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广发证券建材业24年策略:需求筑底 关注“三大工程”建设和供给侧变化

Guangfa Securities's 24-year strategy for the building materials industry: solid demand, focusing on the construction of the “three major projects” and supply-side changes

Zhitong Finance ·  11/28/2023 10:11

The fundamentals of the traditional building materials industry are strongly correlated with the downstream real estate boom. The commercial housing market is expected in 2024.

The Zhitong Finance App learned that according to a research report released by Guangfa Securities, the fundamentals of the traditional building materials industry are strongly correlated with the downstream real estate boom. It is expected that in 2024, the commercial housing market: sales prosperity is expected to improve, new construction is expected to complete completion, and there is some pressure on completion; construction of the “three major projects” is expected to accelerate, which is conducive to stable real estate investment and stable sales. Cement: Prices, profits, and valuations are at the bottom, and the industry is segmented. Consumer building materials: Real estate is expected to gradually complete bottoming out in 2024, and the profits of leading companies will continue to recover resilient. Glass fiber/carbon composites: At the bottom of the cycle, focus on positive changes on the supply side. Glass: Costs are falling, focusing on supply-side opportunities beyond demand.

The views of GF Securities are as follows:

Cement: price, profit and valuation are at the bottom, and the industry is segmented

(1) Demand: Demand for cement is expected to continue to solidify in 2024, with narrow fluctuations over the previous year, and stabilized in the medium term during the new platform period; (2) Supply: false peak efficiency is declining, a new balance is still being built, focusing on the “de-capacity” process; (3) Profit: cement prices and profits in the second half of 2023 are at the bottom, and there is little room for continued decline in 2024; the industry is divided within the industry, and the bottom profit of core companies is better than that of peers; currently, industry valuations are at the bottom of history.

Consumer building materials: Real estate is expected to gradually complete bottoming out in 2024, and the profits of leading companies will continue to recover resilient

(1) Determining the demand boom: New construction in 2024 is expected to take the lead in bottoming out, and the implementation of the new waterproofing regulations is accelerated, which is beneficial to the newly started types of waterproofing; there is some uncertainty at the completion end, which depends on the recovery of sales boom; as demand for refurbishment of existing houses increases, long-term demand stability for consumer building materials is better. (2) The clear supply pattern has been optimized, leading companies have shown strong α, and the medium- to long-term growth logic remains unchanged. It is expected that industry concentration will continue to increase in 2024. (3) If overall demand is weak in 2024, raw materials are expected to remain low in 2024. This will continue to guarantee the profits of leading companies, and the profits of leading core companies will continue to recover resilient in 2024.

Glass fiber/carbon composites: bottom of the cycle, focus on positive changes on the supply side

(1) Glass fiber: The boom is already in the bottom zone. The net profit of leading tons in Q3 in 2023 has broken through the low point of the previous cycle, and second- and third-tier companies have reached a loss state. In 2024, the focus will be on supply clearance and the actual implementation of additional production capacity. Electronic yarn will advance in prosperity before thick yarn. (2) Carbon-based composites: 23Q3 profits may have bottomed out. In 2024, focus on the progress of platformization of leading enterprises. Costs are expected to continue to improve, and leaders will continue to lead in profit. Currently, the valuation of glass fiber is at the bottom, and the valuation of carbon-based composites is already cheaper.

Glass: falling costs, focusing on supply-side opportunities beyond demand

(1) Float glass: Real estate completion is under pressure, focusing on phased opportunities after voluntary supply-side adjustments. (2) Photovoltaic glass: It is expected that the new installed capacity of global photovoltaics will grow in resilience in 2024, and demand for photovoltaic glass will increase steadily; the industry supply growth rate will slow down from the second half of 2023, focusing on marginal supply-side tightening in 2024. (3) Pharmaceutical glass: The trend of the borosilicate glass industry has become a reality, and leaders continue to benefit from structural upgrades.

Risk warning: risk of continued macroeconomic downturn, risk of large fluctuations in monetary and real estate policies, risk of new industry production capacity exceeding expectations, risk of raw material costs rising too fast, etc.

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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