One week market review: 1) Ministry of housing and urban rural development: this year, we should continue to promote the structural reform of housing supply side, adhere to the simultaneous development of rent and purchase, and optimize the housing supply structure. 2) National Bureau of Statistics: in 2021, the national fixed asset investment (excluding farmers) increased by 4.9% over the previous year, with an average growth of 3.9% in the two years. 3) According to the 14th five year plan for housing and urban rural construction in Wuhu City, 100% of affordable housing will adopt prefabricated buildings by the end of 2025.
This week’s view: the investment in affordable housing is stronger than expected, and the assembly type is promoted rapidly, emphasizing the good opportunity of industrial chain investment again. On January 20, the Ministry of housing and urban rural development said that it would vigorously increase the supply of affordable rental housing, focus on large cities with net population inflow, and build and raise 2.4 million affordable rental housing in 22 years. Over the past 21 years, affordable housing support policies have been intensively promulgated and intensified. The Politburo meeting mentioned pushing forward the construction of affordable housing rental housing three times. The central economic and work conference emphasized promoting the construction of affordable housing. The Ministry of housing and urban rural development proposed to strive to increase the proportion of new affordable housing to more than 30% during the 14th Five Year Plan period, and the government will provide support for the construction of affordable housing from multiple dimensions and levels, such as land, capital, finance, tax reduction and fee reduction and administrative approval optimization. Superimposed on the Ministry of housing and urban rural development’s unexpected preparation plan for affordable rental housing, the government’s attention to affordable housing is increasing. At present, most of the key first and second tier cities have responded positively and successively announced the construction plan of affordable housing during the 14th Five Year Plan period. Among them, the new affordable housing in Beishang Shenzhen accounts for more than 45% of the new housing. We estimate that 7 million affordable housing units will be started in key 39 cities during the 14th Five Year Plan period. Considering that there are still four years before the release of the affordable housing construction plan by the end of the 14th Five Year Plan period, 1.75 million affordable housing units will be started each year. This time, 2.4 million affordable housing units are planned to be built in 22 years, 37% higher than our previous expectation and + 155% year-on-year. The investment scale of affordable housing has increased significantly than expected.
Considering that the housing area of affordable housing is dominated by small households of no more than 70 square meters, the corresponding construction area is 168 million square meters, and the corresponding investment scale exceeds 600 billion, it is expected to become an important marginal stability force other than commercial housing investment. In the early stage of development, prefabricated buildings are faced with problems such as high cost, low consumer acceptance and imperfect industrial supporting facilities. However, due to the advantages of standardization, industrialization, energy conservation and environmental protection, they are promoted faster in government invested construction projects and public buildings. We believe that with the increase of affordable housing investment, the demand for prefabricated buildings is expected to continue to expand. On January 20, the National Conference on housing and urban rural development was held in Beijing. The Ministry of housing and urban rural development stressed that “in 2022, we will improve the intelligent construction policy and industrial system, vigorously develop prefabricated buildings, and the proportion of prefabricated building area in new buildings will reach more than 25% in 2022”. This proportion is 5pct higher than that in 2020, and the prefabricated construction continues to accelerate. We once again emphasize the good opportunity of industrial chain investment.
Infrastructure data tracking: 1) special bonds: the issuance of special bonds this week was 84.327 billion yuan. As of January 22, 2022, the cumulative issuance was 122.528 billion yuan. Urban investment bonds: the issuance of urban investment bonds is 46.310 billion yuan, and the net financing amount is – 60.142 billion yuan. So far, the cumulative net financing amount is 134.995 billion yuan, with a cumulative year-on-year increase of – 47.96%. 2) There was no major reply from the national development and Reform Commission this week. 3) Order tracking: a total of 7 companies won 11 orders this week, with a total amount of 11.497 billion yuan.
Investment suggestions: focus on Sichuan Road & Bridge Co.Ltd(600039) , Suwen Electric Energy Technology Co.Ltd(300982) , Zhejiang Yasha Decoration Co.Ltd(002375) , Zhejiang Southeast Space Frame Co.Ltd(002135) , Anhui Honglu Steel Construction(Group) Co.Ltd(002541) , other stocks recommend China Railway Group Limited(601390) , China Communications Construction Company Limited(601800) , China State Construction Engineering Corporation Limited(601668) , China Railway Construction Corporation Limited(601186) , and it is recommended to pay attention to Anhui Fuhuang Steel Structure Co.Ltd(002743) , Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , Dongzhu Ecological Environment Protection Co.Ltd(603359) .
Market review:
1) industry: this week, the market rose by 0.04%, the gem fell by 3.09%, and the construction industry rose by 2.99%, which performed well in the whole market.
2) individual stocks: a total of 48 stocks rose this week. The top five companies were Lingnan Eco&Culture-Tourism Co.Ltd(002717) (28.61%), Hongrun Construction Group Co.Ltd(002062) (14.69%), Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) (13.56%), Shenzhen Institute Of Building Research Co.Ltd(300675) (12.27%), Shanghai Yanhua Smartech Group Co.Ltd(002178) (11.66%); The companies with the top five declines were Shanghai Zhongyida Co.Ltd(600610) (- 10.62%), Zhejiang Southeast Space Frame Co.Ltd(002135) (- 8.64%), Wuhan Nusun Landscape Co.Ltd(300536) (- 8.35%), Sinosteel Engineering & Technology Co.Ltd(000928) (- 7.97%), East China Engineering Science And Technology Co.Ltd(002140) (- 7.83%). From a monthly Perspective (20220101 to 20220122), 55 stocks rose, and 55 stocks have risen since the beginning of the year.
3) capital tracking: from the macro situation, the spot exchange rate of the US dollar against the RMB this week was 6.3397, and the closing price on Friday was 6.3435. The yield to maturity of the 10-year Treasury note fell to 2.7100%, closing at 2.7935% on Friday, down 8.35bp from last week.
4) others: a total of 9 companies had block transactions this week, and 5 important shareholders increased or decreased their holdings.
Risk tip: the growth rate of infrastructure investment does not meet expectations, and the degree of policy promotion is lower than expected.
