Key investment points
Key events of this week: 1) the implementation of major projects under special planning is expected to be accelerated: on January 10, the executive meeting of the State Council pointed out that the 1.2 trillion yuan of local government special bond funds issued in the fourth quarter of last year should be transferred to specific projects as soon as possible. Pay close attention to the issuance of special bonds issued this year, and strive to form more physical workload in the first quarter. 2) Jiangxi vigorously promotes the development of distributed photovoltaic in development zones: Jiangxi Provincial Development and Reform Commission recently informed that it will strive to achieve more than 80% coverage of roof photovoltaic power generation with development conditions in development zones across the province by the end of 2024. 3) During the pressure period of the waterproof industry, the leading business is more stable: Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) the announcement predicts that the revenue / net profit attributable to the parent company in 21 years is + 46.8% / + 23.5% year-on-year, and still achieves rapid growth during the pressure period of the industry; Keshun Waterproof Technologies Co.Ltd(300737) announced the pre reduction of performance, mainly because the company actively made a more comprehensive provision for the main risk points in accounts receivable out of risk considerations. We expect the gross profit margin of Q4 to be basically flat compared with Q3. 4) Brand building materials leaders continue to expand their categories: recently Guangdong Kinlong Hardware Products Co.Ltd(002791) officially signed a strategic cooperation agreement with Xinfa group and entered the gypsum board industry. 5) The glass fiber industry maintains a high profit level: China Jushi Co.Ltd(600176) / Shandong Fiberglass Group Co.Ltd(605006) the announcement predicts that the net profit attributable to the parent company will be 5.80-7.01 billion / 510-600 million in 21 years, with a year-on-year increase of 140% – 190% / 195% – 246%.
This week’s view: some companies released performance forecasts this week. On the whole, the profitability of the glass fiber industry continues. Although the waterproof industry is affected by the rise of raw material prices, the operation of leading companies is more stable. We believe that we should pay attention to the infrastructure chain in the short term and pay attention to companies whose performance forecast exceeds expectations; Investment opportunities for brand building materials and new materials were promising throughout the year. The expected bottom of the real estate corresponds to the bottom of the valuation of brand building materials (refer to the resumption in 2014 / 18). The performance repair is expected. The layout of brand building materials has high certainty. In the field of new materials, 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. The glass fiber cycle weakened, the roving boom is expected to continue, and the price center of electronic cloth fell. Float glass price toughness still exists; The bottom of photovoltaic glass cycle may have price elasticity. Cement industry integration + extension; Water reducing agent opens up growth space for functional materials.
At present, brand building materials are gradually entering the layout time point. We believe that the current leading industries such as gypsum board, waterproof, ceramic tile and coating have high configuration value. At the industry level, we believe that the completion end is stronger than the commencement end. In terms of segmentation, the industry leaders with low market share or category expansion logic deserve special attention. Even if the overall demand of the industry is under pressure, the anti periodicity of the leaders will be significantly better than that of the industry. 1) Beijing New Building Materials Public Limited Company(000786) : gypsum board landscape and high-end resonance, waterproof and keel provide growth; The periodic attribute is expected to weaken significantly; The current valuation is very cost-effective; In the past, the market’s valuation of the company mainly referred to the cyclical stocks with low ceiling. With the gradual implementation of the strategy of one body and two wings and global layout, the growth is prominent, and the valuation space is expected to be opened. We continue to focus on recommendation. 2) The waterproof industry has a large long-term demand space, and the photovoltaic roof system also brings new increment. At present, the industry pattern is relatively clearer, and the leader has also built strong competitive barriers. With the help of channel advantages, leading enterprises expand in multiple categories, Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) extend their business to the fields of coatings / thermal insulation materials, Keshun Waterproof Technologies Co.Ltd(300737) cut into the blue ocean market of building vibration reduction and isolation, and leading enterprises fully extend their business lines to create new growth points and enhance anti periodicity. Focus on Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Keshun Waterproof Technologies Co.Ltd(300737) , and pay attention to Jiangsu Canlon Building Materials Co.Ltd(300715) . 3) Ceramic tiles ( Monalisa Group Co.Ltd(002918) , Guangdong Dongpeng Holdings Co.Ltd(003012) ): large industries, small companies and leading enterprises have great room to improve the market share; The driving factors are brand, channel and cost; We believe that companies with a revenue volume of 10-20 billion are expected to appear in the industry in the next 2-3 years. The current valuation has fully reflected the pessimistic expectation, but the actual fundamentals are not poor. It is mainly recommended that Guangdong Dongpeng Holdings Co.Ltd(003012) (the product price is generally adjusted by 5% from October 1) and Monalisa Group Co.Ltd(002918) (5 of the 7 production lines temporarily shut down in the early stage have resumed production). 4) We continue to recommend Guangdong Kinlong Hardware Products Co.Ltd(002791) in the hardware industry. The core advantages of Jianlang are: obvious comprehensive supply capacity and service advantages caused by direct sales channels and information construction; In the future, reuse channels to expand the category of “asset light” and build a platform and integrated leader. The short-term market is worried that the tightening of real estate funds will affect the company’s cash flow. In fact, small enterprises are more affected, and the advantages of leading enterprises are expected to continue to play. 5) The C-end of the coating industry has strong brand and channel strength, and the leading enterprises have been fed back by the b-end, which we believe will continue to deepen. The cash flow / cost of short-term coating leading enterprises is affected by the tightening of real estate funds / the rise of raw material prices, which increases the operating pressure, but the high growth / continuous improvement trend of leading enterprises remains unchanged. It is recommended to Skshu Paint Co.Ltd(603737) , Asia Cuanon Technology (Shanghai) Co.Ltd(603378) . 6) In the pipe industry, we recommend Yonggao Co.Ltd(002641) (municipal and infrastructure account for nearly 40%, depending on the improvement of sales and management, and the valuation is cost-effective), Zhejiang Weixing New Building Materials Co.Ltd(002372) (looking at the business development of waterproof and water purification), and we suggest paying attention to China Liansu. 7) Wangli Security & Surveillance Product Co.Ltd(605268) : the company is the first stock to enter the door and lock the market. The C-end has strong brand and channel power, and the subsequent capacity expansion helps open the b-end market space; And the company relies on dealers to complete installation and service, with excellent cash flow level; In the follow-up, wooden doors, electronic locks and other products continue to make great efforts, with key recommendations.
New material field: 1) for the carbon fiber industry, we believe that the investment logic of the civil carbon fiber industry lies not only in the high demand (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 get the “raw silk” win the world. In the medium and long term, with reference to glass fiber, the penetration rate of the industry increases or depends on changing “price” for “demand”. We suggest paying attention to the carbon fiber leader Zhongfu Shenying (to be listed), Weihai Guangwei Composites Co.Ltd(300699) , precursor leader Jilin Carbon Valley, Jilin Chemical Fibre Co.Ltd(000420) , Sinofibers Technology Co.Ltd(300777) , and 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 PV installed capacity / PV cell p-type to n-type, the demand for high-purity quartz sand is growing rapidly, the supply side is newly added or limited, and the supply and demand is expected to maintain a tight balance; The demand for semiconductors 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, and Jiangsu Pacific Quartz Co.Ltd(603688) and Hubei Feilihua Quartz Glass Co.Ltd(300395) are mainly recommended. 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 security of the supply chain, domestic substitution is accelerated. It is recommended to pay attention to CSG a, which has achieved an iterative breakthrough in electronic cover technology and completed the verification of downstream mobile phone manufacturers. 4) UTG: the penetration of folding screen mobile phones is accelerated + the trend of replacing CPI 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) of UTG mass production and shipment.
Glass fiber: the industry cycle is weakened and the boom is expected to continue. This week, the average price of 2400tex winding direct yarn was 6133 yuan / ton (flat month on month, year-on-year + 467); The average price of electronic yarn G75 is 12250 yuan / ton (Mom – 2250, yoy + 1150). We expect that the new capacity of the industry will be limited in 22 years, with roving / electronic yarn of about 42 / 100000 tons respectively. Moreover, the production line is put into operation more dispersed. We expect the marginal new capacity of 22q1-22q4 to be 1.7/1.7/3.3/13000 tons / quarter respectively, with a relatively mild impact. We expect that the global effective production capacity / demand of glass fiber in 22 years will be 9.36/9.43 million tons respectively, with tight balance between supply and demand and low inventory, and the price boom is expected to continue. 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 leader has 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 leader in the glass fiber industry is significantly enhanced whether from the perspective of increasing market share or continuous decline in cost. We expect that the profit of the bottom leader in the next round is expected to increase significantly compared with history. We continue to focus on recommending the glass fiber leader China Jushi Co.Ltd(600176) . We also recommend Sinoma Science & Technology Co.Ltd(002080) (diaphragm price starts the upward cycle, wind power is expected to hit the bottom and rise, glass fiber profit is expected to exceed expectations, and continue to be optimistic about the future growth sustainability of the three sectors), Jiangsu Changhai Composite Materials Co.Ltd(300196) (capacity expansion planning is clear, growth is gradually realized, industrial chain integration has strong risk resistance), Shandong Fiberglass Group Co.Ltd(605006) .
Building glass price toughness still exists; The bottom of photovoltaic glass cycle may have price elasticity. The average price of float glass this weekend is 2055 yuan / ton (Mom – 25, yoy – 234); Weekend inventory of 38.3 million heavy containers (mom + 64, yoy + 2066); At the weekend, the production capacity of glass in production was 175225t / D (mom + 400). This week, China’s float glass market was weak, the prices of manufacturers in some regions were lowered, the goods preparation of traders was ok, and the float glass factory had a strong intention to stabilize the price. In the later stage, the market demand is limited, and the transaction of goods preparation in the middle and lower reaches is dominated. Most regional manufacturers have no obvious intention to reduce the price. Individual factories plan to deposit and raise the price, and the market expectation is mainstream or stable. We believe that under the “guaranteed delivery” of the 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 production capacity with kiln age of 8-10 years / more accounts for 14.1% / 14.5% respectively. The cold repair of the old production line may lead to supply contraction. At present, the price and cost of glass are close. Under the high cost of raw materials / energy, manufacturers are willing to support the price, and the glass price is expected to continue to pick up. For photovoltaic glass, under the dual control of energy consumption, the new supply may be less than expected, and the price at the bottom of the industrial cycle may be upward elastic. Optimistic about the income proportion of traditional glass enterprises in the field of photovoltaic glass and improve their cost competitiveness. Continue to focus on Zhuzhou Kibing Group Co.Ltd(601636) , and it is recommended to pay attention to CSG a, Xinyi Glass, Luoyang Glass Company Limited(600876) .
Considering that the final demand period has entered and peak production has been staggered in many places, the cement price is expected to decline seasonally, but the overall price center will remain high. The advanced development of follow-up infrastructure investment and the expected improvement of real estate are expected to support demand, and the role of policy regulation of coal price has been reflected, and the cost pressure of enterprises is expected to be relieved. We continue to be optimistic about the valuation and repair opportunities of cement sector. This week, the national cement market price continued to fall month on month, with a decrease of 1.4%. The price drop areas are mainly Shanghai, Jiangsu, Fujian, Guangxi, Hainan and Guizhou, with a range of 30-50 yuan / ton. In mid January, as the Spring Festival approached, workers returned home one after another, the operating rate of the project and mixing plant continued to decline, and the cement price continued to decline, which was in line with expectations. The national storage capacity ratio was 60.6%, with a month on month ratio of -0.6pct, a year-on-year increase of + 9.6pct; The shipment rate was 42.6%, with a chain comparison of -3.3pct and a year-on-year comparison of -15.6pct. We believe that the combination policy regulation of “price limit + production increase” of coal has gradually played a role in recent years. Enterprises actively carry out peak shifting production, Q4 price center is expected to remain high, and the cost pressure is expected to be relieved. Looking forward to 22 years, although the overall real estate demand may be under pressure, the margin has improved, and with the development of infrastructure, the overall demand toughness will remain; In addition, the coal price is expected to fall, and the enterprise profit toughness is expected to be maintained. We are still optimistic about the further repair of the sector. It is recommended to focus on Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) , Xinjiang Tianshan Cement Co.Ltd(000877) , Guangdong Tapai Group Co.Ltd(002233) , and it is recommended to focus on Gansu Shangfeng Cement Co.Ltd(000672) , Jiangxi Wannianqing Cement Co.Ltd(000789) , and China building materials.
Other underestimated sectors: it is recommended to pay attention to the leader of refractory Beijing Lier High-Temperature Materials Co.Ltd(002392) , and continue to focus on 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, which is expected to continue to grow in the next three years and the market share will continue to increase; The price of ethylene oxide, the raw material, dropped rapidly, and the price increase of the company was gradually implemented at the end of September, which is expected to improve its profitability; 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.
Risk tip: macroeconomic downside risk; The epidemic has led to lower than expected demand; Risk of relaxation of production restriction and new production capacity; Risk of poor capital turnover of 2B end enterprises.
