Market Review
In the five trading days last week (0110-0114), the building materials (CITIC) index fell 6.74%, the Shanghai and Shenzhen 300 fell 1.98%, and all sub sectors fell. The sectors that benefited from steady growth and increased significantly led the decline. Among individual stocks, Wuhu Conch Profiles And Science Co.Ltd(000619) , Xiamen Wanli Stone Stock Co.Ltd(002785) , Chongqing Sansheng Industrial Co.Ltd(002742) , Hainan Development Holdings Nanhai Co.Ltd(002163) , Guangdong Songfa Ceramics Co.Ltd(603268) led the increase. Continue to be optimistic about the restless market in spring driven by steady growth
Last week, the building materials index made a lot of corrections, and since the beginning of the year, it has not outperformed Shanghai and Shenzhen 300. We believe that the core reasons include: 1) Bloomberg predicts that the amount of new special bonds in 2022 will be 3.65 trillion yuan, which is the same as that in 2021, or some investors worry that the steady growth of infrastructure may be less than expected; 2) Last week, some consumer building materials companies released performance forecasts for 2021, and their performance was greatly affected by asset impairment.
We believe that we can continue to be optimistic about the spring market of building materials driven by steady growth at the current time. The reasons are as follows: 1) we proposed in the weekly report of the previous week that this round of steady growth of infrastructure construction may pay more attention to structural development. Although the total elasticity of infrastructure construction is not large, the prosperity of sub industries such as affordable housing and water conservancy pipe network is expected to be significantly boosted. From the market since the beginning of the year, The market also adds more structural opportunities for the heavy and fine molecule industry. Throughout the year, the high prosperity of the fine molecule industry is expected to pass on to the fundamentals of the company more smoothly; 2) Although the performance of consumer building materials still affects market sentiment to a certain extent, we believe that the performance of consumer building materials in the past 21 years is under pressure. Previously, the market may have expectations. We believe that consumer building materials after 22h1 are expected to be affected by the rebound of real estate and the decline of their own base, and the fundamentals show an upward trend; 3) According to our review in the weekly report of the previous week, in the 17-21 years, the building materials index outperformed the CSI 3 million and Wande all a index in Q1. We believe that with the acceleration of the project after the Spring Festival, the fundamentals and mood of the building materials sector are expected to be boosted, and the 22q1 building materials index is still expected to continue to outperform the market.
Actively grasp the restless market in the Spring Festival and recommend the consumption of building materials / pipelines / cement, etc
1) influenced by the real estate boom, 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 heating up 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 industry is at a low level. Next year, the overall supply and demand of the industry may still be in tight balance. The downward space for the unit profit of float glass is limited. 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 downstream such as wind power and overseas, and the increment on the supply side is limited.
Investment advice
Recommendations for consumer building materials Monalisa Group Co.Ltd(002918) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Beijing New Building Materials Public Limited Company(000786) , Keshun Waterproof Technologies Co.Ltd(300737) , Skshu Paint Co.Ltd(603737) , Asia Cuanon Technology (Shanghai) Co.Ltd(603378) , etc; Pipeline recommendation Yonggao Co.Ltd(002641) etc; Cement recommended Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) ; Glass recommended Triumph Science & Technology Co.Ltd(600552) , Zhuzhou Kibing Group Co.Ltd(601636) , Xinyi Glass, etc; Recommended China Jushi Co.Ltd(600176) , Sinoma Science & Technology Co.Ltd(002080) for glass fiber;
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.
