This week (2022.1.10 – 2022.1.14, the same below), the building materials sector (SW) rose or fell by – 6.89%. In the same period, the Shanghai Composite Index and wandequan a index rose or fell by – 1.63% and – 1.12% respectively, and the excess return was – 5.26% and – 5.77% respectively.
Fundamentals and high-frequency data of bulk building materials: (1) cement: the national high-standard cement market price this week was 519 yuan / ton, compared with – 7 yuan / ton last week and + 71 yuan / ton compared with the same period in 2021. There was no increase in prices compared with last week; The areas where prices fell were the Yangtze River Delta (- 5 yuan / ton), the Yangtze River Basin (- 4 yuan / ton), Guangdong and Guangxi (- 30 yuan / ton), Central South (- 25 yuan / ton) and Southwest (- 6 yuan / ton). This week, the average cement warehouse location of national sample enterprises was 61.6%, which was -0.5pct compared with last week and + 6.6pct compared with the same period in 2021. The average cement delivery rate (daily delivery rate / production capacity in process) of the national sample enterprises was 29.9%, which was -3.2pct compared with last week and -11.6pct compared with the same period in 2021. (2) Glass: according to the statistics of Zhuo Chuang information, the average price of the national float white glass original sheet is 2065 yuan / ton, which is – 43 yuan / ton compared with last week and – 242 yuan / ton compared with the same period in 2021. According to the statistics of Zhuo Chuang information, the original film inventory of sample enterprises in 13 provinces in China was 38.4 million heavy boxes, up from + 740000 heavy boxes last week and + 20.76 million heavy boxes in the same period in 2021. (3) Glass fiber: the median turnover of alkali free 2400tex direct yarn was 6150 yuan / ton, the same as last week, and + 400 yuan / ton compared with the same period in 2021.
Zhou viewpoint
Last week, affected by factors such as the lower than expected scale of affordable housing in the 14th five year plan and the intensification of real estate credit risk concerns, individual stocks in the real estate and infrastructure chain made significant adjustments in the second half of the week. Financial data in December showed that the performance of medium and long-term loans of residents and enterprises was weak, indicating that the demand for physical financing was still weak, The rebound in the growth rate of social finance is mainly due to the advance issuance of special bonds and the acceleration of fiscal expenditure. The increase of downward pressure on the economy requires further efforts to broaden the currency and stabilize growth. In addition to the restoration of the post real estate industrial chain, we believe that with the enhancement of the demand for stable growth of policies, key areas such as water conservancy, transportation and municipal administration in infrastructure construction will continue to make efforts, and pipeline reconstruction and urban rail transit are expected to become structural highlights. It is recommended to continue to pay attention to the pre and medium cycle varieties with low valuation such as cement and pipe materials. In terms of bulk building materials: under the force of fiscal policy, the growth rate of infrastructure picked up, the policies of affordable housing and guaranteed delivery housing stabilized the expectation of real estate investment. Based on the peak staggering and the strengthening of industry self-discipline, we estimate that the supply capacity of the industry after eliminating the peak staggering will decrease by 0.1% year-on-year in 2022. With the support of stable investment on demand, the cement boom can still remain high. The dividend yield of 5 ~ 9% in 2021 makes the current price earnings ratio of 6 ~ 7 times have room to repair. It is suggested to pay attention to Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) and Gansu Shangfeng Cement Co.Ltd(000672) with strong performance certainty, bright spots in the extension of medium and long-term industrial chain, Guangdong Tapai Group Co.Ltd(002233) , Jiangxi Wannianqing Cement Co.Ltd(000789) with high dividend yield, and Tangshan Jidong Cement Co.Ltd(000401) , Xinjiang Tianshan Cement Co.Ltd(000877) which are expected to benefit from the integration of the northern market and great business elasticity.
Decoration and building materials: we expect the infrastructure chain to grow steadily and counter cyclical adjustment to boost demand. Recently, the central government mentioned that the new special bonds focus on water conservancy, transportation, municipal infrastructure construction, affordable housing projects and other fields. The Ministry of water resources mentioned the implementation of major national water network projects. We expect that the construction of underground pipe network and sponge city will bring sustainable increment during the 14th five year plan period. The completion end of the real estate remained resilient, but the new construction and sales remained weak. In terms of real estate, the easing signal has been gradually released, and the bottom of the policy has been found. We expect that the financing end of subsequent real estate enterprises and consumers is expected to be slightly relaxed. In addition, accelerating the construction of affordable rental housing during the 14th Five Year Plan period will bring some increment. Previously, the valuation of the decoration building materials sector has been in the lower position of the historical center due to the slowdown in demand, the rise of raw materials and cash flow pressure. Under the relaxed expectation of the margin of real estate, the decline of the high cost of raw materials, the gradual release of bad debt provision and cash flow risk expectation, the overall sector is expected to usher in performance and valuation repair. It is recommended to pay attention to Guangdong Kinlong Hardware Products Co.Ltd(002791) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , and China Liansu, Yonggao Co.Ltd(002641) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Beijing New Building Materials Public Limited Company(000786) , Keshun Waterproof Technologies Co.Ltd(300737) , Jiangsu Canlon Building Materials Co.Ltd(300715) , Monalisa Group Co.Ltd(002918) , Zhejiang Walrus New Material Co.Ltd(003011) .
Risk warning: the epidemic situation exceeded expectations, the real estate credit risk was out of control, and the policy concentration exceeded expectations.
