The wind knows the strong grass, the fire sees the real gold! Why is infrastructure so sturdy? _Sina Finance_Sina.com

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　　Text/Pengpeng Notes

The wind knows the grass, and the fire sees the real gold.

Only after a thousand trials and tribulations in the market will we know what the biggest fundamentals of A shares are. Therefore, real old investors will never underestimate the determination of the policy to stabilize growth!

Today, the infrastructure industry chain has become the most dazzling star of A-shares. The typical one is the building decoration sector, which soared by 3.84%, with a total of 28 daily limits, such asHualan Group、Hangzhou Garden、Aoya Design、Jinpu Garden、new city、Longjian shares、Anhui Construction Engineering、Design Institute、CMEC、Zhejiang Construction Investment、Ningbo Construction Engineering、CCCC、Hongrun ConstructionWait.

　　The reason why the infrastructure industry chain has skyrocketed is mainly due to three logics: 1. The central government has set the tone to comprehensively strengthen infrastructure construction, and the logic of giving priority to infrastructure construction to stabilize growth is further strengthened; 2. Infrastructure construction is an important starting point for policies to stabilize growth. Infrastructure investment increased by 8.5%; 3. This round of infrastructure is different, and the demand is stronger than in 2018 and 2020.

Next, we will interpret the rise of infrastructure from a top-down perspective.driving force。

　　1. The central government sets the tone to comprehensively strengthen infrastructure construction, and further strengthen the logic of giving priority to stable growth in infrastructure construction

The collective surge in the infrastructure industry chain is mainly due to the overall strengthening of infrastructure construction set by the central government.

April 29,The meeting of the Central Finance and Economics Committee and the Political Bureau of the Central Committee proposed to comprehensively strengthen infrastructure construction and further strengthen the logic of giving priority to infrastructure construction for 22 years of stable growth, and open up new development space for my country’s current and future infrastructure construction, which will have a positive and far-reaching impact on the construction industry. Since the Central Economic Work Conference in December 2021 set the tone for 22 years of steady growth, the National Standing Committee has intensively deployed related work, accelerated policy advancement and the pace of project implementation. At present, the central government has set the tone to comprehensively strengthen infrastructure,Zheshang SecuritiesIt is expected that the central ministries and commissions will issue short-term, medium- and long-term supporting policies in the future.

After the market close on May 6, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council issued the “Opinions on Promoting Urbanization Construction with County Towns as an Important Carrier”.CITIC SecuritiesIt is pointed out that county-level urbanization will become the starting point for increasing my country’s urbanization rate and improving the level and quality of infrastructure between regions.Policies related to county urbanization will help: 1) solve local investment and financing problems and promote the construction of traditional infrastructure; 2) strengthen the county’s industry and population, and consolidate the demand for the county’s real estate market; 3) promote the construction and quality improvement of county infrastructure, with The related needs of the renovation of old communities, digital new infrastructure, underground pipe network renovation, ecological restoration, and environmental protection management have increased.

Since the second half of last year, the economy has faced triple pressures (shrinking demand, supply shocks, and weakening expectations). At the beginning of this year, two new challenges emerged: the conflict between Russia and Ukraine and the recurrence of the epidemic. There is a big gap between the target of around 5.5%, and the pressure to stabilize growth continues unabated. Even from the bottom-line thinking of employment, it is necessary to continue to increase counter-cyclical adjustment. Since it is difficult to stimulate consumption in the epidemic environment, and the transmission efficiency of investment policies is higher, overweight infrastructure is still the first choice for stable growth. Therefore, since the end of last year, the key role of infrastructure investment in stabilizing growth has been fully recognized, and my country’s policies to support infrastructure investment have been continuously implemented.

On April 26, Xi Jinping presided over the 11th meeting of the Central Finance and Economics Committee. The meeting pointed out that it is necessary to strengthen the construction of network-based infrastructure such as transportation, energy, and water conservancy; guide market expectations, clarify policy orientation and principles, and stabilize market confidence.

Guosheng Securities pointed out that the importance of infrastructure has been comprehensively increased, and the medium and long-term space has been opened; it continues to remind that this year’s infrastructure has a high probability of increasing, about 8% or even higher for the whole year, and pay close attention to the investment opportunities in the infrastructure chain, especially the new security infrastructure. The meeting required all regions and departments to “take the initiative to take responsibility, act proactively, rectify problems in a timely manner, and guide market expectations”, further pointing to the fact that the bottom line of the policy has been reached, and the policy of stabilizing growth is expected to be implemented more quickly.

　　Everbright Securities(Right protection) believes that this meeting verified the determination of high-level leaders to increase investment in infrastructure, and raised the market’s view of “infrastructure as a short-term means of underpinning the economy” to “guarantee national security. Smooth domestic circulation and promote domestic and international dual circulation” higher strategic level. The meeting pointed out the main direction of this round of infrastructure investment, namely the construction of water network, road network and energy network.

　　2. Infrastructure is an important starting point for policies to stabilize growth. In the first quarter, infrastructure investment increased by 8.5%

my country adopts a macro-prudential policy of counter-cyclical regulation. Counter-cyclical regulation refers to the use of various policy tools to smoothen the cyclical fluctuations of the economy and reduce negative impacts. Specifically, when the economy is slowing down, increase fiscal and monetary support to stimulate the economy, and when the economy is overheating, tighten fiscal and monetary policies to avoid bubbles. Investment, consumption and exports are known as the “troika” driving GDP growth.When the economy is in a downward trend, the government often adopts the method of increasing infrastructure investment to stabilize the economic situation. Therefore, infrastructure investment is also known as a counter-cyclical stabilizer.

In 2022, exports and real estate investment will decline marginally, consumption will be weak, traditional economic growth momentum will be insufficient, the short-term economy will still be under pressure, superimposed on the high base effect, and the economic downturn will enter the second half. As an important starting point for stabilizing growth, infrastructure will once again make efforts. The intensity of infrastructure investment mainly depends on three points: policy support, financial support and the degree of project reserves.Judging from the current situation, the signal of stable growth at the policy level is clear, the fiscal expenditure space at the capital level is ample, and the preliminary preparations at the project level are sufficient. 2022 is likely to be a big year for infrastructure construction.

With the repeated outbreaks of the new crown epidemic this year, Xi’an, Shenzhen, Jilin, Shanghai and other regions have adopted a series of prevention and control measures such as city closures, which have undoubtedly increased the downward pressure on the economy while effectively curbing the spread of the epidemic. According to statistics from the Bureau of Statistics, my country’s GDP in the first quarter of 2022 increased by 4.8% year-on-year, a slight decline from the two-year compound growth rate of 5.1% in the fourth quarter of last year. The Politburo meeting held at the end of April pointed out that the severity of the current economic situation in China has increased, but the meeting also sent a clear signal to strengthen confidence and strive to achieve the expected goals of economic and social development throughout the year.

Judging from the review data of the Troika, investment has maintained rapid growth.

　　1) Consumption:The growth rate of social zero in 21 years was high and then low (12.5% ​​year-on-year for the whole year, and 1.7% year-on-year in December). The epidemic situation in first- and second-tier cities suppressed consumption. In 22Q1, social zero increased by 3.6% year-on-year, and fell by 3.5% in March;

　　2) Import and export:In 2021, the growth rate of import and export remained high. In March 2022, the import data declined (-0.1%), and the national foreign trade cargo throughput fell by 6.1% year-on-year in the month;

　　3) Investment:The growth rate of fixed investment in infrastructure in 21 years was the bottom (+0.4%), the real estate industry was fast and slow (+4.4%), and the manufacturing industry maintained a high level of prosperity throughout the year (+13.5%); in 22Q1, the growth rate of real estate investment slowed down significantly (+ 0.7%),Infrastructure investment grew rapidly (+8.5%), while manufacturing investment remained strong (+15.6%).

Guosheng Securities pointed out that it is a consensus that stable growth in 2022 requires infrastructure development, but there are still differences in the recovery rate and direction of infrastructure development. Under the assumption that consumption is recovering, exports are down but resilient, and real estate is down but still slightly positive, to achieve the target growth rate of 5.5% in 2022, it may take the growth rate of infrastructure investment to reach about 8% in 2022 (market-neutral expectation 5 -7%). Overall, the total amount of funds invested by the general finance in infrastructure construction is about 4.9 trillion yuan, an increase of 21.1% compared with 2021. Structurally, the new and old infrastructure will work together.

　　Old infrastructure:According to the “14th Five-Year Plan”, transportation, energy and water conservancy are the focus of the old infrastructure, and we can focus on the four major directions of transportation and water conservancy, clean energy, coal power transformation, and underground pipe network.

　　New infrastructure:During the “14th Five-Year Plan” period, the average annual growth rate is about 20%, and the average annual volume is about 1.6 trillion yuan, which is about 10% of the infrastructure investment. Among them: data centers, high-speed rail transit, 5G, etc. account for a high proportion, and the growth rate of charging piles Fastest, can focus on data center and rail transit. In 2022, data centers and urban rail transit may be the two major increments.

As the primary starting point for infrastructure investment, new infrastructure is actually mostly industrial investment. Its growth rate is relatively fast, but its scale is relatively small, about 10% of infrastructure investment. During the “14th Five-Year Plan” period, Guosheng Securities estimated that the total investment scale of the 7 major areas of new infrastructure may be close to 8 trillion yuan, with an annual average of 1.6 trillion yuan, which is about 10% of the annual infrastructure investment. Among them, the investment scale of data center is the largest, accounting for nearly half; the investment scale of high-speed rail transit and 5G is second. The average annual growth rate of the new infrastructure is about 20%, of which the investment in car charging piles has the fastest growth rate, and the growth rate of 5G and data centers is also over 20%.

As far as 2022 is concerned, the construction of data centers and rail transit in urban circles may be the main increase, while other sub-items such as 5G, charging piles, etc. will have a low growth rate or a small scale, which may have a limited impact on the overall investment.

　　3. This round of infrastructure is different, and the demand is stronger than in 2018 and 2020

Since 2008, my country has experienced roughly five rounds of steady growth in infrastructure construction, which occurred in 2008, 2012, 2016-17, 2018, and 2020, respectively.From the perspective of market performance, the start of the sector market occurred when the policy turned, rather than when the industry fundamentals substantially improved, but the sustainability of the market depends on the continued realization of the fundamentals.The key to whether the fundamentals can be fulfilled is mainly affected by the willingness of policy to exert infrastructure construction + the availability of funds. The willingness to exert policy depends on the performance of real estate investment, and the availability of funds is greatly affected by the clearing of local hidden debts in 2018.to be specific: 1) In 2008 and 2012, there was a strong willingness to develop infrastructure + sufficient funds, the industry fundamentals continued to improve, and the market had a certain sustainability; 2) In 2016-17, the willingness was the strongest + sufficient funds were in place, The fundamentals of the industry have been greatly improved, and the market has continued with the largest increase; 3) In 2018 and 2020, the willingness is strong + the funds are relatively lacking, the industry fundamentals have not improved significantly, the market is short-lived and the increase is relatively limited.

　　Changjiang SecuritiesSaid that this round of stable growth is necessary + funds are combined, and demand may continue to improve. Overall, this round of stable growth is more necessary + sufficient funds, and the demand is stronger than in 2018 and 2020.

　　necessity:At the end of 2021, the Central Economic Work Conference pointed out that in 2022, “economic work must take the lead and make progress while maintaining stability”. Combined with this year’s export and manufacturing investment, it is difficult to maintain rapid growth under a high base, and the sharp decline in real estate sales will gradually be transmitted. On the investment side, it is expected that real estate investment will remain under pressure in the first half of the year, and economic growth will be significantly more reliant on infrastructure. From the perspective of the specific starting point of infrastructure development, it also has substantial support. New infrastructure, new urbanization, major transportation and water conservancy projects will be the main focus, and we can focus on new infrastructure, new energy projects, water conservancy and hydropower projects. Three general direction.

　　funds:In the short term, on the one hand, the public financial funds and special debts saved last year will be used for “cross-cycle adjustment” this year; Quarterly issuance and early use (and the issuance of special bonds will not start until March in 2021), 484.4 billion yuan has been issued in January this year, a significant year-on-year increase. Changjiang Securities estimates that the amount of special bonds invested in infrastructure has increased by 60% throughout the year, helping infrastructure construction. Investment accelerated by 4pct.

For the targets that benefit from stable growth, Changjiang Securities believes that it can be screened from three dimensions:1) Performance flexibilityOn the one hand, it depends on the proportion of the company’s own infrastructure-related business, which directly determines its own income and performance elasticity brought about by the reversal of infrastructure demand. On the other hand, it depends on the company’s own competitive advantages. If the market share increases, it will gain Greater upward flexibility (for example, the market share of construction central enterprises has continued to increase in recent years);2) Margin of SafetySince the start of this round of steady growth in early December last year, there have been large differences in the growth rates of different companies, and the current corporate valuation level directly determines their margin of safety (the current sector PE and PB valuations are both at historically low levels, and a large number of central enterprises PB net);3) Growth logic, in addition to the β brought by the steady growth of infrastructure, some companies are also undergoing positive changes themselves, expanding the second growth curve other than engineering, which is expected to bring about a revaluation of their own value.Recommended to followCCCC、China Railway、Chinese architecture、POWERCHINA、China Railway Construction、Huashe Group、China Chemical、Honglu Steel Structure、Seiko steel structureWait.

Although stocks related to the real estate industry chain have risen sharply, for many small companies, the stock price often goes up without realizing it. What should we do?

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3/17/21Late NuggetsFound the main lurkingMaiwei sharessigns, and at 14:50 that day, a reminder of the change was made. Simultaneously,Level-2The data of the net volume of large orders shows that on March 17, the net volume of large orders changed from continuous outflow to net inflow. The next day, Maiwei’s shares soared by 9.73%, and on the third day, it rose by 4.31% again, and the cumulative increase in 2 days was 14.46%.

　　Level-2The data on the net volume of large orders shows that from the beginning of January to the end of March 2021, there was a significant outflow of the net volume of large orders of Maiwei shares, indicating that the main force was fighting and retreating, which also led to the continuous decline of the stock price. When the net volume of large orders continued to flow in, the share price of Maiwei shares began to rise steadily. We can clearly see how the outflow and inflow of the net amount of large orders form a positive feedback with the stock price.

　　June 29 and August 17,B/S pointA reminder signal was also issued, and Maiwei shares rose from 269.27 yuan to 324.6 yuan, an increase of 20.55% in the range.

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　　This product is provided by Youpin Investment Consultants, institution number ZX0111.

　　Risk Warning: This product is for reference only and does not constitute specific investment advice. The strategic product R&D investment consultant number is A0340617070005. The strategy is based on the algorithm model, which has limitations and does not represent future income. Users need to make investment decisions independently and at their own risk. Market risk, the investment need to be cautious.

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Can’t escape my palm!The Nuggets in the late game help you easily capture the main force

Five Star Intelligence Bureau is new!Mainline stock selection + exclusive analysis + master face-to-face

How to copy homework for smart money?[Northbound Nuggets]Helping you

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Disclaimer: This article does not represent the views of Sina Finance

Responsible editor: Huang Peng