Key investment points:
Event: on May 16, 2022, the National Bureau of statistics released the macro data of fixed asset investment from January to April 2022. The national fixed asset investment (excluding farmers) was 15.35 trillion yuan, an increase of 6.8% year-on-year, down 2.5 PCT from January to March; In April, the investment in fixed assets (excluding farmers) was about 4.86 trillion yuan, down 0.82% month on month (quarterly). From January to April, the investment in railway transportation industry decreased by 7.0% year-on-year, expanding by 4.1 PCT compared with the decline from January to March; Investment in road transport industry increased by 0.4% year-on-year, and the growth rate dropped by 3.2 PCT.
From January to April 2022, the national investment in real estate development was 3.92 trillion yuan, a year-on-year decrease of 2.7%, from positive to negative, a decrease of 3.4 PCT; Among them, the completed amount of residential investment was about 2.95 trillion yuan, a year-on-year decrease of 2.1%. From January to April, the sales area of commercial housing totaled about 398 million square meters, a year-on-year decrease of 20.9%, an increase of 7.1 PCT compared with that from January to March. The new construction area of houses totaled 398 million square meters, a year-on-year decrease of 26.3%, an increase of 8.8 percentage points compared with that from January to March. Housing construction area totaled 8.186 billion square meters, flat year-on-year, down 1 percentage point from January to March. The completed housing area totaled about 200 million square meters, a year-on-year decrease of 11.90%, an increase of 0.4 percentage points from January to March. From January to April, the land acquisition area of real estate development enterprises totaled 17 million square meters, a year-on-year decrease of 46.50%, an increase of 4.7 PCT compared with the decrease from January to March.
From January to April 2022, the cumulative cement output in China was 581 million tons, a year-on-year decrease of 14.8%, an increase of 2.7 percentage points compared with the decline from January to March. Among them, the monthly cement output in April was 195 million tons, a year-on-year decrease of 18.9%. From January to April, the output of flat glass was 339 million heavy boxes, a year-on-year increase of 0.7%, a decrease of 1.3 percentage points compared with the increase from January to March. In April, the output of flat glass was 85.64 million heavy boxes, a year-on-year decrease of 1.4%.
Under the pressure of the epidemic, the policy catalytic margin is upward. In April, the epidemic spread in East China and some northern cities dominated by Shanghai, resulting in the suspension of real estate construction projects and the suppression of housing consumption demand. From January to April, the year-on-year growth rate of real estate development investment turned negative, the year-on-year decline of new construction area and sales area increased to more than – 20%, and the year-on-year decline of land purchase area and transaction price expanded to 4-5pct. On May 18, the Bureau of statistics released the selling prices of commercial houses in 70 large and medium-sized cities in April. According to the calculation of E-House Research Institute, the average price index of new commercial houses in 70 large and medium-sized cities fell by 0.3% month on month and 0.1% year-on-year in April; The average price index of second-hand houses decreased by 0.3% month on month and 1.6% year-on-year. The number of new houses and second-hand houses rising month on month in 70 cities was also lower than that in March. Since April, the central and local governments have continuously issued marginal real estate relaxation policies. According to Kerui statistics, a total of 66 cities have issued real estate relaxation policies in April, including popular new first tier / strong second tier cities Hangzhou, Suzhou, Hefei, Nanjing, etc., and the policy intensity has been further increased to lift / adjust the purchase restriction policy. In May, the central bank and the China Banking and Insurance Regulatory Commission announced that the lower limit of the interest rate of the first commercial individual housing loan should be adjusted to not less than the market quotation rate of the corresponding term loan by 20 basis points. According to the current LPR quotation of more than five years, the lower limit of the mortgage interest rate of the first housing will be adjusted to 4.4%. Under the basic tone of adhering to the principle of no speculation in housing, we will support all localities to improve real estate policies from local realities and support rigid and improved housing demand. We believe that with the introduction of the central and local substantive relaxation policies and the easing of the epidemic in various places, the inflection point of real estate is gradually approaching, and the real estate β It is expected to rise and drive the repair market of the real estate chain.
Infrastructure investment played a driving role, and the issuance of special bonds in May / June may exceed trillion. From January to April, fixed asset investment (excluding farmers) increased by 6.8% year-on-year. The proportion of real estate investment in fixed asset investment in the first April continued to decline, from about 28.56% from January to February to 18.08% in a single month in April. Infrastructure investment played an important role in driving. According to the data of the government debt research and evaluation center of the Ministry of finance, 67.3% of the new local debt from January to February 2022 was invested in infrastructure, an increase of 0.8 PCT over 21q4, and the funds were further inclined to infrastructure projects. In order to ensure the smooth development of key projects and form the physical workload as soon as possible, the Ministry of Finance clearly required local governments to speed up the issuance of new special bonds. Most of the 22-year new special bonds should be issued by the end of the second quarter and the remaining amount of the whole year should be issued by the end of the third quarter. By the end of April, the issuance scale of new special bonds was about 1.4 trillion yuan. On a monthly basis, 484375393143420543/103829 billion yuan of new special bonds were issued in January, February, March and April respectively. According to the amount of special bonds newly added at the beginning of the year, if most of the amount is issued by the end of June, the amount of special bonds issued in May / June will be nearly trillion. In early May, the general office of the CPC Central Committee and the general office of the State Council jointly issued the “opinions on promoting the urbanization construction with the county as an important carrier”. As one of the three key projects this year, the scope of urban renewal projects will be further extended to the urbanization construction of the county. At this stage, the per capita investment in fixed assets of municipal utilities in the county is only about 1 / 2 of that in cities at and above the prefecture level, and the per capita consumption expenditure is only about 2 / 3 of that in cities at and above the prefecture level. The population of the county and county-level cities accounts for about 30% of the urban permanent population. Improving the urbanization construction is conducive to further stimulating investment and per capita consumption. We believe that under the background of multiple outbreaks in the second quarter, the increasing downward pressure on the economy and the counter cyclical regulation of infrastructure will also become an important part of the underlying economy, and the undervalued sectors related to construction are expected to continue to be repaired.
Cement: the epidemic has led to a sluggish peak season, and all localities have launched staggered peak production for self-help. Due to the recent repeated epidemic in many places, the construction of “foundation” projects in various places is limited, and the demand recovery is less than expected. The cement output in a single month in April decreased significantly. According to the digital cement network, the average shipment rate of enterprises has decreased by about 20% year-on-year, and even 30% in areas with serious epidemic. We believe that the epidemic situation is the biggest variable affecting the demand for cement at present. Affected by the high inventory, in order to maintain the balance between supply and demand, maintain price stability, increase and stagger peak production in many places in the second quarter and reduce the pressure on the supply side, the regulatory authorities recently notified the local authorities to further speed up the issuance of special bonds, basically complete the issuance of new special bonds in 2022 by the end of June, and accelerate the implementation of key projects such as water conservancy, railway and highway, At the same time, due to urban policies, real estate has been substantially relaxed in many places, and real estate demand is expected to hit the bottom and rebound; However, it is expected that a new round of concentrated demand for cement and infrastructure will not be released, which is expected to delay the release of the most important economic dividend chain, but the price of cement and infrastructure will not be underestimated. It is suggested to pay attention to the faucet Anhui Conch Cement Company Limited(600585) , Huaxin Cement Co.Ltd(600801) and the elastic subject Gansu Shangfeng Cement Co.Ltd(000672) .
Glass: demand recovers slowly and inventory pressure appears. At present, the epidemic situation is repeated in many places, the logistics control is becoming stricter, and the demand recovery is less than expected. Since March, the inventory of enterprises has continued to rise, and the price is weak. We believe that the current high prices of soda ash and fuel have further raised the production costs of enterprises. Under the support of costs, the downward space of prices is limited; The epidemic affects demand recovery and logistics transportation. On the policy side, local governments continue to relax their real estate policies. The effect of real estate policies due to urban implementation may gradually appear with the improvement of the epidemic. The orders postponed since the second half of last year may be released in a centralized manner. It is optimistic that the volume and price of glass will rise in a new round after the improvement of the epidemic; From a macro perspective, the demand for real estate completion remains resilient, with a real estate sales area of more than 1.7 billion square meters in 18-21 years. With the arrival of the housing delivery cycle and the background of guaranteed housing delivery, new construction accelerates the transmission of support demand to completion; At the same time, the industrial chain extension of leading enterprises is gradually emerging, the proportion of growth businesses is gradually increasing, and the periodic fluctuation is gradually smoothed (it is recommended to pay attention to Zhuzhou Kibing Group Co.Ltd(601636) , Csg Holding Co.Ltd(000012) , Xinyi Glass).
Investment suggestion: we believe that further lowering the interest rate of individual housing loans will help stimulate the current commercial housing trading market. The market that remains depressed is expected to gradually recover, and the turning point of real estate is gradually approaching. At the same time, the demand suppressed by the epidemic is expected to be released in a centralized manner with the improvement of the epidemic. We are optimistic about the gradual improvement of the data of real estate chain enterprises in the middle and late May. We suggest paying attention to the opportunity of rebound in the real estate chain, and Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Keshun Waterproof Technologies Co.Ltd(300737) Jade Bird Fire Co.Ltd(002960) etc.
Risk warning: the investment in fixed assets is lower than expected; The aggravation of trade conflict leads to the obstruction of sales volume of export enterprises; The margin of environmental protection supervision is relaxed, and the supply contraction is lower than expected; The sharp rise in the price of raw materials has brought cost pressure.
