Focus this week: the decline of cement production expanded in April, and the growth rate of real estate investment continued to decline. It is optimistic about the subsequent steady growth force
Output of cement and glass: the output of cement and glass reached – 18.9% and – 1.4% in the same month, and the decline of cement output expanded. In April, the cement output reached – 18.9% and – 14.8% year-on-year respectively. The cumulative cement output in the previous April continued to decline year-on-year, and the decline was larger than that in the previous March. In April, the year-on-year and cumulative year-on-year glass production reached – 1.4% and 0.7% respectively. The cumulative year-on-year growth rate in the first four months was lower than that in the first three months.
Downstream investment: in April, the sales area of commercial housing, real estate investment and infrastructure investment changed by – 39.0%, – 10.1% and 4.3% year-on-year, and the growth rate of real estate investment continued to decline. In April 2022, the area of commercial housing sales, construction, new construction and completion changed by – 39.0%, – 38.7%, – 44.2% and – 14.2% year-on-year, and the same ratio in March was – 17.7%, – 21.5%, – 22.2% and – 15.5% respectively. In April 2022, the housing price index of Baicheng was 1.5% year-on-year, down 0.2% from the previous month; The generalized inventory elimination cycle was 3.52 years, an increase of 0.12 years over the previous month. In April 2022, real estate investment and infrastructure investment were – 10.1% (March – 2.4%) and 4.3% (March 11.8%) year-on-year; The completed amount of fixed asset investment in April was 1.8% year-on-year and 6.6% year-on-year in March. The growth rate of real estate investment continued to decline. The year-on-year growth rates of construction engineering and land purchase fees in April were – 8.8% and – 11.5% respectively, and 1.0% and – 6.2% respectively in March.
The 5-year LPR fell more than expected, and the demand of the real estate market is expected to improve. On May 20, the people’s Bank of China authorized the national interbank lending center to announce that the latest loan market quotation interest rate (LPR) quotation: the LPR of one-year and five-year are 3.7% and 4.45% respectively. Among them, the one-year LPR was 3.7% last month and is expected to be 3.65%; The 5-year LPR was 4.6% last month and is expected to be 4.55%. This time, it is reduced by 15bp, exceeding the expected range. Since December 2021, the five-year LPR has been reduced by 20bp and the one-year LPR has been reduced by 15bp On May 15, the central bank lowered the first mortgage interest rate by 20bp, mainly for the incremental housing market. The 5-year LPR is mainly aimed at long-term loans, and this reduction will benefit the stock housing market. Recently, the real estate fundamentals have continued to decline, the central bank has cut interest rates frequently, and increased the increment and stock market. The demand of the real estate market is expected to improve.
Investment suggestions: 1) the trend of infrastructure investment is good, and the orders of relevant companies are sufficient. Pay attention to the subject matter of new infrastructure Suwen Electric Energy Technology Co.Ltd(300982) and old infrastructure China Railway Group Limited(601390) , China Railway Construction Corporation Limited(601186) (not covered), Shandong Hi-Speed Road&Bridge Co.Ltd(000498) (not covered). 2) The real estate financing environment is improving, the macro environment is improving, and attention is paid to the home decoration and building materials companies with good performance Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Keshun Waterproof Technologies Co.Ltd(300737) , etc.
Plate rise and fall: this week, the Shanghai Composite Index rose 2.0%, the gem index rose 2.5%, Hithink Royalflush Information Network Co.Ltd(300033) all a rose 2.8%, and building materials (Shenwan) rose 2.8%. In the sub sectors of the building materials industry, the indexes of glass, cement, refractories, pipes and other building materials rose by + 7.2%, + 0.9%, + 2.4%, – 1.9% and + 1.4% respectively
The top five stocks rose: Zyf Lopsking Aluminum Co.Ltd(002333) (+ 25.2%), Jiangsu Lidao New Material Co.Ltd(603937) (+ 22.2%), Changzhou Almaden Co.Ltd(002623) (+ 22.2%), Gansu Qilianshan Cement Group Co.Ltd(600720) (+ 20.6%), Quakesafe Technologies Co.Ltd(300767) (+ 18.0%)
Top five stocks with declines: Xinjiang Guotong Pipeline Co.Ltd(002205) (- 14.4%), Hainan Ruize New Building Material Co.Ltd(002596) (- 12.0%), Luoyang Northglass Technology Co.Ltd(002613) (- 9.9%), Cocreation Grass Co Ltd(605099) (- 5.2%), Zhejiang Walrus New Material Co.Ltd(003011) (- 4.9%)
Valuation of each section: 1) the latest TTM P / E ratio of cement Shenwan index is 8.30 times, and the P / E ratio range from the beginning of 2015 to the present is 6.32 times to 32.79 times; The latest price to book ratio of Shenwan cement index is 1.14 times, and the price to book ratio range from 1.02 times to 2.67 times since the beginning of 2015. 2) The latest TTM P / E ratio of glass Shenwan index is 11.98 times, and the P / E ratio range from 10.97 times to 121.46 times since the beginning of 2015; The latest price to book ratio of glass Shenwan index is 2.57 times, and the price to book ratio range from 1.24 times to 5.61 times since the beginning of 2015. 3) The latest TTM P / E ratio of pipe Shenwan index is 28.93 times, and the P / E ratio range from 19.38 times to 88.39 times since the beginning of 2015; The latest price to book ratio of Shenwan index of pipes is 2.94 times, and the price to book ratio range from 2.02 times to 5.59 times since the beginning of 2015. 4) The latest TTM P / E ratio of Shenwan index of refractories is 20.92 times, and the P / E ratio range from 13.34 times to 217.94 times since the beginning of 2015; The latest price to book ratio of Shenwan index of refractory is 1.77 times, and the price to book ratio range from 1.39 times to 5.88 times since the beginning of 2015. 5) The latest TTM P / E ratio of other building materials Shenwan index is 21.51 times, and the P / E ratio range from 17.09 times to 91.37 times since the beginning of 2015; The latest price to book ratio of other building materials Shenwan index is 2.54 times, and the price to book ratio range from 2.07 times to 7.42 times since the beginning of 2015.
Key data tracking: cement: the national cement price index decreased by 1.2% on a weekly basis and 4.7% on a monthly basis. Glass: the price of glass futures increased by 2.1% on a weekly basis, and the market price of float flat glass (4.8 / 5mm) decreased by 0.3% on a weekly basis. The price of raw materials in Brent ring rose by 1.2% compared with that in the UK. Real estate infrastructure: in the first four months of 2022, real estate sales decreased by 20.9% and new construction area decreased by 26.3% year-on-year.
Industry trends: 1) digital cement network: the demand continues to weaken, and the national monthly cement output fell to the lowest in the same period of nearly a decade in April; 2) Centennial construction network: another 50 yuan / ton! The price of clinker along the river in East China is weak and has fallen by 100 yuan / ton; 3) Cctd China coal market network: National Development and Reform Commission: closely monitor coal prices and conduct immediate interviews beyond a reasonable range; 4) Centennial construction network: down 14.8%! In the first four months, the cement output of provinces and cities across the country was released, with a drop of more than 10% in Guangdong, Sichuan, Jiangsu and Anhui; 5) Cctd China coal market network: at present, more than 150 million tons of coal are stored in national unified dispatching power plants.
Important reminders for next week: 1) May 23: Dehua Tb New Decoration Material Co.Ltd(002043) , Sichuan Shuangma Cement Co.Ltd(000935) shareholders’ meeting was held. 2) May 24: ST King Kong shareholders’ meeting was held. 3) May 25: Jiangxi Geto New Materials Corporation Limited(300986) , China West Construction Group Co.Ltd(002302) shareholders’ meeting was held. 4) May 26: Fujian Supertech Advanced Material Co.Ltd(688398) , Yunnan Bowin Technology Industry Co.Ltd(600883) , Luoyang Glass Company Limited(600876) , Zhejiang Jianfeng Group Co.Ltd(600668) , Guangdong Golden Glass Technologies Limited(300093) shareholders’ meeting was held Quakesafe Technologies Co.Ltd(300767) converted into shares for listing. 5) May 27: Gansu Qilianshan Cement Group Co.Ltd(600720) , Ningbo Xianfeng New Material Co.Ltd(300163) shareholders’ meeting was held.
Investment suggestions: 1) the trend of infrastructure investment is good, and the orders of relevant companies are sufficient. Pay attention to the subject matter of new infrastructure Suwen Electric Energy Technology Co.Ltd(300982) and old infrastructure China Railway Group Limited(601390) , China Railway Construction Corporation Limited(601186) (not covered), Shandong Hi-Speed Road&Bridge Co.Ltd(000498) (not covered). 2) The real estate financing environment is improving, the macro environment is improving, and attention is paid to the home decoration and building materials companies with good performance Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Keshun Waterproof Technologies Co.Ltd(300737) , etc. 3) The demand for steady growth is good, and the dividend yield of the cement sector is high. Pay attention to Gansu Shangfeng Cement Co.Ltd(000672) , Anhui Conch Cement Company Limited(600585) , Guangdong Tapai Group Co.Ltd(002233) , etc. 4) BIPV industry’s future space is open, focusing on Zhejiang Southeast Space Frame Co.Ltd(002135) etc. 5) Domestic UTG leading enterprises and other leading companies in subdivided fields performed well, paying attention to Triumph Science & Technology Co.Ltd(600552) and so on.
Risk warning: the price of raw materials rises or exceeds expectations; Downstream demand or lower than expected; Environmental protection policies may be repeated; Intensified industry competition, etc.
