NEWS CENTER

Building materials industry: policy to warm infrastructure and rural cement demand.


Release time:

Mar 28,2012

First of all, we believe that since the beginning of this year, following the 12th five-year Plan for the large-scale development of the western region and the 4 trillion of water conservancy, the policy side has once again released positive results, boosted the demand for infrastructure and rural cement, and hedged the risk of a slowdown in real estate investment growth. The plan stipulates that the construction of transportation infrastructure should be seriously promoted. We will build a number of major railway projects and start a number of urgently needed projects in due course; promote the national highway network planning project and rural highway construction, and strengthen the transformation of national and provincial trunk lines; implement a number of waterway and land island transportation projects to improve the navigation conditions of the Yangtze River trunk line; start construction, continue construction and complete a number of airport and urban rail transit projects. Further

First of all, we believe that since the beginning of this year, following the 12th five-year Plan for the large-scale development of the western region and the 4 trillion of water conservancy, the policy side has once again released positive results, boosted the demand for infrastructure and rural cement, and hedged the risk of a slowdown in real estate investment growth. The plan stipulates that the construction of transportation infrastructure should be seriously promoted. We will build a number of major railway projects and start a number of urgently needed projects in due course; promote the national highway network planning project and rural highway construction, and strengthen the transformation of national and provincial trunk lines; implement a number of waterway and land island transportation projects to improve the navigation conditions of the Yangtze River trunk line; start construction, continue construction and complete a number of airport and urban rail transit projects. Further accelerate the pace of construction, comprehensively solve the problem of drinking water safety for the 0.298 billion rural population and 114000 rural schools, and increase the proportion of the country's rural population with centralized water supply to about 80%.

Second, the high growth rate of finance and taxation, the decline in capital costs, and the reform of the investment and financing system will provide a strong support environment for infrastructure construction such as railways and rural public facilities. Last year, the national fiscal revenue growth rate was 24.8, and this year it is planned to arrange a fiscal deficit of 800 billion yuan. FR007 has fallen from 5.6 at the end of last year to about 3% at present. The central bank's expectation of 3-5 downgrades in the next 3-5 times has a relatively large potential for bank credit capacity, and the weak demand for credit in real estate and the real economy has also provided room for financing infrastructure projects. Last weekend's speech by Zhang Ping, director of the National Development and Reform Commission, on supporting private capital to enter the infrastructure industry continued to form a positive policy side. The Northeast Revitalization Action Plan further boosted cement demand in the Northeast, especially in the rural market.

Finally, we believe that many macro data show that the global economy has gradually moved away from the brink of collapse, China's economy is also out of the "hard landing" risk zone, monetary easing has become the current trend of global central banks to choose, therefore, the market shock adjustment has the potential to continue to rise. 2 quarter industry strategy point of view is: optimistic about mid-April after the centralized construction of infrastructure and overseas exports pick up, cement, glass fiber and glass price increase time window open, after the completion of the power switch, the market will enter the performance of the second phase of the thickening-driven market. Recommended targets: cement (Yatai Group, Yanlianshan, Yandong Cement), glass fiber (China Glass Fiber, Changhai Shares), glass (Qibin Group, Xiuqiang Glass, Jinjing Technology, Fuyao Glass).