Key investment points
Key events of this week: 1) the 5-year LPR fell again and the real estate stimulus increased. On May 20, the quotation of one-year LPR interest rate remained unchanged at 3.70%, and the five-year LPR interest rate was reduced by 15bp to 4.45%. This reduction is greater than 5 BP on January 20. After the reduction, the minimum loan interest rate of the first ordinary commercial housing can be reduced to 4.25%. After the central bank lowered the lower limit of the interest rate of the first ordinary self housing loan to lpr-20bp on May 15, the sharp reduction of the five-year LPR again reflects the further increase of policy stimulus. 2) The short-term impact of the epidemic on real estate demand was obvious in April. According to the data of the National Bureau of statistics, from January to April, the investment in fixed assets (excluding farmers) / infrastructure investment (excluding electricity) was yoy + 6.8% / + 6.5% (the previous value was + 9.3% / + 8.5%). The overall growth rate at the investment side weakened, the investment in water conservancy management industry increased rapidly year-on-year, and the growth of transportation investment was limited. The demand for real estate continued to be weak, and the decline at the start and construction ends continued to expand (yoy-44.2% / – 38.7% in April alone), and the land market further fell. Investment and real estate data weakened, and the logic of steady growth was further strengthened. 3) Shandong Cement Association issued a document to suspend peak shifting in summer, and Zhejiang plans to increase the price of electricity in cement and other industries. Shandong Cement Association informed that in order to actively grasp the production and operation in the first half of the year, the implementation of peak shifting production in summer was suspended. Zhejiang development and Reform Commission plans to increase the electricity price of cement, glass and other high energy consuming enterprises by 0.172 yuan / kWh, and the implementation period is from July 1 to December 31, 22 years.
This week’s view: since April, the economic growth has been under pressure due to the downturn of real estate and repeated epidemics, the social finance data is lower than expected, the infrastructure underpinning economy still needs to be strengthened, and the joint improvement expectations of both sides of real estate supply and demand are strengthened. The five-year LPR reduction is a further overweight of the real estate easing policy. We expect that the inflection point of new housing sales will gradually approach and the bottom of the real estate chain fundamentals will be further consolidated. At the current time, we suggest paying attention to several main lines of investment in building materials & new materials. First, the prosperity and performance fulfillment are selected from carbon fiber, quartz sand and glass fiber industries; Second, the marginal improvement of real estate policy, focusing on the layout of brand building materials; Third, cement and water reducing agent are selected for the main line of steady growth; Fourth, at the bottom of the photovoltaic glass industry cycle, with the support of cost, the industry basically has no downside risk; Float glass prices stabilized and rebounded while demand boosted. 1) In the field of new materials, the “limited overseas supply”, the explosion of demand in new energy fields such as wind, light and hydrogen downstream of carbon fiber, and China’s leading “grinding a sword in ten years”; Domestic leaders have finished catching up. In the future, capacity expansion and cost reduction will lead to surpassing in the civil field; In addition, we believe that the business continuity in the field of small and medium-sized tow is high, and the supply and demand pattern of precursor will be better than that of carbon fiber. High purity quartz sand / electronic cover glass ushered in the industrial opportunity of high demand increase + domestic alternative resonance, and UTG welcomed the outbreak of demand. 2) The glass fiber cycle is weakened, the roving boom is expected to continue (wind power, automobile, export, etc. bring strong support to the demand), the bottom of the price of electronic cloth has appeared, which is expected to continue to pick up, and the current safety margin is high. 3) The layout of brand building materials is at the right time. Since the second half of the year, the valuation and performance of brand building materials have been killed under weak demand + capital pressure + high cost. In the absence of significant improvement in real estate fundamentals, the policy continued to relax expectations, the credit risk faced by the real estate chain and the pessimistic expectation of market demand were repaired, and the sector rebounded as a whole. According to the historical resumption, the end of the general real estate policy corresponds to the end of the valuation of brand building materials. The end of this round of policy / valuation appears in 21q4. We expect the end of fundamentals to appear in 22h1. 4) The cost performance of cement allocation is high. The infrastructure development force and the marginal recovery of real estate under steady growth are expected to support the cement demand to maintain a high platform. However, the further coordination and optimization of cement core logic at the supply side in 22 years has generally strengthened the scope and intensity of peak staggering this year than last year, superimposing the high price center to maintain profitability and toughness. 5) From the perspective of water reducing agent, capital construction pull + gross profit margin rise + functional materials open up growth space. 6) The bottom price of photovoltaic glass is still upward flexible. The price continues to rise this week. We are optimistic about the adverse expansion and cost competitiveness of leading enterprises, and focus on the profit elasticity and long-term growth brought by the expansion of traditional glass into the field of photovoltaic glass; The price of float glass has been adjusted at a low level, and the price is expected to stabilize and recover with the gradual recovery of demand.
New materials: 1) carbon fiber boom continues: at the end of this week, the average price of carbon fiber market was 186000 yuan / ton (flat month on month, year-on-year + 3.0), the average price of large tow was 145000 yuan / ton (flat month on month, year-on-year + 1.3), and the average price of small tow was 225000 yuan / ton (flat month on month, year-on-year + 4.5); At the weekend, the inventory of carbon fiber factory was 11 tons (flat month on month, year-on-year – 3). The price of raw material acrylonitrile decreased month on month, and the price of precursor ran smoothly. We believe that the investment logic of the civil carbon fiber industry lies not only in the high demand growth (wind, light, hydrogen, etc.), but also in the “favorable climate, favorable location and harmonious people”. After seizing the opportunity to catch up, we will further expand the scale and cost advantage and realize the historical opportunity of “domestic substitution” and transcendence. Under the barriers of high technology, technology and capital, those who win the “raw silk” win the world. In the medium and long term, with reference to glass fiber, the industry penetration can be improved or rely on “price” for “demand”. We suggest paying attention to Zhongfu Shenying (the company is a high-quality leader in the carbon fiber industry, with obvious advantages in technology, scale and cost, products, talents and shareholders. It is expected that with the landing of the company’s IPO and the full commissioning of the 10000 ton line of Xining base, the company’s sales growth and cost decline will enter the fast lane, which will continue to promote the domestic substitution of carbon fiber). At the same time, we suggest paying attention to Jilin Carbon Valley, Jilin Chemical Fibre Co.Ltd(000420) , Weihai Guangwei Composites Co.Ltd(300699) Sinofibers Technology Co.Ltd(300777) , Hengshen shares; Carbon fiber equipment manufacturer Zhejiang Jinggong Science & Technology Co.Ltd(002006) ; Downstream composite manufacturers Sinoma Science & Technology Co.Ltd(002080) , Kbc Corporation Ltd(688598) , Beijing Tianyishangjia New Material Corp.Ltd(688033) , Hongfa new materials, etc. 2) For the quartz glass industry, benefiting from the growth of photovoltaic installed capacity / the transformation of photovoltaic cells from p-type to n-type, the demand for high-purity quartz sand is growing rapidly, and the supply pattern of “two overseas + one large in China” has led to new controllable growth in the industry, and the supply and demand is expected to maintain a tight balance; The demand for semiconductor and military quartz materials is booming, and the barriers to qualification certification are high. Leading enterprises are expected to continue to increase the market share. Jiangsu Pacific Quartz Co.Ltd(603688) and Hubei Feilihua Quartz Glass Co.Ltd(300395) . 3) Electronic cover glass: Chinese enterprises have achieved a technological breakthrough and passed the downstream certification. Under the condition of improving the penetration rate of domestic mobile phones and ensuring the safety of the supply chain, domestic substitution is accelerated. It is recommended to pay attention to CSG a, which has achieved the iterative breakthrough of electronic cover technology and completed the verification of downstream mobile phone manufacturers. 4) UTG: the penetration acceleration of folding screen mobile phones + alternative CPI trend is obvious, and the demand welcomes the outbreak; Take the lead in realizing technological breakthrough and benefiting mass production enterprises. It is suggested to pay attention to Triumph Science & Technology Co.Ltd(600552) .
Glass fiber: the industry cycle is weakened, the roving boom is expected to continue, and the bottom of electronic yarn price has been realized. This week, the average price of 2400tex winding direct yarn is 5917 yuan / ton (Mom – 67, yoy – 267); The average price of electronic yarn G75 is 9000 yuan / ton (flat month on month, year-on-year – 7750); The mainstream price of electronic cloth is 3.6-3.8 yuan / meter (flat month on month).
We expect that the industry’s new roving / electronic yarn production capacity will be about 545 / 101000 tons respectively in 22 years, and the production line will be put into operation more dispersed. We expect that the marginal new production capacity of 22q1-22q4 will be 1.7/3.8/4.413000 tons / quarter respectively, with a relatively mild impact. We expect that the global roving supply and demand will be in tight balance in 22 years, and the price boom is expected to continue under the low inventory level. The energy cost of glass fiber accounts for about 20%, and the energy consumption is still high. Under the dual control of energy consumption, it is more difficult to increase the new capacity of the industry, and the uncertainty of landing rhythm increases. We believe that the new production capacity will still be dominated by leading enterprises, and the industry pattern is expected to continue to be optimized. The leading enterprises have core competitiveness such as cost and technology, and the continuous upgrading of product structure will hedge the periodicity to a certain extent. The competitiveness of the leading enterprises in the glass fiber industry is significantly enhanced both from the perspective of increasing market share and continuous decline of cost. We expect that the profitability of the bottom leading enterprises in the next round is expected to increase significantly compared with history. We continue to focus on recommending glass fiber leading enterprises China Jushi Co.Ltd(600176) , Sinoma Science & Technology Co.Ltd(002080) , Jiangsu Changhai Composite Materials Co.Ltd(300196) , Shandong Fiberglass Group Co.Ltd(605006) .
Brand building materials: under the pressure of the industry, the most difficult time for brand building materials has passed, and the leader welcomes light loading + counter trend expansion. 1) Since 21q4, “bottom of real estate policy + broad real estate market (affordable housing)” + landing of credit risk + stabilization and decline of raw material prices, and the expected bottom of brand building materials has been established. 2) From the 14-year and 18-year recovery, the expected bottom of the real estate corresponds to the bottom of the valuation of brand building materials. 3) Leading enterprises have strengthened their competitiveness and highlighted their growth (category expansion and application expansion) during the pressure period of the industry. The credit impairment of major enterprises has been implemented in 21 years, and the performance and valuation are expected to be restored in 22 years. Brand building materials, brand building materials, brand building materials, brand building materials. Leading enterprises have advantages in terms of brand / Channel / cost / capital, etc. both in terms of competitiveness and growth, they have the ability to cross cycles, and in terms of competitiveness and growth, they have the ability to go through cycles, and in the process of building the bottom, they are the first to break through the encirclement, seize the leading position, take the lead in the process of building the bottom, take the lead in the process of building the bottom, and actively lay out the leading. We recommend Beijing New Building Materials Public Limited Company(000786) \ , Guangdong Dongpeng Holdings Co.Ltd(003012) Wangli Security & Surveillance Product Co.Ltd(605268) , Asia Cuanon Technology (Shanghai) Co.Ltd(603378) , it is suggested to pay attention to China Liansu, Jiangsu Canlon Building Materials Co.Ltd(300715) , D&O Home Collection Co.Ltd(002798) .
Under the expected warming of steady growth, the cost performance of cement sector allocation is prominent. We believe that although there is a small single digit decline in demand in 22 years, it is expected to remain at a high platform period of more than 2 billion tons. Under the contraction of demand, the willingness of enterprise supply coordination is expected to increase. The cross shareholding of leading enterprises is expected to jointly lead the optimization of the industry, and the coal price is still rising, which is expected to promote the price to remain high. In the medium and long term, the dual carbon policy and dual control of energy consumption promote the optimization of the industry pattern. The industry has entered the integration period, and competition and cooperation gradually replace competition. Leading enterprises actively distribute aggregate, commercial concrete and other markets to contribute to growth, and the cost performance is prominent at low valuations. This week, the national cement market price continued to decline month on month, with a decrease of 1.7%. In mid May, with the decrease of heavy rainfall, the demand of China’s cement market improved slightly, and the shipment rate of enterprises increased by 5% month on month. As the overall shipment level remained at the level of 60-70%, the inventory continued to operate at a high level, and the cement price continued to decline. This week, the national cement storage capacity ratio was 69.7%, with a month on month ratio of + 0.3pct and a year-on-year ratio of + 16.3pct; The shipment rate was 64.1%, with a month on month increase of + 4.5pct and a year-on-year increase of -13.9pct. It is recommended to focus on Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) , Gansu Shangfeng Cement Co.Ltd(000672) , Guangdong Tapai Group Co.Ltd(002233) , and it is recommended to focus on Chinese building materials, Xinjiang Tianshan Cement Co.Ltd(000877) , Jiangxi Wannianqing Cement Co.Ltd(000789) .
Continue to focus on recommending the leader of China’s concrete water reducing agent industry Sobute New Materials Co.Ltd(603916) Sobute New Materials Co.Ltd(603916) recommendation logic: the company’s production capacity planning is clear, and it is expected to continue to grow in the next three years, with a rising market share; The price of raw material ethylene oxide is running at a low level, the price increase of the company has been gradually implemented, and the gross profit margin may increase significantly in 22 years; The company’s functional materials (such as anti crack and anti-seepage agent, wind power grouting material, etc.) maintain a high growth, and is expected to grow into an admixture platform enterprise.
The price of photovoltaic glass is stable; Building glass prices are still under pressure in the short term. In terms of photovoltaic glass, the mainstream quotation of 3.2mm coating at the end of this week was 28.5 yuan / square (flat month on month); Inventory days are about 15.0 days (mom + 5%); The production capacity is 56000 T / D (unchanged month on month). For photovoltaic glass, the new supply under the dual control of energy consumption may be less than expected, and the price at the bottom of the industrial cycle may be upward elastic. Optimistic about the revenue proportion of traditional glass enterprises in the field of photovoltaic glass and improve their cost competitiveness. The average price of float glass this week was 1989 yuan / ton (mom-50); Weekend inventory of 64.52 million heavy containers (mom + 121); The production capacity of glass in production is 174000 T / D (unchanged month on month). This week, the weakness of China’s float glass market was sorted out, and the transaction focus in some regions moved downward. Cause analysis: first, the contradiction between supply and demand is severe, the float factory inventory continues to accumulate, and the downstream demand continues to perform generally; 2、 In the first ten days of the year, under the impact of the reduction of glass prices in North China, East China, central China and other places gradually followed the decline; 3、 Some float enterprises are gradually entering a loss. In addition, it is difficult to be optimistic about the future, and their tolerance to high inventory has decreased slightly. In the future, the short-term contradiction between supply and demand will continue, and the glass price is weak. We believe that under the “guaranteed delivery” of real estate, the toughness of glass demand is expected to be maintained. On the supply side, considering the high capacity utilization rate of the industry, the subsequent new capacity is limited; In addition, at present, in the production line, the proportion of kiln age production capacity of 8-10 years / 10-12 years / more than 12 years is 13.2% / 8.3% / 5.9% respectively. Cold repair of the old production line may lead to supply contraction. We expect the glass price to remain at a good level throughout the year. Continue to focus on recommending Zhuzhou Kibing Group Co.Ltd(601636) , and suggest paying attention to Xinyi Glass, CSG a, Shandong Jinjing Science And Technology Stock Co.Ltd(600586) , Luoyang Glass Company Limited(600876) , etc; At the same time, we continue to recommend photovoltaic glass leading Xinyi solar energy and Flat Glass Group Co.Ltd(601865) .
Risk warning: macroeconomic downside risk; Demand is lower than expected; Excessive new capacity; Poor capital turnover.
