The reduction of the 5-year LPR interest rate is conducive to the accelerated implementation of infrastructure projects, while reducing the financing cost of construction enterprises, which is expected to thicken the company's performance. The central bank announced that the five-year LPR would be lowered by 15bp, and the monetary policy would strengthen countercyclical regulation, releasing a clear signal of steady growth, which would help stimulate the financing demand of market subjects and boost market confidence. For the construction sector, on the one hand, the debt ratio of construction enterprises is high. According to the statistics of the annual report of listed construction companies in 2021, the asset liability ratio is as high as 74%, the construction project cycle is relatively long, and enterprises have more long-term liabilities. The reduction of the five-year LPR interest rate is conducive to the construction enterprises to reduce interest expenses, thus thickening the company's performance. On the other hand, the steady growth policy continues to be implemented. As an important tool for counter cyclical economic regulation, infrastructure needs active and favorable financial policy support. Since 2022, the issuance of special bonds has been significantly ahead of schedule, and the growth rate of infrastructure investment in the first quarter has been obvious. The reduction of LPR interest rate is a favorable supplement to the accelerated issuance of special bonds, which can reduce the financing cost of downstream owners of infrastructure, stimulate the demand for infrastructure projects, and orders are expected to accelerate.
BIPV is one of the few investment directions in line with "steady growth" and "double carbon". The continuous implementation of local government BIPV policies will catalyze the rapid development of BIPV. This week, Shanghai, Jiangxi, Zhejiang and Hubei respectively released the energy plan for the 14th Five Year Plan period. By 2025, the cumulative installed capacity of new photovoltaic is expected to reach 2.7gw, 16GW, 12.45gw and 15gw respectively, and the integrated application of photovoltaic buildings is emphasized.
At present, China State Construction Engineering Corporation Limited(601668) photovoltaic integration (BIPV) is still in the early stage of development. Compared with the development of prefabricated buildings in China from 2017 to 2019, the current development stage of BIPV still needs to be pushed by policies. We believe that the policies at the local government level are intensively implemented and make clear requirements for the installed capacity during the 14th Five Year Plan period, which is expected to accelerate the development of BIPV industry and realize the rapid volume of orders.
Compared with the infrastructure market in 2018, this round of infrastructure market is expected to show "the same steady growth, different market context". The reason for the end of the market in 2018 is that the fundamentals have not been fulfilled. The orders and infrastructure investment of Listed Companies in the first quarter of 2019 are lower than expected, and the performance of market leader China Railway Construction Corporation Limited(601186) q1 in 2019 is lower than expected. The context of this round of market is slightly different, and the policy of infrastructure support continues to increase; From the perspective of enterprise orders, Q1 orders of some construction enterprises increased explosively; The market leader China Railway Group Limited(601390) performance of this round is highly deterministic. We judge that this round of infrastructure market will last longer.
It is suggested to continue to pay attention to the infrastructure market and the opportunities of "double carbon" main line, and pay attention to the opportunities of construction leasing market. 1) Pay attention to the capital construction market. In terms of traditional infrastructure targets, [ China Railway Group Limited(601390) ], [ China Railway Construction Corporation Limited(601186) ], [ China Communications Construction Company Limited(601800) ], [ China State Construction Engineering Corporation Limited(601668) ], [ China National Chemical Engineering Co.Ltd(601117) ], are recommended along the direction of traditional infrastructure central enterprises with multi theme catalysis; Along the direction of local state-owned enterprises and private enterprises with performance flexibility, [ Anhui Honglu Steel Construction(Group) Co.Ltd(002541) ], [ Anhui Construction Engineering Group Corporation Limited(600502) ], [ Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) ], [ Guangdong No.2 Hydropower Engineering Company Ltd(002060) ], it is recommended to pay attention to [ Zhejiang Communications Technology Co.Ltd(002061) ]. 2) Pay attention to the opportunities of "double carbon" and follow the "introduction of war investment + new business (BIPV)"
Recommended directions: [ Center International Group Co.Ltd(603098) ], [ Hongrun Construction Group Co.Ltd(002062) ], [ Long Yuan Construction Group Co.Ltd(600491) ], [ Zhejiang Southeast Space Frame Co.Ltd(002135) ].
3) pay attention to the construction rental market opportunity, and it is suggested to pay attention to the leader of aerial work vehicle rental [ Zhejiang Huatie Emergency Equipment Science & Technology Co.Ltd(603300) ].
This week (from May 14 to May 20), 79.532 billion yuan of special bonds, 48.728 billion yuan of general bonds and 191.61 billion yuan of refinancing bonds were added.
Risk warning: default risk of local financing platform, unexpected new orders, further tightening of PPP normative policies, tightening of macro liquidity and further tightening of real estate regulation policies.
