The fluctuation of capital construction demand still has a certain influence: take the proportion of capital construction fixed assets investment completed in 2017 as an example: road transportation accounts for 20%, municipal facilities management accounts for 26%, park and scenic spot management accounts for 8%, warehousing accounts for 4%, power generation production, power supply, city appearance management and flood control and waterlogging removal account for 2-3%, and other subdivisions account for no more than 2%. Therefore, although the total amount of infrastructure investment is restrained, its structural change will still bring investment opportunities in relevant fields.
The overall demand for infrastructure and real estate remains weak: the utilization of excavator hours is affected by the service life, real estate infrastructure, replacement population and so on. We tend to think that compared with the sales volume of excavators, the hourly utilization and ownership of excavators are better indicators to infer the development situation of real estate infrastructure. Since March 2021, the hourly utilization of excavators has been at the lowest level in the same period of nearly six years, and the sales volume of trucks has fallen to the lowest level in the same period of nearly five years since July 2021, indicating that the current infrastructure The overall situation of real estate demand continues to be weak. Road transportation: the demand is at the lowest level in the same period in recent 6 years. About 80% of petroleum asphalt is used for road construction (including new construction and maintenance). In the composition of infrastructure investment in 2017, the road transportation industry accounted for 20%, second only to the municipal facilities management industry (accounting for 26.13%), and the export of petroleum asphalt accounted for a relatively small proportion (8.56% in 2019). Therefore, generally speaking, petroleum asphalt is an important indicator for monitoring infrastructure. Since mid June 2021, the operating rate of national petroleum asphalt plants has mostly been at the lowest value in the same period of five years; Nearly 90% of all steel tires are used for the matching and replacement of trucks. In the category composition of road freight field, about 63% are heavy chemicals (2008 data), and 41% of tires are used for export (2019 data). The operating rate of all steel tires has been basically the lowest in the same period of six years since early June 2021, indicating that the current demand of road transportation industry is weak.
Focus on infrastructure structural opportunities: national water network, underground pipe network and municipal engineering construction: we expect that in 2020, 45% of the demand for centrifugal nodular cast pipes will be distributed in the field of municipal pipe network and 35% in the field of water conservancy. At present, the price and processing fee of nodular cast pipe are at the highest level since 2011; In 2020, 28% of the downstream demand of welded pipes will be used in the construction industry, 23% in the water industry, 34% in the gas industry and 15% in the heat and fire industry. The processing fee of welded pipes is also at a high level since 2010, indicating that the current demand for underground pipe network, water network construction and municipal engineering is good.
Investment suggestions: at present, the overall performance of real estate infrastructure remains weak, and the subsequent incremental space is limited, but we still need to pay attention to infrastructure structural opportunities. For example, the recent national water network, underground pipe network and municipal engineering construction policies are expected to drive the recovery of pipe demand. Key recommendations: Fangda Special Steel Technology Co.Ltd(600507) , Xinyu Iron & Steel Co.Ltd(600782) , Baoshan Iron & Steel Co.Ltd(600019) , Hunan Valin Steel Co.Ltd(000932) , Shanxi Taigang Stainless Steel Co.Ltd(000825) , and it is recommended to pay attention to: Xinxing Ductile Iron Pipes Co.Ltd(000778) , Tianjin You Fa Steel Pipe Group Stock Co.Ltd(601686) Maanshan Iron & Steel Company Limited(600808) 、 Zhejiang Kingland Pipeline And Technologies Co.Ltd(002443) 、 Jiangsu Changbao Steeltube Co.Ltd(002478) 。
Risk analysis: the demand for real estate has fallen sharply; The price of raw materials rose sharply; The construction of water network and underground pipe network was less than expected.
