public offering REITs of infrastructure construction (it is suggested to pay attention to: China Communications Construction Company Limited(601800) , China Railway Group Limited(601390) and other central enterprises); Optimistic about the trend of affordable housing and the investment opportunities of prefabricated buildings (it is recommended to pay attention to: Shenzhen Capol International&Associatesco.Ltd(002949) , Anhui Honglu Steel Construction(Group) Co.Ltd(002541) , Zhejiang Yasha Decoration Co.Ltd(002375) , etc.); Some undervalued local state-owned enterprises also have good allocation value (recommended attention: Shandong Hi-Speed Road&Bridge Co.Ltd(000498) , Shaanxi Construction Engineering Group Corporation Limited(600248) , Henan Provincial Communications Planning & Design Institute Co.Ltd(300732) , etc.); Be optimistic about the development trend of green building industry and pay attention to the thematic opportunities of building energy conservation.
Preferred combination: preferred combination: Zhejiang Huatie Emergency Equipment Science & Technology Co.Ltd(603300) (28xpe, UTG volume soon
Electronic new material value discovery). Note: the valuations are the 22-year forecast data of Everbright Building Materials team. Risk analysis: infrastructure investment is less than expected; Real estate investment fell sharply; Rising raw fuel prices; The epidemic situation is repeated.
