Zhitong Finance and Economics learned that Galaxy ** released a research report saying that as of February 26, the dynamic PE PB of the construction index was 889/0.75 times, with an all-time quantile of 9 over the past 10 years41%/2.06%, the valuation of the construction industry is at a historically low level. In the first half of the year, the recovery of consumption was tortuous, the real estate industry had a long destocking cycle, and the tone of steady growth basically continued. At present, high dividends** have attracted market attention, and the higher dividend yield of construction enterprises is mainly for the construction central state-owned enterprises, and the bank believes that "steady growth" and "high dividend yield" will revalue the construction central state-owned enterprises.
Recommended: China Railway Construction (601186).SH), China Architecture (601668SH), China Railway (601390SH), China Communications Construction Co., Ltd. (601800SH), PowerChina (601669SH), China Energy Construction (601868.)SH), China Metallurgical Corporation (601618SH), China Chemical (601117.)sh) and so on. It is recommended to pay attention to Shandong Road and Bridge (000498SZ), Anhui Construction Engineering (600502SH), Shanghai Construction Engineering Co., Ltd. (600170.)SH), General Design Institute (603357sh) and so on.
The view of the galaxy ** is as follows:
The prosperity of the construction industry has declined, and the resumption of work after the holiday needs to be accelerated.
In January, the index of business activity in the construction sector was 539%, down 3 from the previous month0pct;The new orders index for the construction sector was 467%, down 39pct;The construction inputs** index was 52%, up 0. from the previous month6pct;The construction sales** index was 504%, down 13pct;The construction employment index was 501%, down 16pct;The construction business activity expectation index was 619%, down 3 from the previous month8pct。The prosperity of the construction industry has declined. According to the statistics of the Centennial Construction Network, from February 14th to 20th, the resumption rate of 10,094 construction sites across the country was 130%, a year-on-year increase of 2pct in the lunar calendar; The labor rate was 155%, an increase of 08pct。Affected by cooling and rainy weather, the resumption of work after the holiday needs to be accelerated. Since most of the resumption time is concentrated after the Lantern Festival on the 15th day of the first lunar month, it is recommended to pay further attention to the resumption of work in the following weeks.
The five-year LPR was lowered by 25BP, and more than 36 billion yuan of special loans were obtained for the transformation of urban villages.
On February 20, the five-year LPR was changed from 420% to 395%, a large decrease. Since the LPR with a term of more than five years is linked to the interest rate of residential mortgages, the decline in interest rates can reduce the interest rate of existing housing loans, effectively reduce the cost of housing purchases of residents, boost residents' willingness to consume housing, and help the real estate market to further recover. As of February 20, the China Development Bank (CDB) had issued more than 36 billion yuan in special loans for the renovation of urban villages, involving 223 projects in 32 cities including Beijing, Shanghai and Guangzhou, benefiting 260,000 urban village residents and supporting the construction of 540,000 resettlement houses. With financial support, the progress of the "three major projects" will be accelerated.
The market value management assessment has been accelerated, and the construction central enterprises are expected to benefit.
In recent years, the State-owned Assets Supervision and Administration Commission (SASAC) has explored and established a system of operating indicators for central enterprises, and has continuously adjusted the assessment indicators. The proposal to include market value management in the assessment of the person in charge of central enterprises can guide the listed companies of central enterprises to convey confidence and stabilize expectations through market-oriented shareholding and repurchase in a timely manner, increase cash dividends, and better return investors. Recently, a number of listed companies controlled by central enterprises such as PetroChina have said that the new assessment requirements are speeding up. China State Construction was included in the market value management assessment pilot by the State-owned Assets Supervision and Administration Commission last year, and this year it will be fully launched, and the value of central enterprises is expected to be revalued.
2023 annual performance forecast: engineering consulting and professional engineering sectors performed well.
As of February 26, a total of 86 listed companies in the construction industry have announced their 2023 performance forecasts, among which Jianghe Group in the decoration sector, China Haicheng in the professional engineering sector, Yaxiang Integration, Huayang International in the engineering consulting services sector, and China Industrial International in the international engineering sector have achieved performance growth; In the professional engineering sector, Roman shares and Taiji Industry have turned losses into profits.
"Steady growth" and "high dividend yield" will revalue the construction central state-owned enterprises.
As of February 26, the dynamic PE PB of the construction index was 889/0.75 times, with an all-time quantile of 9 over the past 10 years41%/2.06%, the valuation of the construction industry is at a historically low level. In the first half of the year, the recovery of consumption was tortuous, the real estate industry had a long destocking cycle, and the tone of steady growth basically continued. At present, high dividends** have attracted market attention, and the higher dividend yields of construction enterprises are mainly construction central state-owned enterprises, including Sichuan Road and Bridge, Tunnel Co., Ltd., Anhui Construction Engineering, General Design Institute, etc., with dividend yields of more than 5%, and China State Construction, Zhongheng Design, Huashe Group, Sinosteel International, Pudong Construction, China Railway Construction, Zhejiang Jiaotong Technology, China Railway, etc.
Risk Warning:the risk of decline in fixed asset investment; Accounts receivable** decline risk.