Zhì tōng cáijīng APP learned that Guosen Securities released research reports stating that the real estate pressure is still affecting the market and the building materials sector is still in a slow recovery phase at the bottom. With further risk release, the bottom continues to be consolidated, and high-quality enterprises continue to lead, demonstrating strong operational resilience and further improving operational quality. With the expansion and optimization of channel transformation, product categories, and regional layout, competitive advantages are expected to continue to be prominent, and supply clearance will also bring further optimization to the pattern, and the concentration of long-term benefits will continue to increase.
Recently, real estate policies have continued to be implemented, and market sentiment has slightly improved. The current fundamentals and valuations are relatively low. This round of real estate policies has a firm attitude, and subsequent supporting policies are expected to be added. We will continue to focus on the investment opportunities of high-quality building materials leading stocks and some oversold stocks under the expectation of policy repair. We recommend Guangdong Kinlong Hardware Products (002791.SZ) and other stocks. At the same time, in the cyclical building materials sector, attention should be paid to leading targets with expected bottom-line profitability improvement, such as Huaxin Cement (600801.SH). In other subdivisions, attention is paid to leading companies in the professional lighting field such as Ocean's King Lighting Science & Technology (002724.SZ) and leading steel manufacturers Honglu Steel Construction (002541.SZ).
Guosen Securities' main points are as follows:
Real estate policies continue to be released, and the effects are still to be seen. Market sentiment has slightly improved.
On June 25th, the Monetary Policy Committee of the People's Bank of China held the second quarter meeting of 2024, pointing out that it is necessary to fully understand the new changes in the supply and demand relationship of the real estate market, respond to the new expectations of the people for high-quality housing, and focus on promoting the financial policies that have been implemented. Measures will take effect and promote the stable and healthy development of the real estate market. Increase financial support for the “market + guarantee” housing supply system and promote the accelerated construction of a new model of real estate development.
On June 26, the Beijing Municipal Commission of Housing and Urban-Rural Development and other departments issued a joint notice to introduce a series of real estate control measures. The lowest first-time property buyer's down payment ratio after adjustment is 20%, and the lower limit of the first-time property commercial loan interest rate is LPR minus 45 basis points, currently 3.5%. For the second housing, the minimum first-time payment ratio within the fifth ring road is 35%, and the minimum loan interest rate is LPR minus 5 basis points. Outside the fifth ring road, the minimum first-time payment ratio is 30%, and the minimum loan interest rate is LPR minus 25 basis points.
Tracking data of key sectors: Cement prices have turned from rise to fall, flat glass prices have dropped significantly, and coarse yarn prices have stabilized.
1) Cement: This week, the average price of P.O42.5 high-standard cement in China was 390.5 yuan/ton, down 0.59% from the previous week and up 2.09% year-on-year. The inventory-to-capacity ratio was 66.4%, up 2.6 points month-on-month and down 11.9 points year-on-year. At the end of June, affected by traditional off-season factors and localized heavy rainfall, the demand for the domestic cement market declined significantly. The average shipment rate of key cement companies in China's key regions decreased by 2 percentage points month-on-month. In terms of prices, only cement companies in Guangdong raised prices to increase profits this week, while Shanghai, Jiangsu, Anhui, Fujian, and Jiangxi were affected by widespread heavy rainfall and saw an increase in inventory, resulting in a decline in prices.
2) Glass: The supply and demand contradiction in the flat glass market is obvious, and prices continue to decline. This week, the average market price of glass spot was 1658.99 yuan/ton, down 1.7% from the previous week. The inventory of key provinces was 54.79 million weight boxes, up 3.28% from the previous month. The overall trading of photovoltaic glass was not satisfactory, and the inventory increased slowly. This week, the mainstream order price of 2.0mm coated panels was 15.5-16 yuan/square meter, unchanged from the previous week, and the mainstream order price of 3.2mm coated panels was 24.5 yuan/square meter, unchanged from the previous week. The inventory turnover days were about 29.39 days, up 1.72% from the previous month.
3) Fiberglass: The price of alkali-free coarse yarn in the market is running relatively stable, and the downstream is picking up slightly, still in the destocking stage in the short term, and the medium and long-term prices may be under pressure. This week, the mainstream quotation for 2400tex alkali-free wrapped direct yarn in China was between 3800-4000 yuan/ton, with an average national price of 3844.25 yuan/ton, unchanged from the previous week; the electronic yarn was temporarily stable for shipment, and the medium and long-term prices are still expected to rise. This week, the mainstream quotation for electronic yarn G75 was 8800-9300 yuan/ton, unchanged from the previous week, and the price of electronic cloth was 3.8-4.0 yuan/meter, unchanged from the previous week.
Risk warning:
Policy implementation is lower than expected; cost increases are higher than expected; supply exceeds expectations.