Data show that as of last week, the national resumption rate was 76.5%, which has exceeded the same period last year, in which the resumption of infrastructure, municipal projects and labor services have improved significantly; the real estate market has also begun to recover marginally recently.
In early trading on February 20, the major infrastructure industry chain, including construction machinery, building materials cement, home decoration and construction, led the two cities up.
In terms of construction machinery, A-share Tuoshan heavy Industry and Zhenhua heavy Industry rose by the daily limit, while Xugong Machinery, Sany heavy Industry and Anhui Heli rose sharply. It is worth mentioning that among them, 100 billion leading Sany heavy Industries has soared in recent days, with its share price rising nearly 18% in six trading days and rebounding by more than 35% since its relative low at the end of October last year.
Hong Kong stocks China Resources cement Holdings rose more than 7%, Anhui Conch Cement and China National Building Material rose about 5%, Chinalco International rose 10%, China Rallway and China Communications Construction rose more than 4%, and Sinotruk rose more than 8%.
On the news side, the pace of resumption of work in many places across the country has accelerated sharply in recent days, and provinces have accelerated the start of infrastructure projects. Guosheng Securities said that infrastructure construction is expected to get off to a good start in the first quarter. In addition, recently, real estate has also begun to appear marginal recovery, jointly pulling downstream related subdivision demand.
The pace of resuming work has been greatly accelerated, and the infrastructure construction is expected to get off to a good start.
According to industry media data, as of last week, the national resumption rate was 76.5%, which has exceeded the same period last year, including the resumption of infrastructure, municipal projects and labor services have been greatly improved. On the 17th of January, the resumption rate of the project was still lower than 12.6% in the same period last year, the one-week resumption rate increased by 38.1%, and the rate of resumption of work increased significantly.
In addition, the amount of medium-and long-term loans issued by enterprises in the first quarter was guaranteed: in January, the amount of social finance increased by 5.98 trillion, exceeding market expectations; and RMB loans increased by 4.9 trillion, the highest in one month since statistics began in 2001, and an increase of 922.7 billion over the same period last year. In addition, 31 provinces and cities have been approved in advance of the special debt quota of 2.19 trillion (60% of the new special bond issuance in 2022), an increase of 50%.
Guosheng Securities said that credit increased sharply in January, special bond issuance remained high, capital for infrastructure was guaranteed, the pace of superimposed resumption of work accelerated sharply, and infrastructure construction was expected to get off to a good start in the first quarter.
Societe Generale Securities also believes that this year, from top to bottom, we are determined to stabilize the economy and investment, the stable growth of infrastructure is prominent, and relevant policies, funds, and project support are constantly promoting and expanding capacity. driven by various factors, infrastructure investment in 2023 is expected to continue to grow at a high rate with top-down support, and the formation of physical workload is expected to accelerate.
Accelerated recovery of construction machinery industry
Pacific Securities believes that in the context of the continuous landing of infrastructure projects and marginal improvement in real estate, it will strongly boost the demand for construction machinery in 2023.
Infrastructure has already been mentioned above, and in fact, the real estate market has begun to recover marginally recently.
According to the Carey Research Center, second-hand housing transactions in 11 key cities across the country increased by 29% compared with the Spring Festival last year. Data released by the National Bureau of Statistics showed that among the 70 large and medium-sized cities in January, the sales prices of new commercial housing and second-hand housing rose month-on-month in 36 and 13 respectively, an increase of 21 and 6 respectively over the previous month. The sales price of commercial housing in first-tier cities rose month-on-month, while the decline in second-and third-tier cities slowed down.
According to data from KE Holdings Inc. Research Institute, the average daily number of customers and newly listed houses in KE Holdings Inc. 50 cities one week after the Spring Festival are more than double the daily average before the Spring Festival in January.
In the first two weeks of February, turnover at Lianjia stores increased by 50 per cent, 60 per cent, and 30 per cent, respectively, according to Shanghai-based Lianjia. Media reports said, "after three years of the epidemic, it only took a week for it to come back." Many real estate agents in Shanghai have been spreading this phrase on social networking platforms these days.
Zheshang Securities said that construction machinery is China's current advantage industry, Chinese companies can rely on economies of scale, industrial chain advantages, operational efficiency advantages to achieve a leading position in the world. China's leader, represented by domestic Sany heavy Industry, is expected to become a global leader in the future.
According to its introduction, from the perspective of valuation, domestic leading enterprises are far from international leading companies. For example, Sany's market capitalization is 18% of Caterpillar Inc's, but its income has reached 33% of Caterpillar Inc's 2021 income (325 billion yuan). Sany's current PB is 2.54 times lower than that of Caterpillar Inc (Caterpillar Inc's current PB is 8.06 times) and is at an all-time low.
Zheshang Securities believes that with the performance of domestic construction machinery leading enterprises gradually turning point upward, performance upward flexibility, large space, the future growth will be better than Caterpillar Inc.
Cement prices have been raised in many parts of the country.
Against the backdrop of a promising start to infrastructure construction in the first quarter, cement market demand has improved, and recently, many places across the country have begun to raise cement prices.
According to data from China cement Network, from February 10 to 12, leading enterprises in Jiangxi Province have notified to raise cement prices by 20 yuan / ton.
From February 11 to 13, some enterprises in many places in Anhui have notified to raise cement prices by about 10 yuan to 15 yuan per ton, and individual low-bid prices by 30 yuan per ton.
Since February 14, some major manufacturers in Shanghai have announced that the prices of various kinds of bulk cement have been raised by 30 yuan per ton, and the bagged prices have been temporarily stable; cement prices in Guangdong's Pearl River Delta, western and northern Guangdong have also been notified to rise one after another.
According to the analysis of industry insiders, for the recent increase in cement prices, on the one hand, driven by the resumption of work at downstream construction sites, cement demand continues to recover. On the other hand, the cost of thermal coal is high, and the manufacturers are willing to increase the price under the cost pressure. In addition, at present, many manufacturers are in the state of kiln shutdown, the output is reduced and the demand is increasing.
Huatai said that in terms of agricultural calendar years, the timing of this round of increase is earlier than in previous years, considering that the current recovery of downstream demand is not significant and the overall inventory of the cement industry is still high. This round of earlier price increases reflects a strong consensus in the industry to repair the deteriorating profitability since last year as soon as possible.
It believes that the sustainability of the industry profit repair will still be tested by the stabilization of demand and the implementation of off-peak production, but considering the firm determination of the government to stabilize growth and the low valuation of the industry, the performance and price of the sector allocation is relatively high.
Edit / phoebe