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港股概念追踪 | 4月基建投资延续高增 中特估、国改及一带一路催化下基建板块或可迎来价值重估(附概念股)

Hong Kong Stock Concept Tracking | Continued High Growth in Infrastructure Investment in April, and the Infrastructure Sector May Usher in Valuation Under National Reform and the Catalyzed Belt and Road Initiative (with concept stocks)

Zhitong Finance ·  May 19, 2023 08:29

The Zhitong Finance App learned that on May 16, the National Bureau of Statistics released fixed asset investment data for January-April 2023. In the tertiary sector, infrastructure investment (excluding electricity, heat, gas and water production and supply industries) increased 8.5% year-on-year. Affected by this news, Hong Kong stock infrastructure stocks had the highest gains on May 17. By the close of the day, China Railway (00390) rose 4.69% to HK$5.58; China Communications and Construction (01800) rose 3.37% to HK$4.91; China Railway Construction (01186) rose 2.76% to HK$6.33; and China Metallurgical (01618) rose 0.96% to HK$2.1.Guoxin Securities said that the growth rate of infrastructure investment in January-April 2023 was relatively steady. In the short term, the growth rate of infrastructure investment is under pressure. As comprehensive urban development continues to develop, demand for infrastructure construction is broad, and in the long run, the growth rate of infrastructure investment is still sustainable.

Infrastructure investment continued to soar in April

Specifically, from January to April 2023, the country's fixed asset investment (excluding rural households) completed 14.7 trillion yuan, an increase of 4.7% over the previous year, and the growth rate narrowed by 0.4 pct. In terms of infrastructure investment, infrastructure investment (excluding electricity, heat, gas and water production and supply industries) increased 8.5% year-on-year. Among them, investment in the water management industry increased by 10.7% (+0.4pct), investment in the public facility management industry increased by 4.7% (-3.0pct), investment in the road transport industry increased by 5.8% (-2.7pct), and investment in the railway transportation industry increased by 14% (-3.6pct).

In terms of infrastructure investment, experts said that infrastructure investment continued to rise sharply in April. Judging from the financial data since the beginning of the year, medium- and long-term corporate loans have continued to increase sharply year-on-year, the issuance of special bonds continues to advance this year, and the construction of projects in various regions, there is currently no shortage of capital or projects for infrastructure investment.

“What is behind this is that the endogenous growth momentum of the economy represented by consumer consumption and private investment has yet to be further strengthened. In addition, there is a need for a slowing trend. In particular, real estate investment will continue its negative year-on-year growth trend. Currently, infrastructure investment centered on major project construction still needs to maintain a high level of growth.” Experts say that this is one of the main driving forces driving a continuous upward economic recovery at this stage, and it is also a direct reflection of the continuing steady growth direction of macroeconomic policies.

The new special debt is mainly invested in infrastructure

According to public data, local bonds have been issued 2.7 trillion yuan since this year, of which 1621.6 billion yuan of special bonds have been issued. Considering that some special bonds supporting the development of small and medium-sized banks have not yet been issued and used, it is estimated that more than 2.4 trillion yuan of additional special bonds will be issued throughout the year. An additional 1621.6 billion yuan of special bonds were issued this year, of which 98.1 billion yuan was invested in the infrastructure sector, accounting for 60.5%.

Feng Lin, senior analyst at Dongfang Jincheng Research and Development Department, said that issuing special bonds has become an important way for local governments to obtain capital and support the acceleration of infrastructure investment. Infrastructure investment increased 8.8% year-on-year in the first quarter of this year, and the growth rate was only 0.6 percentage points slower than the full year of last year. It is expected that, driven by policy instruments such as special debt funds, infrastructure investment will maintain a relatively rapid growth level of around 6% throughout the year.

“China Special Valuation+Belt and Road” boosts large infrastructure sector

Benefiting from the catalysis of “state-owned enterprise reform” and “Sino-Singapore valuation” policies, combined with the effects of the “Belt and Road” 10th anniversary summit, “Chinese leading” stocks have risen markedly since this year, and infrastructure investment has also attracted much attention. As an important tool for countercyclical economic regulation, infrastructure will continue to play an important role in the “steady growth” of the economy this year.

Huang Zhi of CITIC Prudential Fund believes that the rise in the infrastructure sector since this year has been mainly catalyzed by two main lines. One is the “China Special Assessment” proposal and the expectation that the quality of operation of state-owned enterprises will improve, and the other is the “Belt and Road” overseas.

This year marks the 10th anniversary of the “Belt and Road” initiative. Since the beginning of the year, China has carried out diplomatic activities with many countries including Iran, Saudi Arabia, Russia, and France, and the “Belt and Road” construction is expected to accelerate. As the revaluation of central enterprises resonates with the “Belt and Road”, central enterprises in infrastructure, construction machinery and other fields have both catalyzed policies and improved fundamentals. It is recommended that attention be paid to the growth elasticity and sustainability of the performance of central state-owned construction enterprises and international projects related to the “Belt and Road”.

Earlier, the CITIC Construction Investment Research Report stated that steady growth in domestic infrastructure is still the main line of macroeconomic policy, and there is broad scope for urban, transportation, and clean energy construction. Global demand for infrastructure is strong, and China's infrastructure's strong competitive advantage and new types of diplomatic relationships have boosted China's infrastructure to go overseas. CaiTong Securities, on the other hand, released a research report saying that in the context of the “Belt and Road” and the reform of state-owned enterprises, it is expected that the trend of infrastructure construction and central state-owned enterprise operation restoration and value revaluation will continue.

Related concept stocks:

China Communications Construction (01800): The main business of China Communications Construction Corporation is engaged in infrastructure construction, infrastructure planning, dredging and port machinery manufacturing. Recently, the subsidiary company won bids for important projects such as cross-river bridges, shipping hub projects, locks, and waterways in the Pinglu Canal. The total amount won was about 19.021 billion yuan, accounting for about 2.91% of the company's 2021 audited revenue under China Accounting Standards.

China Railway (00390): With infrastructure construction business as its core (infrastructure business revenue accounts for more than 85%), China Railway integrates surveying and design, construction and installation, industrial manufacturing, real estate development, resources and minerals, financial investment, etc., and is one of the world's largest multi-purpose integrated construction groups. Recently, the company won bids for 16 major projects, with a total bid price of about RMB 42.89 billion, accounting for about 4.01% of the company's revenue in 2021 under China Accounting Standards.

China Railway Construction (01186): China Railway Construction's major domestic and foreign orders have continued. First, it was announced on January 18 that the company had recently won bids for a number of major projects, with a total amount of 103.295 billion yuan; later, on February 17, 2023, China Railway Construction also announced that it had won the bid for Hainan's first offshore wind power project, with a contract amount of 2,089 billion yuan.

China Aluminum International (02068): The company is mainly engaged in engineering design and consulting, engineering and construction contracting, equipment manufacturing and trade. Among them, the engineering and construction contracting business covers the metallurgical industry, housing construction, highways, building materials, electricity, water conservancy, chemicals, mines, municipal utilities, steel structures and other fields.

China Construction International (03311): The company's main business includes construction business, project supervision services, thermal power business, infrastructure project investment, and operation of toll road and exterior engineering services. According to Guotai Junan's review, the annual size of the Hong Kong construction market is expected to reach HK$300 billion by 2025, the company's overall gross margin will gradually increase, and it will lead a new round of technological innovation in the construction engineering industry, and valuations will increase dramatically.

The translation is provided by third-party software.


The above content is for informational or educational purposes only and does not constitute any investment advice related to Futu. Although we strive to ensure the truthfulness, accuracy, and originality of all such content, we cannot guarantee it.
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