Thanks to policy support, prefabricated buildings have ushered in development opportunities.
Text/Daily Earnings Report Liu Yuchen
Since the beginning of this year, the infrastructure sector has become a hot spot in the market. On February 16, the infrastructure sector once again set off a climax of ups and downs, and the number of construction stocks rose and stopped to more than 20 on the same day.
Among all kinds of up-and-down stocks, prefabricated buildings are the most eye-catching, Hangzhou Garden 20cm two-in-a-row board, Hanjia Design, Hualan Group 20cm up-and-down, and the main board up-and-down is even more numerous.
The "Daily Financial Report" noted that the most important stimulus news is that the official website of the Ministry of Housing and Urban-Rural Development released the "14th Five-Year" Construction Industry Development Plan, by 2025, prefabricated buildings account for more than 30% of new buildings, and at present, various localities have also introduced support policies for the development of prefabricated buildings.
In fact, the policy of prefabricated buildings has long been supported by policies.
In October 2021, the State Council issued the "Carbon Peak Action Plan before 2030", proposing to "accelerate the industrialization of new buildings, vigorously develop prefabricated buildings, and promote steel structure housing"; at the same time, the State Council's "Opinions on Promoting the Green Development of Urban and Rural Construction" once again emphasized "focusing on promoting the construction of steel structure prefabricated housing".
With the active promotion of prefabricated construction projects in various places, the scale of new prefabricated buildings in mainland China has continued to grow. According to the statistics of the Ministry of Housing and Urban-Rural Development, the total number of newly started prefabricated buildings nationwide in 2020 was 630 million square meters, an increase of about 50% year-on-year, accounting for about 20.5% of the newly built construction area. During the "14th Five-Year Plan" period, prefabricated buildings will continue to grow rapidly, and it is expected that by 2025, the proportion of prefabricated buildings in new construction area is expected to reach more than 30%.
Affordable housing is heating up
On July 2, 2021, the State Council issued the Opinions on Accelerating the Development of Affordable Rental Housing (Guo Ban 2021 "No. 22"), which clarified the housing security system framework with public rental housing, affordable rental housing and co-ownership housing as the main body, and stipulated the basic system and support policies for affordable rental housing. According to the document, affordable rental housing mainly solves the housing difficulties of eligible new citizens, young people and other groups, mainly small apartments with a construction area of no more than 70 square meters, the rent is lower than the rent of rental housing in the same quality market in the same area, and related projects can enjoy land support, central subsidy funds, tax reductions, financial credit and other supportive policies.
On December 6 last year, the Politburo meeting again mentioned the need to "promote the construction of affordable housing." On December 10, the Central Economic Work Conference pointed out that we should "adhere to the combination of rent and purchase, accelerate the development of the long-term rental housing market, and promote the construction of affordable housing", in contrast, the relevant expression of the 2020 Economic Work Conference is "attach great importance to the construction of affordable rental housing, and accelerate the improvement of long-term rental housing policies." ”
From "high importance" to "promotion", it may indicate that the construction of affordable housing has entered the implementation stage from the preparatory stage to the implementation stage, on January 20, 2022, the Work Conference of the Ministry of Housing and Urban-Rural Development pointed out: "Adhere to the combination of rent and purchase, and build and raise 2.4 million sets (rooms) of affordable rental housing throughout this year". Combined with the recent government meetings that have repeatedly emphasized the importance of affordable housing construction, it is expected that the construction progress will be significantly accelerated in 2022.
According to incomplete statistics released by various provinces and cities on the construction of affordable housing, a total of 7.39 million sets of affordable housing projects are expected to be raised nationwide during the "14th Five-Year Plan" period, of which the investment in affordable housing construction and security is expected to reach 239.9 billion yuan in 2022.
Affordable housing is a government-led investment project, an important means to respond to "double carbon", and an important policy carrier to lead the transformation of the industry to prefabricated, green construction and intelligent construction. Referring to the past industry development experience, the government will put forward higher requirements for the assembly rate of affordable housing and green construction standards, forming an industry demonstration benchmark, thereby accelerating the pace of green building development.
Therefore, affordable housing is expected to play a strong policy leading role and promote the acceleration of green change in the entire construction industry chain.
According to the statistics of the Ministry of Housing and Urban-Rural Development, in 2019, the newly started prefabricated construction area nationwide reached 418 million square meters, an increase of 44.6% over 2018, and the compound annual growth rate of 2015-2019 reached 54.90%. The proportion of prefabricated buildings in the newly started area of the construction industry has also been increasing, with prefabricated buildings accounting for 1.55% of the newly started area of the construction industry in 2015 and 8.12% in 2019.
The application of prefabricated buildings in commercial housing is also gradually increasing, in 2019, in the newly started prefabricated buildings, commercial housing is 170 million m², and affordable housing is 0.6 billion m², accounting for 40.7% and 13.4% of newly started prefabricated buildings, accounting for more than 50% of the total.
In 2020, the penetration rate of prefabricated buildings in newly started buildings has reached 20%, and it is expected that the proportion of prefabricated construction technologies applied in newly started affordable housing in 2022 and 2023 will be 70% and 80%, respectively, and the penetration rate of prefabricated buildings other than affordable housing will be 25% and 30%, respectively. Based on this, the area of new prefabricated buildings will reach 670 million and 760 million square meters in 2022-2023, an increase of 25% and 13% respectively year-on-year.
Focus on steel structures
There are three main structural forms of prefabricated buildings: prefabricated concrete structures (PC), prefabricated steel structures (PS) and prefabricated timber structures, and the remaining small number of prefabricated buildings use hybrid structures. The cost of prefabricated concrete structures is relatively low, and about 2/3 of the prefabricated buildings in mainland China are prefabricated concrete structures, with prefabricated steel structures accounting for about 30% and wood structures accounting for less.
The advantage of prefabricated concrete structure compared with steel structure lies in cost, but due to its light weight, high strength and strong plasticity, steel is easy to achieve a large continuous space structure and design diversification, making steel structure have a more significant competitive advantage in the field of airport and other venue construction.
The labor cost of prefabricated steel structure is 60%-70% of that of concrete structure, and the demand for construction workers is relatively less, and the rising labor cost of construction workers will be conducive to increasing the share of steel structure in prefabricated buildings. At the same time, the increase in the scale effect of prefabricated steel structure enterprises is expected to further narrow the price difference between steel structures and concrete structures.
In terms of steel structure housing, the level of mainland china and developed countries is far from that of developed countries.
Foreign low-rise light steel residential system has been relatively mature, the United States, Japan, Australia and other countries have long been in the low-rise residential widely used light steel structure, Japan a large number of steel structure buildings more than 90% of the low-rise buildings for 5 floors and below, in Australia light steel structure residential market share of 15%, some parts of Europe also use townhouse steel structure housing.
From the perspective of enterprise type, the mainland steel structure enterprises are roughly divided into three categories, one is the construction project general contracting as the core business, the steel structure is mainly used within the system of large-scale central enterprises, such as China Construction Science and Technology (China Construction Steel Structure), Shanghai Baoye, etc.; the second is steel structure product manufacturing, steel structure construction project contracting and other private enterprises with the main business, such as Honglu steel structure, Seiko steel structure, etc.; the third is small and medium-sized steel structure product manufacturing enterprises.
At present, the market concentration of the steel structure industry in mainland China is low, and the CR5 of the steel structure industry is only about 5%, while the market share of the top three steel structure enterprises in the United States is more than 50%.
In 2016, steel price fluctuations superimposed on the sluggish demand of the downstream construction industry, and some small steel structure processing enterprises closed down, and the concentration of the steel structure industry was improved to a certain extent. In 2019, the number of enterprises with an annual output of 50,000-100,000 tons of steel structure has dropped sharply again, and with the improvement of steel structure technical standards and industry specifications, the withdrawal of small and medium-sized enterprises from the market will be further accelerated, and the strong pattern of the steel structure industry can be expected.
The business model of steel structure enterprises mainly has three forms, one is to provide drawings, steel structure enterprises to make steel structure components as the main business of the manufacturing mode, the representative enterprise of this model is Honglu steel structure; the second is the steel structure enterprise responsible for production and construction, installation-based contractor mode, the third is the steel structure building general contracting mode, steel structure enterprises are responsible for the design, manufacturing, installation and other whole process of steel structure. Domestic large-scale steel structure enterprises such as Seiko steel structure and southeast network frame are mainly based on the mode of subcontracting and general contracting.
For steel structure enterprises in the manufacturing mode, cost control and scale advantage are the core competitiveness, and such enterprises are worthy of attention.