Market review in January
In June, the machinery industry (CITIC classification) index fell 11.64%, underperforming the CSI 300 index by 4.02 PCT. TTM P / E ratio / P / B ratio of machinery industry is about 22.30/2.47 times. In terms of subdivided industries, the decline of coal equipment / elevator equipment / instruments and meters is small, and the other decreases are more.
This month’s special topic: cultivating the diamond industry has maintained a high boom, the industrial trend has recovered, and the market performance of the diamond industry has been cultivated. From April to October 2021, under the catalysis of a series of events, such as the continuous improvement of market cognition, the continuous realization of the company’s performance exceeding expectations, and the strengthening of the industry sector effect, the diamond sector has achieved double increases in performance and valuation; Since the end of October 2021, due to the disturbance of negative news in the industry and the worry about the performance of Listed Companies in the financial report vacuum period, the share price of the sector has continued to callback to the current low level. At the current time point, we are still firmly optimistic about the cultivation diamond industry. The core is that the industry fundamentals continue to improve and maintain high growth. This month’s special department systematically combed the latest situation of the cultivation diamond industry chain Fundamentals: at the industry level, the import and export data of cultivation diamonds in midstream India continue to improve, confirming the high prosperity of the industry, with CAGR exceeding 100% in the past two years; The downstream fosters diamond retail brands to blossom everywhere, accelerate the layout, drive the continuous improvement of consumer awareness and maintain a good trend of demand; The overall price of cultivated diamond anchored natural diamond is stable. The performance of the industry benefiting the upstream rough traders continues to be realized and the production continues to expand. The overall situation is still in short supply.
At the corporate level, major listed companies have issued performance forecasts for 2021, and their performance has increased significantly. Among them, North Industries Group Red Arrow Co.Ltd(000519) net profit attributable to the parent company is expected to be 450-490 million yuan, with a year-on-year increase of 63.90% – 78.47%; Henan Huanghe Whirlwind Co.Ltd(600172) the net profit attributable to the parent company is expected to be 41 million yuan, with a significant year-on-year turnaround; Henan Liliang Diamond Co.Ltd(301071) the net profit attributable to the parent company is expected to be 232-245 million yuan, with a year-on-year increase of 217.14% – 234.95%.
Industry key recommended portfolio
Key combination: Centre Testing International Group Co.Ltd(300012) , Guangzhou Grg Metrology&Test Co.Ltd(002967) ; Opt Machine Vision Tech Co.Ltd(688686) 、 Shanghai Friendess Electronic Technology Corporation Limited(688188) 、 Jiangsu Hengli Hydraulic Co.Ltd(601100) 、 Leader Harmonious Drive Systems Co.Ltd(688017) 、 Iray Technology Company Limited(688301) 、 Shanghai Hanbell Precise Machinery Co.Ltd(002158) 、 Jiangsu Guomao Reducer Co.Ltd(603915) 、 Dongguan Yiheda Automation Co.Ltd(301029) ； Zhejiang Dingli Machinery Co.Ltd(603338) ； Shenzhen United Winners Laser Co.Ltd(688518) 、 Zhejiang Hangke Technology Incorporated Company(688006) ； Henan Huanghe Whirlwind Co.Ltd(600172) 、 North Industries Group Red Arrow Co.Ltd(000519) 。 “Small but beautiful” combination: Emtek (Shenzhen) Co.Ltd(300938) , Anhui Ronds Science & Technology Incorporated Company(688768) , Henan Liliang Diamond Co.Ltd(301071) , Shanghai Kelai Mechatronics Engineering Co.Ltd(603960) , Suzhou Sushi Testing Group Co.Ltd(300416) , Yindu Kitchen Equipment Co.Ltd(603277) , Warom Technology Incorporated Company(603855) , Guangdong Lingxiao Pump Industry Co.Ltd(002884) , Guangdong Yizumi Precision Machinery Co.Ltd(300415) , Jiangsu Shentong Valve Co.Ltd(002438) .
Industry perspective: focus on the leading companies with high medium and long-term winning probability of high-quality track. Considering the industry track, company competitiveness and valuation level, we are optimistic about: 1) continue to grasp the leading companies that are expected to cross the cycle in the medium and long term of high-quality track, such as core parts companies, some product companies and testing service companies; 2) Tap high-quality leading companies or highly elastic undervalued targets in high growth and fine molecule industries, such as diamond cultivation, photovoltaic / lithium battery / wind power / industrial automation, etc.
1) testing service industry with good business model and large growth space: focus on Centre Testing International Group Co.Ltd(300012) , Guangzhou Grg Metrology&Test Co.Ltd(002967) , Suzhou Sushi Testing Group Co.Ltd(300416) , Emtek (Shenzhen) Co.Ltd(300938) , and pay attention to China National Electric Apparatus Research Institute Co.Ltd(688128) , China Building Material Test & Certification Group Co.Ltd(603060) , Suzhou Electrical Apparatus Science Academy Co.Ltd(300215) .
2) upstream core parts companies in the growth stage or high vision: focus on recommending Opt Machine Vision Tech Co.Ltd(688686) , Shanghai Hanbell Precise Machinery Co.Ltd(002158) , Jiangsu Hengli Hydraulic Co.Ltd(601100) , Shanghai Friendess Electronic Technology Corporation Limited(688188) , Leader Harmonious Drive Systems Co.Ltd(688017) , Iray Technology Company Limited(688301) , Jiangsu Guomao Reducer Co.Ltd(603915) , Dongguan Yiheda Automation Co.Ltd(301029) .
3) high view product companies: focus on North Industries Group Red Arrow Co.Ltd(000519) , Henan Huanghe Whirlwind Co.Ltd(600172) , Shanghai Kelai Mechatronics Engineering Co.Ltd(603960) .
4) special / general equipment industry with high prosperity: focus on Shenzhen United Winners Laser Co.Ltd(688518) , Zhejiang Hangke Technology Incorporated Company(688006) , etc.
Risk tips: macroeconomic downturn, rising prices of raw materials, sharp fluctuations in exchange rate and repeated impact of the epidemic.
