Industry insiders said: the determination of the timetable for the new household registration system reform has made important preparations for new urbanization. On the 18th, individual stocks in the construction machinery sector of the two markets performed actively, which may mean that the long-neglected construction machinery and building materials cement industries will usher in a new round of prosperity cycle and become the "white horse stocks" of next year.

　　Household registration system reform catalyzes urbanization expectations

　　The Central Urbanization Work Conference pointed out that, from the current requirements of China's urbanization development, the main task is to solve the problem of granting urban residency to rural people who have moved to cities for employment, and strive to improve the quality and ability of migrant workers to integrate into cities. Fully liberalize household registration restrictions in towns and small cities, orderly liberalize restrictions in medium-sized cities, reasonably determine settlement conditions in large cities, and strictly control the population size of mega-cities.

　　From the meeting content, it can be seen that the management will take the promotion of agricultural population settling in cities as a breakthrough for new urbanization. The Ministry of Public Security said in an interview on the 18th that by 2020, a new household registration system should be basically formed, with legal stable residence and legal stable occupation as the basic conditions for household registration migration, with registration at the place of regular residence as the basic form, and featuring urban-rural unity, people-oriented, scientific and efficient, and standardized and orderly.

　　Xu Peng of Datong Securities said that, calculating from the time, if the new household registration system is to be basically formed by 2020, there are only 7 years left. Therefore, the new household registration system needs to be introduced next year to ensure basic coverage by 2020. Thus, this news directly stimulated stock market expectations for urbanization themes. And stock market investors first think of, of course, the building materials and construction machinery needed for infrastructure construction.

　　Cement industry sees both volume and price rise, optimistic for next year

　　Liu Dongsheng of UBS Investment introduced: from industry data, from January to November, the growth rate of cement-related demand investment (real estate development investment + infrastructure investment) increased by 21.9% year-on-year, 0.2 percentage points higher than the year-on-year growth rate from January to October, continuing to remain near the historical average. By project, infrastructure investment growth remained stable, and real estate investment growth slightly rebounded. Moreover, it is worth noting that in November, the national new housing construction area increased by 11.5% year-on-year, with the growth rate increasing by 5 percentage points—in previous years, the fourth quarter had low construction area due to weather, but this year saw a significant increase, indicating a recovery in the prosperity of infrastructure construction.

　　From January to November, cumulative cement output increased by 9.2% year-on-year, with the growth rate increasing by 0.2 percentage points, maintaining a high level of around 9.0% for four consecutive months. Cement prices also rose beyond expectations in November. The average price in the Jiangsu, Zhejiang, Shanghai, and Anhui regions increased by 48 yuan/ton.

　　From this set of data, it can be seen that the prosperity of the cement industry is showing signs of recovery, and both volume and price are rising. Therefore, it is expected that the supply and demand pattern may further recover next year, which is worth further attention from value investors. Due to the regional characteristics of the cement industry, focus can be placed on cement listed companies in regions where prices are rising rapidly, such as those in East China and South China, and those in North China.

　　Pay attention to construction machinery stocks near additional issuance prices

　　Xu Peng of Datong Securities introduced: the construction machinery industry has also seen a recovery in prosperity. According to statistics, in November, the total sales volume of key companies in the excavator industry increased by 7.5% month-on-month and 20.2% year-on-year. Among them, domestic sales increased by 28.8% year-on-year, continuing the high growth rate since August, while the export situation still showed a decline and constituted a drag. But it also indirectly shows that the strength of domestic demand is sufficient to offset the adverse factors of exports.

　　From the secondary market, from December 9 to December 13, the machinery industry index rose 0.14%, while the CSI 300 fell 1.86%. In fact, since entering the fourth quarter, this situation of the machinery industry performing better than the broader market has appeared many times, indicating that institutional funds have begun to replenish the construction machinery industry that was previously abandoned. The main reason for analysis should be that after a long-term decline, the average price-earnings ratio of the construction machinery sector has reached a safety margin, and the investment growth brought by urbanization is relatively objective (some institutions estimate that the total investment in the next five years may reach 25 trillion yuan). The construction machinery industry will become a clear beneficiary industry.

　　In terms of operation, the construction machinery industry is not subject to regional restrictions. Therefore, Xu Peng suggests that investors pay attention to second-tier blue-chip listed companies with moderate circulating shares and stable performance, especially some construction machinery stocks that have previously had additional issuances and whose stock prices are already close to or even below the additional issuance price.