Under the background of steady growth, the construction industry has attracted unprecedented attention. This year, the investment in infrastructure in all provinces and cities exceeded 12 trillion, and the investment in four provinces and cities exceeded 1 trillion. The orders of infrastructure listed companies in the first quarter increased by more than 40% year-on-year. In this context, securities times · databao launched the construction of the “bottom planter” series to sort out individual stocks in the construction industry from the perspective of order guarantee coefficient and future growth.
Affected by factors such as “shrinking demand, supply shock and weakening expectation”, China’s GDP increased by 4.8% year-on-year in the first quarter of this year, which is a certain gap from the annual target of 5.5%. To achieve the goal of steady growth, the steady growth measures and policy support deployed in the early stage are expected to increase in the future, the infrastructure will usher in a more relaxed policy environment, and the investment logic sustainability of the construction industry is expected to be enhanced.
major provinces and cities annual planned investment
significant growth
The financial structure data released in April was weaker than expected Citic Securities Company Limited(600030) believes that in the future, we need to put steady growth in a more prominent position, strengthen the implementation of prudent monetary policy, and give better play to the dual functions of the aggregate and structure of monetary policy tools.
Under the guidance of the “steady growth” policy, local governments intensively promote investment projects, and the construction industry is expected to usher in a new round of growth. Overall, the planned investment in major provinces and cities this year exceeded 12 trillion yuan, and the planned investment in Anhui, Henan, Zhejiang and Jiangxi provinces exceeded trillion yuan, of which Anhui’s planned investment exceeded 1.65 trillion yuan, ranking first.
From the perspective of the investment plans of various provinces, the annual investment plans of most provinces showed a high growth compared with the previous year, and the annual investment plans of Shanghai, Wuhan, Guangdong, Zhejiang and Anhui increased by 12% ~ 19%. The investment in major infrastructure projects accounts for an average of more than one third of the annual investment, of which Zhejiang, Guangdong, Anhui, Shandong and Jiangsu account for 39% ~ 66%.
related listed companies
accelerated order growth
The new orders signed by Construction Listed Companies in the first quarter have reflected the growth trend of the infrastructure industry to a certain extent. According to the statistics of data treasure, the newly signed orders of the eight central construction enterprises in the first quarter of this year increased by 27.55% year-on-year.
In terms of listed companies, the growth rate of new orders signed by China National Chemical Engineering Co.Ltd(601117) and China Railway Group Limited(601390) companies in the first quarter exceeded 80%. The median growth rate of new orders signed by listed companies related to the construction industry in the first quarter exceeded 30%, and new orders signed in the first quarter such as East China Engineering Science And Technology Co.Ltd(002140) , Longjian Road&Bridge Co.Ltd(600853) , Xinjiang Beixin Road & Bridge Group Co.Ltd(002307) and Xinjiang Beixin Road & Bridge Group Co.Ltd(002307) increased by more than three times year-on-year.
According to China International Capital Corporation Limited(601995) tracking statistics, infrastructure orders in the first quarter of this year increased by 40.2% year-on-year and 30.2% quarter on quarter, and the growth rate continued to accelerate (infrastructure orders in the third and fourth quarters of last year increased by 5.6% and 9.9% year-on-year respectively). Looking back, with the gradual reduction of the impact of the epidemic and the gradual implementation of comprehensive strengthening of infrastructure construction, the growth of infrastructure orders in the second and third quarters of this year is expected to further accelerate.
Anhui Construction Engineering Group Corporation Limited(600502) relevant persons pointed out that the new orders signed by the company increased significantly in the first quarter of this year, mainly due to the signing of two high-speed BOT (construction operation transfer) projects. According to the data, Anhui Construction Engineering Group Corporation Limited(600502) in the first quarter, the newly signed orders increased by more than 85% year-on-year. For the continuity of follow-up orders, relevant people said that the growth rate of new orders signed by the company this year is expected to exceed that of last year.
construction industry is expected to reverse
The growth capacity of the construction industry has declined for three consecutive years. With the gradual implementation of the steady growth policy this year, the newly signed orders of listed companies are growing rapidly, and the prosperity of the industry is expected to reverse in the future.
According to the consensus expectation of the organization, the net profit growth rate of the construction industry this year and next year is 25.44% and 22.21% respectively, and the growth capacity has an obvious reversal trend. Looking forward to the future, under the action of various stimulus policies, the growth of construction enterprises is expected to be further guaranteed.
The market has begun to deliver on this expectation. As of the latest closing, the housing construction sector has risen nearly 3% against the market since April, with infrastructure, engineering consulting services and other sectors leading the gains. A number of individual stocks rose sharply, and the share prices of Zhejiang Construction Investment Group Co.Ltd(002761) , Huitong group, Tianjin Tianbao Infrastructure Co.Ltd(000965) , Hunan Development Group Co.Ltd(000722) and other stocks doubled during the year.
Can the good momentum of the construction industry continue? Looking back over the past decade, China has roughly experienced five rounds of steady growth in 2009, 20122013, 20152016, 2019 and 2020, effectively ensuring stable economic development. Among them, two large-scale steady growth policies correspond to two stock market bull markets: 2009 and 20152016.
The market generally believes that there is great downward pressure on the current economy, and the strength of steady growth must be greater than that from 2012 to 2013 and 2019, so as to stabilize the economic growth in a reasonable range. From this point of view, the stable growth market is more likely to continue.
these companies are profitable
flexible and low valuation
Compared with the performance of the construction industry index, its future growth may still not be reflected, especially the performance of the current leader in the construction industry, large market value construction central enterprises and state-owned enterprises is relatively mild, and their ability to get orders is stronger under the background of steady growth, and their profitability and growth ability will be further guaranteed in the future. Data treasure combs individual stocks in the construction industry from the perspective of order guarantee coefficient and future growth.
According to the statistics of data treasure, according to the annual report data of listed companies, the order guarantee coefficient of central enterprises (the ratio of new orders signed last year to last year’s revenue) of China Railway Construction Corporation Limited(601186) , China Energy Engineering Corporation Limited(601868) , China Railway Group Limited(601390) and other companies, such as East China Engineering Science And Technology Co.Ltd(002140) , Shaanxi Construction Engineering Group Corporation Limited(600248) , China National Chemical Engineering Co.Ltd(601117) , exceeded 2 times, and the order guarantee coefficient of Shaanxi Construction Engineering Group Corporation Limited(600248) , Shaanxi Construction Engineering Group Corporation Limited(600248) , China National Chemical Engineering Co.Ltd(601117) and other companies exceeded 1.9 times.
In terms of growth, among the companies with more than three institutions predicting net profit in the past month, China National Chemical Engineering Co.Ltd(601117) , Anhui Honglu Steel Construction(Group) Co.Ltd(002541) , Suwen Electric Energy Technology Co.Ltd(300982) , Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) and other companies, the growth rate of net profit this year and next year exceeded 20%. In terms of local state-owned enterprises, the net profit growth rate of Shandong Hi-Speed Road&Bridge Co.Ltd(000498) this year and next is more than 27%, and the net profit growth rate of Sichuan Road & Bridge Co.Ltd(600039) , Anhui Construction Engineering Group Corporation Limited(600502) , etc. this year and next is more than 19%.
Overall, among the stocks with single digit P / E ratio predicted this year, Shandong Hi-Speed Road&Bridge Co.Ltd(000498) and China National Chemical Engineering Co.Ltd(601117) institutions unanimously predicted that the growth rate of net profit this year and next will exceed 24%, and Sichuan Road & Bridge Co.Ltd(600039) , Dongzhu Ecological Environment Protection Co.Ltd(603359) , China Design Group Co.Ltd(603018) , Anhui Construction Engineering Group Corporation Limited(600502) and other stock institutions unanimously predicted that the growth rate of net profit this year and next will exceed 15%.
