The construction sector fell this week, underperforming the overall market. In November, infrastructure investment declined, the decline in real estate investment narrowed, construction fell, completion improved significantly, and real estate sales also decreased year-on-year. Pay attention to the comprehensive transportation construction plan of the 14th five year plan issued by Heilongjiang Province and Jiangxi Province.
The overall decline in construction underperformed the market, and the segments rose more or fell less: this week, the Shenwan construction index closed at 2203.7 points, down 4.9% month on week, underperforming the market. The industry’s average price to book ratio was 0.9 times, slightly lower than that of last week. Segments generally fell, of which the fabricated fell by 5.1%, with the largest decline; Decoration fell 0.2%, the smallest decline.
Pay attention to the comprehensive transportation construction plan of the 14th five year plan issued by Heilongjiang Province and Jiangxi Province: Recently, Heilongjiang Province and Jiangxi Province issued the comprehensive transportation construction plan of the 14th five year plan. Among them, Heilongjiang Province plans to invest 400 billion yuan in comprehensive transportation during the 14th Five Year Plan period, a significant increase of 82.6% compared with 219 billion yuan in the 13th five year plan; Jiangxi Province plans to invest 652.9 billion yuan in comprehensive transportation during the 14th Five Year Plan period, an increase of 45.7% compared with 448.1 billion yuan during the 13th Five Year Plan period. During the 14th Five Year Plan period, the comprehensive transportation investment in Heilongjiang Province and Jiangxi Province increased significantly. In addition, the “14th five year plan” transportation plans of the two provinces also propose to develop safe transportation, intelligent transportation and green transportation. By combing and summarizing the comprehensive transportation planning of the 14th five year plan issued by various provinces and cities, it can be found that the investment in comprehensive transportation planning and construction in many provinces and cities during the 14th Five Year Plan period has increased significantly compared with the 13th Five Year Plan period, and the comprehensive planning of various provinces and cities has proposed the development of safe transportation, intelligent transportation and green transportation. We believe that the field of transportation, especially intelligent transportation or infrastructure, is a key development field.
Infrastructure investment fell year-on-year, and the decline in real estate investment narrowed: in November, the fixed asset investment was 7.0 trillion, a decrease of 2.2%, of which the completed investment in infrastructure and real estate development was 1.8 trillion and 1.2 trillion respectively, with a year-on-year growth rate of – 7.3% and – 4.3% respectively. In November, real estate and infrastructure investment continued to decline year-on-year, but the year-on-year decline in real estate investment was smaller than that in October. In infrastructure construction, the investment in power, transportation and public utilities was 0.34 trillion yuan, 0.56 trillion yuan and 0.85 trillion yuan respectively. The year-on-year growth rates were – 1.4%, – 9.5% and – 8.1% respectively. The year-on-year decline in infrastructure investment in this month was larger than that in October, the year-on-year stability of power investment was basically maintained, and the year-on-year decline in transportation and public investment was obvious. However, the investment in public water conservancy increased significantly compared with October, with a growth rate of 14.3%.
The decline in construction and completion improved, and the land transaction was basically stable: in November, the planned land transaction area in 100 large and medium-sized cities totaled 110 million square meters, with a decrease of 0.2%, and the average transaction floor price was 2660 yuan / square meter. The construction, completion and sales areas were 160, 115 and 150 million square meters respectively, with a year-on-year growth rate of – 21.0%, 15.4% and – 14.0% respectively. In November, the land transaction area basically maintained stability year-on-year and increased month on month; Compared with the same period last year, the new construction data decreased, the completion data changed the decline in October, increased year-on-year, and increased significantly month on month. Recently, there has been a marginal easing trend in the policy of the real estate industry, and under the policy requirements of “moderately ahead of infrastructure investment”, the new construction data may improve. By the end of the year, the completion stage of real estate enterprises is expected to drive the completion data to continue to improve.
Key recommendation
Key recommendation: infrastructure sector, Shenzhen Capol International&Associatesco.Ltd(002949)
Main risks of rating
Risk tip: manufacturing investment slowed down, the promotion of prefabricated buildings was less than expected, and macro liquidity tightened.
