Market Review
In the past five trading days (05160520), CSI 300 rose by 2.23% and building materials (CITIC) rose by 2.95%. The market continued to rebound, and the varieties of real estate chain in the sub sectors ranked first. We judge that it is related to the recent continuous release of real estate relaxation policies, and with the gradual stabilization of the epidemic, the fundamentals of building materials in the real estate chain are expected to gradually improve. Among individual stocks, Zyf Lopsking Aluminum Co.Ltd(002333) , Gansu Qilianshan Cement Group Co.Ltd(600720) , Sinostone(Guangdong) Co.Ltd(001212) , Zhuzhou Kibing Group Co.Ltd(601636) , Jinyuan Ep Co.Ltd(000546) led the increase.
Interest rate cuts may benefit the market of consumer building materials, and the fundamentals of building materials in the real estate chain are expected to gradually improve
On May 20, the central bank announced the latest LPR, five-year lpr4 45%, down 15bp month on month, and this five-year LPR hit the highest month on month decline. In the weekly report on April 17, we took MLF and reverse repo interest rate as the research object and pointed out that within 30 trading days after previous interest rate cuts, SW construction and building materials index has a high probability of obtaining excess returns relative to CSI 300. Since the publication of the five-year LPR in 2019, it has experienced a total of four declines. Among the two recent interest rate cuts in March 2020 and December 2021, the building materials sector has significantly outperformed Shanghai and Shenzhen 300. The expected rise of steady growth combined with the decline of the five-year LPR is expected to form an upward driving force for the sector market. From the performance of the sub sector, the performance of the building materials sub sector has a good regularity, and the performance of consumption of building materials and other structural materials biased towards infrastructure is higher.
From January to April, the investment in real estate / broad infrastructure / manufacturing industry was – 2.7% / 8.6% / 12.2% year-on-year, and the growth rate was lower than that from January to March. In terms of real estate volume indicators, the sales / land purchase / newly started / completed area from January to April was – 21.0% / – 46.5% / – 26.3% / – 11.9% year-on-year, with an increase in the decline compared with the previous three months. However, in the first 20 and 30 days of May, the sales area of large and medium-sized cities decreased by 50.85% year-on-year, which was much narrower than the decline in the previous 10 days (55.16%). We believe that the downward demand in April is superimposed with the disturbance of the epidemic, and the fundamentals of consumer building materials and other real estate chain varieties may still be under great pressure. However, the replenishment of the demand side after the epidemic and the promotion of the current real estate policies to the market may jointly make April the bottom inflection point of the fundamentals of real estate chain varieties, and the subsequent industry fundamentals may be gradually improved.
Continue to be optimistic about stable growth and fundamental reversal, and recommend the consumption of building materials / pipelines / cement, etc
1) influenced by the prosperity of real estate, capital chain and cost pressure last year, the above factors are expected to gradually improve. In the medium and long term, the leading companies have started channel reform, and the scale effect is expected to continuously improve the industry concentration, both long and short; 2) The downstream of the plastic pipeline sector has both infrastructure and real estate. The infrastructure end is expected to benefit from the warming of municipal pipe network investment, and the logic of the real estate end is similar to that of consumer building materials; 3) Cement is expected to benefit from the improvement of follow-up infrastructure and real estate demand. In the medium and long term, the supply pattern is expected to be continuously optimized; 4) At present, the market value of the leading glass enterprises is at a low level. At present, they are in the period of accelerated resumption of work in spring, and the glass price is expected to gradually rise. This year, the overall supply and demand of the industry may still be in a tight balance, the unit profit of float glass is expected to be relatively stable, photovoltaic glass is expected to benefit from the recovery of the industrial chain, and electronic glass is expected to benefit from the large volume of new products such as domestic substitutes and folding screens; 5) The demand side of glass fiber is driven by the downstream of wind power and overseas, and the increment on the supply side is limited.
Key recommended combinations this week
\u3000\u3 Shengda Resources Co.Ltd(000603) 737 Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) Keshun Waterproof Technologies Co.Ltd(300737) Dehua Tb New Decoration Material Co.Ltd(002043) Zhuzhou Kibing Group Co.Ltd(601636) Monalisa Group Co.Ltd(002918)
Risk tip: the demand for infrastructure and real estate fell more than expected, affecting the rising trend of cement and glass prices; The promotion of old reform and new urbanization was less than expected.
