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中银证券:地产数据低迷 建材行业关注四条主线

Bank of China Securities: Real estate data slump, building materials industry focuses on four main lines

Zhitong Finance ·  11/16/2023 21:12

In the building materials industry, Bank of China Securities recommended focusing on the four main lines of performance restoration and stock housing renovation and release.

The Zhitong Finance app learned that Bank of China Securities released a research report saying that in October, real estate data was generally sluggish, the decline in cement production declined, and prices rebounded. At this stage, the glass industry remains cautiously optimistic, and the decline in alkali prices is expected to improve industry profits. In the building materials industry, Bank of China Securities recommended focusing on the four main lines of performance restoration and stock housing renovation and release.

1. Performance recovery, clear industry production capacity, and increased concentration of leaders. Focus on leading shareholders with excellent performance such as Yuhong (002271.SZ), Beixin Building Materials (000786.SZ), Weixing New Materials (002372.SZ), Mona Lisa (002918.SZ), etc.

2. Real estate sales are gradually bottoming out, and stock house renovations are gradually increasing. Industries that can improve the living experience, low concentration, low penetration rate, and a high share of inventory refurbishment have benefited relatively. It is recommended to focus on smart sanitary ware, system doors, windows, paint, etc.

3. In addition to the real estate chain, the subdivision circuit recommended pharmaceutical glass leaders Shandong Pharmaceutical Glass (600529.SH), Linot Glass (301188.SZ), Jingjin Equipment (603279.SH), the leader in the filter press industry, and Huawang Technology (), the decorative paper faucet Huawang Technology (), and the vacuum insulation board leader Saite New Material (). 605377.SH 688398.SH

4. The cement sector with a low location and a high dividend rate, such as Conch Cement (600585.SH) and Huaxin Cement (600801.SH).

In October, cement production was 191 million tons, down 4.0% year on year, and the decline was much narrower than in September; glass production was 82.56 million weight boxes, down 1.0% year on year. The decline was also narrower than in September, and production of cyclical building materials during the peak season improved. Infrastructure investment in October increased 5.6% year on year, and the growth rate declined month on month; in October, the new construction, construction, completion, and sales area of real estate were -21.2/-7.4/+13.4/ -20.3% year on year, respectively. The decline in new construction, construction and sales increased, the completion growth rate narrowed, and the overall real estate data for October was sluggish.

Real estate data is generally sluggish. New real estate started/construction/completion/sales in October were -21.2/-7.4/+13.4/ -20.3% year on year, respectively. The decline in new construction, construction and sales increased, the completion growth rate narrowed, and the overall real estate data for October was sluggish. The real estate sales easing policies of the central government and local authorities have yet to be seen. The future remains to be seen. It is expected that urban village renovation will drive demand for building materials. In October, the investment in electric gas water/shipping postage storage/public water conservancy was +25.0/+7.8/ -6.7% year on year, respectively. The growth rate of electric gas and water increased, the growth rate of shipping and postal storage declined, and the decline in public water efficiency increased by 5.6%. Overall infrastructure investment increased by 5.6%, and the growth rate declined.

Cement: The decline in production declined in October, and prices rebounded. In October, the country's cement production was 191 million tons, down 4.0% year on year, and the decline narrowed. Demand for cement improved during the peak season, and prices rebounded, but prices remained at a lower level compared to previous years. In October, the average price of cement clinker/42.5/32.5 cement nationwide was 257.8/321.2/341.7 yuan/ton, respectively, compared to September, +7.4/+13.5/+6.4 yuan. The monthly cement price has improved. Entering November, some northern provinces have entered the winter peak phase one after another, and there is still demand in the southern provinces. Currently, infrastructure investment is difficult to support, and in a situation where real estate continues to be sluggish, the peak season for cement has shown some performance, but it is expected that a steady growth policy will still need to be strengthened in the future, and we look forward to the effects of the trillion-dollar treasury bond implementation.

Glass: Remain cautiously optimistic. Inventory was maintained in October. Currently, the inventory level is still around 40 million heavy boxes. Although production capacity has increased, production and sales in the industry are still good.

On the supply side, the country's flat glass production in October was 82.56 million weight boxes, a year-on-year decrease of 1.0%. Considering that 22Q4-23Q1 has more cold repair production lines, subsequent production will be higher than the same period last year. According to data from Zhuochuang Information, Bank of China Securities estimates that as of November 15, 2023, float glass production capacity has been reduced by a net daily melting volume of 4,620 tons since '22. Since October, the production capacity of the resumed ignition production line has been higher than that of cold repair. Overall prices have been maintained, and profit levels have improved under the price reduction of soda ash. Currently, the overall operating rate of the industry is still high.

On the demand side, as of November 9, the absolute value of inventory reached 40.13 million heavy boxes, corresponding to the number of days of inventory for about 13 days. Looking at the current time, manufacturers' production and sales rates have maintained, and there is some support for removing stocks. Winter storage is approaching. Inventories in North China, Northeast China, and Central China have risen slightly in recent weeks. The spot price trend is still uncertain, and may remain stable in the short term. Since October, the spot price of soda ash has slowly declined to the level of 2,100 yuan per ton, and the maintenance season is over. With the market's expectations of additional supply high, Qinghai's salt load has fluctuated, causing signals on the spot supply side to tighten, and the Soda Ash 01 futures price has risen rapidly. Currently, the main contract base level has narrowed sharply, and the long-term supply increase logic has not changed. There is still a game on the supply side until the new production capacity is fully put into production. The impact on futures prices may be greater than spot prices.

In terms of fuel, according to estimates, as of November 9, 2023, the price differences between soda ash and fuel for the three fuel production lines of natural gas, petroleum coke, and heavy oil have reached 42.0, 65.1, and 36.0 yuan/heavy box respectively. Industry profits have improved slightly, real estate sales are still weak, and the continuity of completion growth remains to be seen. On the one hand, it is difficult to evaluate the incremental sustainability brought about by security buildings, backlog projects, etc., and the year-on-year decline in construction area is still large. On the other hand, although policy support continues to increase, there is a downside risk in the future Weak production and sales have not changed It will still take time for policies to be transmitted, and real estate developers will continue to face cash flow pressure when housing prices and sales are difficult to improve.

In summary, Bank of China Securities still maintains a cautious and optimistic attitude about the glass industry at this stage. The decline in alkali prices has brought about improvements in industry profits, but the future market still faces several major risk factors: 1. Industry supply has now reached a 22-year high, and production capacity has reached a 22-year high. Under increased supply, production may exceed the same period in history; 2. Support for future growth on the completion side is limited. Although real estate policies continue to increase, policy transmission will take time. Whether the actual demand for glass in '24 can be maintained is questionable; 3. Winter storage is approaching. Excluding price increases in 21—22, the accumulation of stocks over the past year Manufacturers tend to reduce prices to remove stocks; 4. Accumulate with soda ash Progressively, spot prices may continue to decline, favoring improvements in glass profits in the short term, but in the medium to long term, cost support collapses. If subsequent demand is lackluster, glass prices may weaken.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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