New capacity sword high hanging building materials

2022-06-22
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There is room for the capacity valuation of the building materials industry under the new capacity sword

the overall valuation level of the cement industry is expected to be improved under the stimulation of factors such as capacity control, backward elimination and active acquisition and annexation

the issue of capacity has troubled investors for more than half a year. At present, how to treat overcapacity and investment opportunities is the key investment point of the cement industry in 2010

the sword of new capacity hangs high

from the perspective of investment growth in the cement industry, the growth rate has been more than 50% for two consecutive years, and the annual investment amount has exceeded 100 billion, which is commensurate with the sum of industrial investment in the past five years. According to the normal construction cycle, the year is the year of centralized supply release, and the capacity increase in 2010 is more serious

therefore, the whole industry needs to quietly digest the rapidly increased production capacity in 2010; The annual supply growth rate is between 11% and 16%; From the perspective of time distribution, the pressure is greater in the first half of the year. Depending on the upper limit of the above range, from the perspective of experience, the elimination amount has never been much in the first half of the year, and the pressure will gradually reduce in the second half of the year, approaching the lower limit of the above range; From a regional perspective, the regions with small incremental supply pressure are the regions in the second half of 2009 where we have been exaggerating the Yangtze River Delta, Pearl River Delta, Bohai rim and Northeast China

there is room for improvement in the valuation

reason 1: in terms of the expectation of new capacity, the increment in 2011 will be very small from 2010

since the second half of 2009, the expected variable of the cement industry, the electronic tensile testing machine, is composed of a measuring system, a driving system, a control system, a computer and other structures, plus a new exogenous variable, that is, the government policy. So far, we can clearly read through the government policy: when we look at 2011 through 2010, the increase of the industry supply will be very small

reason 2: backward elimination is another important policy variable for the processor to handle this signal after the promotion expectation

"completely eliminate 500million tons of backward production capacity in three years, close to 30%" - this is an administrative task. No matter how the market has no determination and belief in eliminating backward production capacity, it can be expected to eliminate it within the administrative order. If 500million tons are completely eliminated in three years, the supply pressure can be reduced by about 10% every year. In addition, in 2011, the industry will face a process of continuous reduction of overall production capacity

reason 3: Merger and reorganization will be more active, and the concentration is expected to increase rapidly

merger and reorganization is a story that the cement industry has been looking forward to. However, in the past, the actual investment logic of cement stocks was basically driven by the expected changes in prices caused by the relationship between supply and demand. In 2010, the expected investment opportunities brought by merger and reorganization will be greater than ever before

under the background of blocked new construction, the road of enterprise expansion will gradually transition from new construction to annexation and reorganization. Moreover, annexation and reorganization also conform to the national policy direction, and the industry concentration may further improve with 2010 as the turning point. With the progress of industry concentration, under the logic that the relationship between supply and demand ultimately determines the trend of prosperity, the stability of industry profits will be further enhanced and the periodicity will be weakened. The upward trend of demand further determines that

real estate has become a significant increment in the logic of cement demand in 2010. The speed of real estate sales is faster than the data of new construction. The demand of real estate developers to replenish inventory at least ensures that the new construction area will maintain a growth trend from the fourth quarter of 2009 to the first half of 2010, and the demand for cement will grow according to the monthly lag period

the marginal increment of new infrastructure projects is decreasing. On the one hand, with the implementation of the 4trillion stimulus plan, the fund expectation for stimulus is decreasing; On the other hand, with the gradual improvement of the economy, the withdrawal of the stimulus plan will also be expected in 2010. Therefore, we do not place high expectations on the marginal increment of infrastructure

however, what needs to be exaggerated is that the amount of cement used in infrastructure projects will still be reflected in a certain increment in 2010. The actual cement consumption stage of key projects newly started due to the 4trillion policy should be in the second half of 2009 and later. At the initial stage of new construction, cement is not required because of planning, argumentation, relocation and other reasons. Considering the main railway The construction period of highway and other projects is generally more than two years, that is, in 2010, the sustainability of the project construction will also be reflected in a certain increase in cement demand

it is difficult to guess the demand. Due to its high sensitivity to the macro economy, we still use the traditional method of guessing. According to the prediction of the macro Department of the State Council of the people's Republic of China on the growth rate of fixed asset investment next year of 23%, we give 2010 "cement growth rate/fixed asset investment growth rate" 0. Advanced aluminum lithium alloy components have accounted for 20% of the total aircraft materials; Boeing 787 and eh101 multi-purpose helicopters also use a large number of aluminum lithium alloys. 6, the growth rate of cement demand in the whole industry in 2010 was 11. 5%-13。 8%。

therefore, the supply and demand boom in 2010 may be in a weak balance. Especially when the variable of backward elimination will not change beyond expectations, the first half of the year will bear greater pressure on capacity investment, that is, it is necessary to quietly digest the capacity released in a centralized way. However, in the second half of the year, especially in the fourth quarter, the industry supply pressure will continue to decrease, and the boom will be clearer than that in the first half of the year without major changes in demand

grasp the opportunity of valuation promotion

in 2010, especially in the first half of the year, there was great pressure on production capacity - this expectation has been fully reflected in the valuation of cement stocks in 2009. The performance growth is very certain, but the cement industry is bearing a significant valuation discount

with the continuous digestion of production capacity in 2010, the pressure on supply will gradually decrease, and it can be clearly expected that there will be little increase in the supply side in 2011. The valuation will certainly reflect the expectation that the supply growth rate will decrease and be promoted

moreover, once the "three-year elimination of 30% policy" is implemented and promulgated, the supply side of the cement industry will not be as large as people think in 2010, and it is estimated that the repair speed may be faster (it needs to be observed after the introduction of the policy rules. If the policy is serious enough, the repair speed will be earlier)

in addition, merger and reorganization will certainly bring new investment opportunities, and the merger and reorganization flow in 2010 will be more frequent and market-oriented than before. As the way of expanding development through new production capacity has been blocked by national policies, Just think: "the equity of conch group, the best cement enterprise in China, has been reported by the media that it may be sold in the process of merger and reorganization (the company has refuted the rumor at the end of September 2009). Is there any merger and acquisition that other enterprises cannot do?" We suggest investors to focus on the investment opportunities of individual stocks brought by acquisition and merger with us in 2010

the acquisition and annexation not only brings opportunities for individual stocks, but also makes rapid progress in the industry concentration. In the future, there will be more areas with good competition format like Xinjiang, Ningxia, Bohai rim, Heiji and other industries, and the stability of industry profits will be improved in the future

regional differences are the strategic focus of the cement industry, and it is also an important task of our strategy to select the most advantageous regions every year. Through the previous fundamental analysis, we believe that the regions with better fundamentals of the cement industry in 2010 are mainly concentrated in the East

the relatively small supply pressure in the eastern region, the relatively high elasticity of real estate demand and the deterministic growth of cement demand in the future brought about by the first recovery of real estate are the core logic that we are optimistic about the eastern region. We believe that in 2010, the eastern region will continue the general trend of supply and demand improvement since September 2009, and the industry outlook will continue to rise (of course, the off-season will show the characteristics of seasonal changes)

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