This week’s opinion update:
Under the impact of the epidemic, infrastructure investment still showed strong resilience, and the fundamentals of central construction enterprises strengthened: in April 22, the monthly growth rate of infrastructure investment in all fields maintained positive growth, and still showed strong resilience under the impact of the epidemic; At the enterprise level, China State Construction Engineering Corporation Limited(601668) , Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) and other central construction enterprises accelerated the growth of new orders in April 22, and the fundamentals continued to strengthen, or the central construction enterprises took the lead in benefiting from the current round of “steady growth” policy dominated by the central finance. Continue to recommend the main line of “steady growth” and give priority to central construction enterprises. Strong fundamental data have been presented in China State Construction Engineering Corporation Limited(601668) , China Railway Group Limited(601390) , China National Chemical Engineering Co.Ltd(601117) , Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) 22 years.
The reduction of mortgage interest rate is conducive to the stabilization of real estate sales data, and the completion peak may be coming: on May 20, 2022, the central bank announced that the five-year LPR was 4.45%, down 15bps. The reduction of housing loan interest rate is conducive to the release of residents’ reasonable purchase demand and the stabilization of real estate sales data. At the same time, it also further releases the central government’s policy determination to stabilize the real estate industry and stabilize economic growth. In April 22, the real estate completion data recovered, or because the completion peak is coming, it is judged that the completion growth rate in the year may continue to rise. Recommend float glass faucets Zhuzhou Kibing Group Co.Ltd(601636) , Csg Holding Co.Ltd(000012) , and consumer building materials faucets Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Beijing New Building Materials Public Limited Company(000786) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , and it is recommended to pay attention to Guangdong Kinlong Hardware Products Co.Ltd(002791) .
Market performance and high frequency data tracking this week:
Market performance: this week, CITIC Building Materials Index + 1.00%, of which ceramic sector increased the most (+ 3.70%), and other structural materials sector decreased the most (- 3.77%); This week, CITIC construction index was + 0.22%, of which the garden engineering sector increased the most (+ 2.18%) and the building decoration II sector decreased the most (- 0.85%); This week, the average decline of public equity REITs of infrastructure construction was – 1.05% (arithmetic average), of which Beijing Centergate Technologies (Holding) Co.Ltd(000931) increased the most (+ 0.07%), and Soochow Suyuan decreased the most (- 2.50%).
High frequency data of this week: po20.5-po14.5 5. The average price of cement is 500 yuan / ton, with a month on month ratio of -0.58%; The storage capacity ratio is 69.69%, with a month on month ratio of + 0.31pct. Glass: this week’s glass inventory was 73049400 heavy boxes, a month on month increase of + 0.98%. The average price of 3.2mm photovoltaic glass was 28.5 yuan / m2, unchanged month on month; The average price of 2mm photovoltaic glass was 22.00 yuan / m2, unchanged month on month; Glass fiber: the price of winding direct yarn this week is 6250 yuan / ton, with a month on month ratio of – 1.57%; The price of G75 electronic yarn was 8850 yuan / ton, unchanged month on month. Carbon fiber: the average market price of carbon fiber this week was 186.25 yuan / kg, unchanged month on month; The average price of large tow in China is 145 yuan / kg, and the average price of small tow in China is 225 yuan / kg, which is flat month on month.
Investment suggestions:
Weekly market observation: after the central bank announced a 15bps cut in the five-year LPR on Friday, the leading consumer building materials generally rebounded, and the glass leading Zhuzhou Kibing Group Co.Ltd(601636) stock price soared. From the fundamental data, the infrastructure chain is the most prosperous segment of the construction and building materials industry. The infrastructure investment data and the data of central construction enterprises verify this fact, and it is suggested to focus on the allocation of central construction enterprises.
Preferred combination of building materials: Zhejiang Huatie Emergency Equipment Science & Technology Co.Ltd(603300) (15xpe, optimistic about the equipment rental track), China Communications Construction Company Limited(601800) (0.6xpb, revaluation of stock operating assets), China State Construction Engineering Corporation Limited(601668) (0.6xpb, optimistic about the improvement of real estate business against the trend), Luyang Energy-Saving Materials Co.Ltd(002088) (16xpe, the volume and price of ceramic fiber leaders rise simultaneously under the trend of emission reduction), Zhuzhou Kibing Group Co.Ltd(601636) (8xpe, the performance elasticity of float glass and the valuation elasticity brought by photovoltaic glass) Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) (22xpe, the margin of real estate policy is relaxed, and the company may usher in valuation repair after real estate sales pick up). Note: the valuations are the 22-year forecast data of Everbright Building Materials team.
Risk analysis: infrastructure investment is less than expected; Real estate investment fell sharply; Rising raw fuel prices; The epidemic situation is repeated.
