Infrastructure Stocks Soared B Side: The Construction Market Has Not Yet Started To Recover Less Than 3 Of Cement Shipments.

"The resumption of work is resumed. Only the project leader has arrived. Where did the construction workers arrive? A cement industry personage in East China said in March 4th.

Sales data from terminals can provide evidence. According to the feedback of Zhuo Chuang's information on the same day, the current shipments of cement enterprises have only recovered to 1 to 3 before the festival, far below the level of 6 to 7 in the same period of the previous year.

However, with the almost constant increase in infrastructure overweight and the investment of tens of billions of governments at all levels, the infrastructure which has been neglected for a long time has become a hot market.

Since the development of the epidemic has stabilized in February 26th, infrastructure related sectors began to lead the Shanghai and Shenzhen two cities. According to statistics, as of the closing of March 4th, building decoration, building materials and real estate plates rose by 10.52%, 7.7% and 5.88% respectively, taking the top three of the list of industries in the Shen Yi class.

However, in the background that the downstream construction industry has not yet been launched in large scale and the demand is hard to turn into an enterprise profit, everything is only limited to the speculation of the two level market and the expectation for the future.

"The market has not yet started."

Put aside the local government to give enterprises above Designated Size frequently 80%, 90% of the rate of return does not say that the current downstream construction enterprises actual recovery rate is not as high as the outside world imagination. Take the apple orchard transport hub in Beijing, Chen Kexin, chief analyst of the Lange Iron and steel Economic Research Center, said on the 4 day, "the surface works have not yet started."

In February this year, Lange Iron and steel has two times to North China 900 construction enterprises resume work investigation.

The survey results of central enterprises, provincial and municipal state-owned enterprises and private enterprises show that by the end of February, only 6.4% of the redevelopment enterprises accounted for the region, up 1.4 percentage points from the middle of February.

For the future resumption node, 7.8% of construction enterprises expect to resume work in early March, and 13.4% of enterprises expect to resume work in mid March.

Another 62.1% of the construction enterprises failed to give clear return to work nodes. The reasons for their failure were mainly that they did not get re employment approval, workers were not on duty, or workers were on duty but were isolated.

Inventory data can provide evidence. Similarly, the inspection data from the agency showed that by the end of February, the social inventory of building materials in 29 key cities included in statistics was 15 million 32 thousand tons, an increase of 8 million 13 thousand tons compared with the pre holiday period, an increase of 114.2%, an increase of 29.9% over the same period last year.

Cement, as a building material product with close to 100% production and sales volume, can also reflect the start up of construction work from the microscopic level.

From the production and marketing situation of Zhuo Chuang's information feedback, it is basically consistent with the above findings.

"At present, the demand for cement in East China, Southwest China and Southern China has recovered better, and the shipment volume of some cement enterprises in Yunnan, Guizhou and Guangxi has been restored to five or six, but mainly in bagged cement, and the demand is mainly concentrated in civilian areas, not on key projects and municipal works." Zhuo Chuang information cement industry analyst Hou Linlin 4 introduced.

She pointed out that the volume of cement shipments in eastern China is currently recovering to 2 to 3, but it also focuses on large cement enterprises supplying key projects, and the demand from real estate and social consumption is negligible.

Just because of the factors such as peak production, enterprise shutdown, and high cement production and sales rate, inventory growth is not as prominent as steel and building materials.

In Hou Linlin's view, the current volume of less than 3 of cement enterprises is only at the level of fifteen before the first month of the previous year, "the market has not yet started."

A Sichuan housing company with more than ten construction sites, 4, said that the construction of the company has not yet been fully launched. Only part of the head housing enterprises in the region are trying to recover the progress of construction in one or two months in order to achieve the pre-sale conditions. The pace of resuming work is relatively fast, and the progress of the other small and medium scale housing enterprises is much slower.

Sector wheel superposition is expected to hype.

Although the proportion of construction resumption is not high, it also means that there will be great room for improvement in the future, plus tens of trillions of investment projects recently flooded with screens.

Take the building decoration industry as an example, from February 26th to March 4th, the main municipal Luqiao and rail transit construction has also gained 21.81%.

The reason for this is more from the two level market factors.

First is the need for plate rotation. Since the beginning of the year, technology stocks have risen rapidly, and the average increase in semiconductor sector has reached 53%.

So before February 25th, the electronic, computer and communication sectors began to fall down, and the lower priced building materials and building blocks rose at the same time.

Secondly, after the stock price rises, professional institutions begin to look for reasons, and finally boil down to the investment plan of local governments with a scale of tens trillion yuan.

In fact, the local government announces a number of major investment projects every year, but some of the projects are 5 to 10 years long. There are strong uncertainties in the actual landing projects and investments.

The reasons for the rise of the building materials sector are more likely to be related to potential expectations, that is, the impact of the epidemic on economic growth through capital building overweight, and almost identical expectations have been formed in this capital market.

"Logical relationship is that last year's trade friction and outbreak this year, and if the epidemic outside Shanghai is not effectively controlled, the export demand environment will also weaken, which will bring some pressure to economic growth." Chen Kexin said.

Under the above background, it is necessary to achieve the rebalance of aggregate demand through expanding domestic demand. From the two levels of investment and consumption, the elastic demand of consumption in the first half of the year, especially tourism, aviation and service industries is obviously suppressed by the epidemic situation, so it can only choose investment stimulating demand.

In Chen Kexin's view, the most effective and direct investment demand is the infrastructure, including the livelihood of the people. There is still much room for improvement. "Of course, the premise needs to be established in April. The epidemic will end in general. If the time node continues to postpone, the effect of infrastructure pulling demand will also be discounted."

However, under the background of domestic real estate regulation in 2019, capital construction has already made great efforts and played a significant hedging effect. This is evident from the fact that the cement industry volume and price of the current period are rising and the industry's historical innovation is high. Faced with the above high base, this year's infrastructure construction will continue to maintain rapid growth and increase accordingly.

In addition, whether the infrastructure investment can exceed the expected landing in the year will also depend on the national level policy and fiscal synchronization, otherwise it can only be confined to the expectation of the capital market, and the expectation is to be fulfilled. (Editor: Wu Yan Ling)

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