3 trillion ready to go, infrastructure sound “assembly call”?
At the beginning of the New Year, infrastructure became “sweet property”.According to mainstream media statistics, as of January 10, 2022, the total investment scale of major projects across the country exceeded 3 trillion yuan, combined with the issuance of the first batch of special bonds, infrastructure is on the road to momentum.So, which listed companies can enjoy this wave of infrastructure dividends?Industry expectations heating up add infrastructure, seems to become a global consensus.In the United States, the $1.2 trillion “Infrastructure Act” involves renovating or building roads, Bridges, railways, ports and highways, as well as upgrading pipelines and strengthening the nation’s power grid.In the European Union, it plans to raise 300 billion euros for large-scale infrastructure investments in digital, health, energy, climate and other areas around the world.In China, the status of infrastructure has also been further enhanced.The executive meeting of The State Council held on January 10, 2022 pointed out that the current economic performance is at a hurdle.We need to give greater priority to stabilizing growth, implement the strategy of boosting domestic demand, refrain from indiscriminate irrigation, and expand final consumption and effective investment in a targeted manner. This is of great significance to withstand new downward pressure and ensure steady economic performance in the first and first half of this year.The meeting stressed that 1.2 trillion yuan of local government special bonds issued in the fourth quarter of 2021 should be transferred to specific projects as soon as possible in accordance with the requirement that funds follow projects.We will promptly issue special bonds already issued this year, make good use of investment from the central government budget, leverage more nongovernmental investment, and strive to generate more physical work in the first quarter.According to public information, the first batch of special bonds in 2021 will be 1.46 trillion yuan, higher than 810 billion yuan in 2019 and 1 trillion yuan in 2020.In terms of regional distribution, the eastern region plans to issue special bonds worth 410 billion yuan in the first quarter, accounting for 67% of the total, higher than the average level in 2020 and 2021.In response, Li Qilin, chief economist of Hongta Securities, said in an interview with the media: “From a series of policy directions, fiscal expenditure is expected to grow rapidly from the first quarter of this year, and the role of infrastructure in supporting economic growth will be strengthened.This year, funds for infrastructure investment and expansion will mainly come from government expenditures. To be specific, we will use the money from special bonds to generate real work.”It should be noted that the circular on the funding requirements for special debt projects in 2022 specifies that special bonds will be mainly invested in nine areas, including transportation infrastructure and energy. A negative list of special bonds will also be issued, and projects other than people’s livelihood will be banned from building, building and high-risk areas across the country.For example, 14 provinces and cities including Guangdong announced a total investment of 13.5 trillion yuan in comprehensive transportation during the 14th Five-Year Plan period, an increase of over 40% compared with the 13th Five-Year Plan period.Guotai Junan believes that: “in 2021 special fiscal debt postposition and 2022 preposition and other policies, carbon peak policy issued catalytic related infrastructure orders landing, infrastructure investment will pick up more than expected, leading companies with strong competitive advantages can get higher growth than the industry, cash flow is expected to better than expected.China State Construction Engineering co., LTD. (CSCEC) is one of the leading companies in the large infrastructure sector. 90% of the super-tall buildings in China are developed by cSCEC, and infrastructure is also one of its three major businesses.According to the latest financial results, in the first three quarters of 2021, the operating revenue is 1,337 billion yuan, up 24% year-on-year, and the net profit is 37.8 billion yuan, up 21% year-on-year;Among them, housing construction business, infrastructure construction and investment business, real estate development and investment business, survey and design business respectively achieved revenue of 809.9 billion yuan, 290.9 billion yuan, 217.8 billion yuan, 6.35 billion yuan, up 19.7%, 22.0%, 37.9%, 0%, respectively.Tianfeng Securities believes:”We judge the difference during the real estate investment has a certain toughness, infrastructure investment stabilised, state (represented by China building) benefit capital advantage, qualification and construction ability, the main business stability change (such as housing construction and promoting green building/wisdom construction industrialization and so on, leading the industry change), medium and long-term real estate/building share or continued ascension,Good company sound management quality continuity.”Tisco rust: infrastructure can not do without steel, also indirectly good steel stocks, and steel stocks in TiSCO rust commendable.Its cost advantage is significant, backed by the annual output of 13 million tons of iron refined powder Tisco group, can obtain a stable iron refined powder supply and a certain discount, and in nickel, chromium, molybdenum, coal and other layout.Everbright Securities said: “In recent years, the company has carried out a series of technical transformation, to achieve large-scale, modern and intensive technology equipment, with high efficiency, good quality, low cost, energy conservation and environmental protection advantages.At the same time, the company insisted on finding the difference between the standard, the production efficiency has been greatly improved, the technical and economic indicators of key processes have made significant progress, and the cost reduction effect is remarkable.”In addition, TiSCO stainless steel has a merger expectation: according to the company’s target, by the end of 2023, stainless steel production capacity will be from 4.5 million tons to 15 million tons.Conch cement: infrastructure is inseparable from cement, and conch cement as a cement industry leader, natural benefit.According to the latest financial results, in the first three quarters of 2021, the operating revenue of 121.711 billion yuan decreased by 1.89% year-on-year, and the net profit of 22.390 billion yuan decreased by 9.50% year-on-year, which is related to the rising cost of coal prices.In 2022, the price of coal may stabilize, and the cost of cement may be reduced to some degree. The superimposed strong demand is conducive to the favor of the capital market.Minsheng Securities pointed out: “Abundant cash in hand, the first three quarters of monetary funds 63.5 billion yuan, trading financial assets 26.3 billion;Integrated layout with the help of location advantages, for example, Fengyang, Anhui, is rich in quartz sand and mineral resources, and the company’s factories are all over the country, which is not only rich in wind (northwest), but also convenient for landing distributed photovoltaic.In addition, cement peers also have the need to reduce carbon, the company in the future, such as more electricity sales channels.”It should be noted that the sustainability of infrastructure plate has been poor in history, and more pulse prices are presented. We should pay attention to the risk of locking up.The views expressed in this article are personal and not related to the newspaper.The stock market has a risk, investment needs to be cautious, this article is for reference only, the actual profit and loss oneself.