Recently, the National Bureau of statistics released the output data of the building materials industry in December 2021 and some building materials consumption data.
The annual cement output decreased slightly in 2021. In 2021, the cumulative cement output in China was 2.363 billion tons, a year-on-year decrease of 1.2%, an increase of 1.4% compared with 2019; Among them, the monthly cement output in December was 191 million tons, a year-on-year decrease of 11.1% and a month on month decrease of 4.37%. In December, the cement output showed a contraction trend, which was in line with the current market expectation. December is the off-season of the cement industry, and the northern region has entered the phase of staggered peak and kiln shutdown in winter, resulting in the contraction of the national cement supply. According to the peak shifting production time in winter in various provinces and cities, it is expected that the low cement output will continue until the middle of March 2022.
The growth rate of infrastructure and real estate investment has not improved. In 2021, the investment in infrastructure construction increased by 0.4% year-on-year, down 0.1 percentage points from January to November. The annual investment in real estate development increased by 4.4% year-on-year, down 1.6 percentage points from January to November. The new construction area of houses in the whole year decreased by 11.4% year-on-year, 2.3 percentage points lower than that from January to November. In December, infrastructure and real estate investment did not improve in a single month. Due to the support of national policies for infrastructure construction, infrastructure investment is expected to rise in 2022, which is good for the cement market demand.
In December, the output of glass increased. In 2021, the output of flat glass reached 1.017 billion weight boxes, a year-on-year increase of 8.4%, the growth rate was the same as that from January to November; In December, the output of flat glass increased by 3.2% year-on-year, 2.84% month on month, and the output of glass increased slightly. In 2021, the completed area of houses increased by 11.2% year-on-year, down 2.3 percentage points from January to November. In December, the completed area of the real estate decreased, the market demand for flat glass weakened month on month, and the decline in demand led to the decline in the price of flat glass. According to Zhuo Chuang information, the average price of float glass in China in December was 2190.32 yuan / ton, down 2.51% month on month and 0.57% year-on-year. With the arrival of spring after, the completion end will pick up, the glass market demand is expected to increase, and the price of flat glass will resume the upward trend.
The market demand for consumer building materials increased positively, and the retail sales of construction and decoration materials increased by 20.4% year-on-year in 2021; In December, retail sales in a single month increased by 7.5% year-on-year. Throughout the year, benefiting from the release of the demand for old transformation, the market demand for consumer building materials increased positively in 2021. With the recovery of the completed end in spring, the demand for consumer building materials is expected to increase significantly. In the context of increasing industry concentration, leading enterprises in the consumer building materials industry will benefit.
Investment suggestions: recommend leading enterprises Guangdong Kinlong Hardware Products Co.Ltd(002791) (002791. SZ), Beijing New Building Materials Public Limited Company(000786) (000786. SZ), Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) (002271. SZ), Keshun Waterproof Technologies Co.Ltd(300737) (300737. SZ), Zhejiang Weixing New Building Materials Co.Ltd(002372) (002372. SZ); Glass: industry leader Zhuzhou Kibing Group Co.Ltd(601636) (601636. SH) benefiting from the recovery at the completion end; Cement: it is recommended to pay attention to regional leading enterprises Huaxin Cement Co.Ltd(600801) (600801. SH), Gansu Shangfeng Cement Co.Ltd(000672) (000672. SZ).
Risk tips: the risk of raw material prices rising, downstream demand falling short of expectations, new product expansion falling short of expectations, and new industrial capacity exceeding expectations.
