On February 7, the first trading day of the year of the tiger of a shares, the three major stock indexes rose together and ushered in the “good start” market. More than 3400 stocks in Shanghai and Shenzhen rose, and the net purchase of northbound funds throughout the day exceeded 5.5 billion yuan. The A-share non-ferrous metal sector broke out strong throughout the day. On February 7, the non-ferrous leading ETF (159876) constituent stocks Guocheng Mining Co.Ltd(000688) , China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) , China Minmetals Rare Earth Co.Ltd(000831) rose sharply, Henan Shenhuo Coal&Power Co.Ltd(000933) , Yunnan Aluminium Co.Ltd(000807) , Rising Nonferrous Metals Share Co.Ltd(600259) , Nuode Investment Co.Ltd(600110) rose by more than 7%, and Aluminum Corporation Of China Limited(601600) , Chengtun Mining Group Co.Ltd(600711) rose by more than 6%. The non-ferrous metal industry (Shenwan) has a net inflow of 3.422 billion yuan of main funds in a single day, ranking second among the 31 Shenwan level industries. On the same day, the non-ferrous leading ETF (159876) rose 4.64% and closed up 3.64% on the same day, becoming the absolute main force behind the “good start” of the year of the tiger.
In addition to the “good start” market, the concentrated outbreak of the operating performance of the non-ferrous metal sector in 2021 is the catalyst for the hot market of the sector. As of January 28, only 41 constituent stocks of color leading ETF (159876) have disclosed the performance forecast / express report of 2021. All 41 constituent stocks have achieved positive performance growth, and the net profit of 28 constituent stocks has increased by more than 100%. Among them, the net profit of DeNO shares has increased by more than 7000% year-on-year, Chengxin Lithium Group Co.Ltd(002240) , Tibet Summit Resources Co.Ltd(600338) , Dingsheng new materials has increased by more than 2000% and Chengtun Mining Group Co.Ltd(600711) has increased by more than 1000%, which continues to verify the continuous performance of the non-ferrous metal industry under the tense relationship between global supply and demand.
On the other hand, both horizontally and vertically, the valuation level of non-ferrous metal sector is relatively low. According to wind data, as of February 7, 2022, the PE valuation of CSI nonferrous metals index was 27.41, which was relatively low compared with Kechuang 50 index and gem index. Vertically, the current PE valuation of CSI nonferrous metals index is about 10% in the last five years.
According to wind data, as of February 7, 2022, the CSI nonferrous metals index (930708) rose 27.50% in the latest year, while the CSI 300 and Shanghai composite indexes fell 15.49% and 1.91% respectively in the same period. Similarly, as of February 7, 2022, the price of nonferrous leading ETF (159876) has increased by 32.63% in just over 10 months since it was listed on March 24, 2021.
Public information shows that the non-ferrous leading ETF (159876) closely tracks the CSI non-ferrous metal index (930708), covering 60 leading A-Shares in the field of non-ferrous metal mining and beneficiation, non-ferrous metal smelting and processing. Among them, the new energy metal sector has “lithium leading” Ganfeng Lithium Co.Ltd(002460) , Tianqi Lithium Corporation(002466) , the industrial metal sector has “copper aluminum leading” Aluminum Corporation Of China Limited(601600) , Jiangxi aluminum industry, etc., the rare earth permanent magnet sector has “high-end material leading” Zhejiang Huayou Cobalt Co.Ltd(603799) , China Molybdenum Co.Ltd(603993) , etc., and the precious metal sector has “copper gold leading” Zijin Mining Group Company Limited(601899) .
According to the analysis of Minsheng securities, looking forward to 2022, the steady growth policy will boost demand, the supply curve is still steep, and the metal price is expected to run at a high level. In the context of low inventory, the core of cyclical fluctuation is the change of supply and demand. The rise of commodity prices in this round has strong sustainability, mainly due to the limited ability of supply side adjustment, while the demand side is driven by emerging fields, superimposed with steady growth policies to boost the demand in traditional fields, and pay attention to the change of demand side in 2022.
According to the analysis of Citic Securities Company Limited(600030) , due to strong downstream demand and tight supply, it is expected that the price of battery metal will not decline in previous years after the year. Cobalt prices rose more than expected. The valuation of the sector is at a historical low. At present, it has high allocation value. The lithium sector is also expected to rebound after continuous adjustment.
Cinda Securities said that in the context of the “double carbon” goal, it attaches importance to the historic investment opportunities of new energy and new materials, and focuses on new energy metals with strong demand and weak supply pattern (lithium cobalt nickel rare earth) and new metal materials benefiting from industrial upgrading and domestic substitution. In 2022, non-ferrous metal prices will remain high as a whole, corporate profits are expected to continue to increase significantly, and the valuation of the sector will return to a low level. Under the background of China’s continued loose monetary policy, we expect the valuation of the non-ferrous sector to repair the market.
According to the analysis of professionals, the logic of the non-ferrous sector is relatively easy to judge, but it is very difficult to do fine and deep stocks, and the investment cost performance is also low. From this perspective, investing in non-ferrous funds is a better choice. The leading non-ferrous ETF (159876) provides investors with high-quality tools to grasp the investment opportunities of non-ferrous metals.
