in January, the growth rate of new social finance became positive and will gradually enter the upward cycle, which is conducive to improving investors’ pessimistic expectation of profits, which is one of the important conditions for the previous bottoms of a shares. As 2022 is a stable growth year, the growth rate of new social finance is expected to continue to rise, forming a positive support for a shares. After the Fed’s interest rate hike and other external factors affecting risk appetite are gradually implemented, A-Shares are expected to return to the upward cycle. The judgment of “√” of A-share trend throughout the year, “undervalued +” and “depression strategy” are still the dominant allocation strategy at present. From February to March, we can focus on the opportunities of industrial metals, petroleum and petrochemical, cement and so on, which benefit from the force of steady growth and the continuous rise of bulk prices.
core view
[view policy · discussion on the city] the growth rate of new social finance has become positive and the A-share has taken a turn for the better. since the beginning of the year, the rapid narrowing of China US interest rate spread and the deterioration of the chip structure of A-Shares have led to the adjustment of a shares. In January, the total amount of new social finance in China exceeded expectations, and the growth rate of new social finance has become positive. Historically, new social finance saw the bottom of A-Shares in the month or quarter after the growth rate became positive, and the difference in time lag was mainly due to the RMB exchange rate. In the departure stage of loose internal and tight external monetary policies between China and the United States, there is pressure on the RMB exchange rate to depreciate. Until the Federal Reserve releases the dove signal, the interest rate gap between China and the United States stabilizes and expands again, the A shares will not bottom out and return to the upward trend. At present, the continuous higher than expected inflation in the United States has strengthened the expectation of raising interest rates by 50bp in March, the yield of US bonds has risen rapidly, the interest rate gap between China and the United States has narrowed to 80bp, and the concerns of RMB devaluation and capital outflow have suppressed the risk appetite of a shares. We believe that after the Federal Reserve raises interest rates in March, the market will further observe whether the Federal Reserve will have more hawkish actions. If there is marginal easing, the US bond yield will decline, the interest rate gap between China and the United States will expand again, and A-Shares may return to the upward cycle. Looking forward to the whole year, we maintain the view that A-Shares are stable before rising and similar to “√”, and we can focus on “undervalued +” and depression strategy throughout the year. In addition to the valuation and repair market in traditional fields, the steady growth direction should also focus on the undervalued sectors in new infrastructure (new energy infrastructure and digital infrastructure).
[resumption · internal view] most of the major A-share markets rose this week, showing style differentiation, the main reasons are that 1) China’s credit data exceeded expectations, and investors’ expectations for steady growth were further strengthened; 2) with US inflation exceeding expectations and US debt breaking 2, global investors’ expectations for interest rate hikes were further strengthened on the original basis, Growth stocks are under the pressure of killing valuations, and the pressure of declining profits in China also makes investors worried about the sustainability of the performance of the growth sector with high growth last year.
[meso · boom] the turnover of civil aviation passengers increased in December, and the prices of resource products such as billet, rebar and power coal increased this week. in December, the year-on-year growth of PCB orders in North America expanded, the year-on-year growth of PCB shipments narrowed, and the year-on-year growth of PCB BB in North America expanded. From January to December, the cumulative year-on-year growth rate of Telecom main business income narrowed. In December, the turnover of civil aviation passengers and civil aviation cargo and mail increased. In January, the average price of Huaxia sun double offset paper (70g) and coated paper (128-157g) in South China rose. The prices of billet, rebar and iron ore rose this week; The futures prices of coke, coking coal and thermal coal rose.
[capital · numerous and few] foreign capital flows back, and the issuance of funds is still slow. the net inflow of funds going north this week was 10.74 billion yuan; The total net inflow of financing funds in the first four trading days was 3.91 billion yuan; 4.7 billion partial equity public funds were newly established, down from the previous period; ETF continued its net subscription, corresponding to a net inflow of 5.8 billion yuan. In terms of industry preference, banks, non bank finance, non-ferrous metals, etc. have higher net purchase scale of northbound funds; Centralized purchase of financing funds for computers, electrical equipment, building decoration, etc; There are more applications for pharmaceutical ETFs and more redemptions of securities companies. The scale of net reduction of important shareholders is reduced; The planned reduction scale increased slightly.
[theme · wind direction] this week’s industrial observation – the release of the “14th five year plan” for financial standardization, focusing on the digital RMB. catalyzed by events such as the pilot of digital currency for the Winter Olympic Games and the release of the 14th five year plan for financial standardization, digital currency performed well last week. At present, China’s digital currency has entered a large-scale pilot stage, and the digital RMB is ready to emerge. It is suggested to continue to pay attention to the sector investment opportunities catalyzed by subsequent events.
[data · valuation] the valuation level of all A-Shares this week is higher than that of last week. PE (TTM) rose 0.3x to 15.6x, in the quantile of 46.7% of the historical valuation level. The valuation of the sector was divided, among which the valuation of the leisure service sector rose more, and the electrical equipment sector fell significantly.
risk tip: the strength of the policy was less than expected, and the US dollar appreciated sharply.
01
policy observation and market discussion – the positive growth rate of new social finance and the turnaround of A-Shares
● the total amount of social finance exceeded expectations, but the structure is still poor
in January, the growth rate of social finance stock continued to rise steadily, and the year-on-year growth rate of new social finance turned positive. in January, social finance increased by 6.17 trillion yuan, with the previous value of 237 million yuan, an increase of 981.6 billion yuan year-on-year; New RMB credit was 3.98 trillion yuan, up from 1.13 trillion yuan, an increase of 400 billion yuan year-on-year. The growth rate of social finance stock was 10.5%, which continued to rise by 0.2% compared with the previous period; The cumulative growth rate of new social finance rose sharply year-on-year, became positive and rose to 18.92%; The six-month rolling growth rate of new social finance was 6.61% year-on-year, and became a regular.
from the perspective of social finance structure, the exceeding expectation of social finance in January was mainly due to the short-term financing of enterprises (bill financing + enterprise short-term loan) and government bond financing. on the one hand, this shows that the policy side is positive and promising. Under the tone of stable growth and policy front, the issuance of government bonds is accelerated, which indicates that stable growth projects are expected to be gradually implemented in the future. On the other hand, the super seasonal growth of short-term financing of enterprises in January is related to the impact of financial institutions on the good start of credit, early lending and early benefit.
in contrast, the new medium and long-term RMB loans decreased year-on-year, the medium and long-term financing demand is insufficient, and the social financing structure is still poor. among them, the medium and long-term loans of enterprises improved slightly, and the medium and long-term loans of residents continued to decline significantly. This is consistent with the weak commercial housing sales data and land acquisition data of industrial enterprises observed by us, which means that the medium and long-term financing demand of the real economy has not been improved. The sustained and substantial improvement of social finance growth in the future depends on the concentrated implementation of steady growth measures to boost the demand end.
generally speaking, 2022 is a great year of steady growth. At present, the growth rate of new social finance has become positive and will continue to rise. The focus in the future lies in the rhythm of the implementation of steady growth policies. according to past experience, the national two sessions in early March are an important window for steady growth and concentrated force. However, under the policy tone of “moderately ahead of infrastructure construction investment”, the possibility of force in advance is not ruled out. Once there is a clear steady growth action, the market may deduce to the stage of steady growth. At this stage, the strength of steady growth policies is often higher than expected. Typical Pro cyclical undervalued industries such as coal / non-ferrous metals / banking / non-bank have better performance and dominant market style.
● new social finance positive and A-share turnaround
We previously discussed the theory of four cycles and syllogism of A-Shares in a report. The growth rate of new social finance (based on the six-month moving average as the calculation standard) has a cycle operation law of about 40 months. Every 40 months or so, the growth rate of new social finance will become positive and accelerate upward to enter the upward cycle. As the growth rate of new social finance becomes positive and enters the upward cycle, A-Shares will also start the upward cycle of two and a half years. Of course, after the growth rate of new social finance turns negative, the performance of A-Shares will be more flat, and even the possibility of withdrawal can not be ruled out. In this way, A-Shares have a periodic operation law of about three and a half years.
After the last positive growth rate of new social finance in January 2019, A-Shares entered an upward cycle of about two and a half years from the first quarter of 2019 to the second half of 2021. The CSI 300 index entered the adjustment cycle from February last year, the CSI 500 index entered the adjustment cycle from September last year, and the Wande a index entered the adjustment cycle from the end of last year.
At present, the CSI 300 index has been adjusted for more than one year, and the CSI 500 index has been adjusted for nearly half a year. The latest growth rate of social finance became positive, at 6.6%. A shares ushered in a very important turnaround.
The five important lows in the history of A-Shares occurred in September 2005, December 2008, the end of 2012, January 2016 and January 2019 after the growth rate of new social finance became positive, and A-Shares saw a bottom within a quarter. However, September 2005, December 2008 and January 2019 are the months when the growth rate of new social finance becomes positive, and A-Shares rise sharply. However, the market bottomed out in September 2012 and January 2016, one quarter behind the time when the growth rate of new social finance becomes positive. Where does this difference come from?
Another report we released earlier, “how do A-Shares go after the deviation of China US monetary policy? What is the bottom signal?” In, it has been described that the growth rate of new social finance, as the most important key indicator affecting A-Shares in China, plays a forward-looking role in judging a shares. However, since China gradually enters an open capital market after 2012, global capital flows also play a great role in a shares. During the deviation of monetary policies between China and the United States, there is devaluation pressure on RMB, Thus, when the exchange rate of A-Shares has not stabilized and the monetary policy of the United States has not been significantly loose, it will face the impact of external liquidity shocks and risk appetite brought by external liquidity shocks.
At present, inflation in the United States has continuously exceeded market expectations, with CPI reaching 7.5% in January, which strengthens the expectation of interest rate hike in March. CME data shows that the market’s expectation probability of 50 BP interest rate hike by the Federal Reserve in March has increased to 93.75%.
At present, the interest rate difference between China and the United States has narrowed to 80bp. Historically, the interest rate difference between China and the United States has also had a certain impact on a shares, especially heavyweights. The trend of the Shanghai and Shenzhen 300 index has converged with the interest rate difference between China and the United States. At the same time, the relatively large adjustment in history has repeatedly narrowed the interest rate difference between China and the United States to less than 120 BP. After the beginning of the year, The market’s expectation that the yield spread of China US 10-year Treasury bonds will be adjusted to less than 100bp continues to strengthen, which brings concerns about the impact of global capital flows on a shares.
As mentioned above, the positive growth rate of new social finance is used as a Chinese factor to guide the bottom of a shares. However, A-Shares do not necessarily see the bottom in the month when the new social finance growth rate turns positive. We have to consider the external environment. Historically, the bottom of Shanghai Stock exchange 50 Index in September 2012, the bottom of index in January 2016 and the bottom of index in January 2019 are similar, The Federal Reserve released a dove signal, the US bond yield accelerated downward, the interest rate gap between China and the United States expanded rapidly, and A-Shares bottomed out accordingly and entered the upward cycle.
● summary
A shares are affected by internal and external factors. A shares perform well in the positive growth rate of new social finance and entering the upward cycle stage; At the same time, A-Shares are also affected by external factors. After the interest rate difference between China and the United States bottomed out, A-Shares bottomed out; With the widening interest rate gap between China and the United States, A-Shares have entered an upward cycle; Previously, there was a major adjustment in a shares. On the one hand, the growth rate of new social finance continued to be negative, resulting in adverse changes in the market’s expectation of enterprise profit growth. In addition, due to the high inflation in the United States and the continuous release of hawkish signals, the yield of 10-year Treasury bonds in the United States accelerated upward, and the interest rate gap between China and the United States narrowed rapidly, strengthening the risk of capital outflow. After the beginning of the year, the chip structure of superimposed A-Shares deteriorated, and there was a greater adjustment under the positive feedback mechanism.
In January 2022, the growth rate of new social finance will officially become positive, and the pessimistic expectation of enterprise profit growth will be gradually revised. We believe that this year is a big year of stable growth. Therefore, the subsequent new government will introduce a series of measures to stabilize growth and social finance, and the growth rate of new social finance will gradually enter the upward cycle, which will be conducive to the stability of market sentiment. However, at present, inflation in the United States exceeded expectations in January. The expectation of raising interest rates in March is clear and it is possible to raise interest rates by 50bp. The expectation of raising interest rates this year is still rising. The yield of 10-year Treasury bonds in the United States is still in the process of upward, coupled with the influence of other external political factors. At present, external factors have always disturbed the risk appetite of a shares. We believe that after the Federal Reserve raises interest rates in March, the market will further observe whether the Federal Reserve will be more hawkish. If there is a dove voice in April and may, US bond yields have entered the downward channel, and the interest rate gap between China and the United States has widened again. It is possible to see the bottom in April and may. We tend to think that the Fed will not raise interest rates in the second half of the year.
Looking forward to the whole year, we maintain the view that A shares are stable before rising and the trend pattern of the whole year is similar to “√” . 2022 may be the year when the steady growth policy is launched. After the second quarter, A-Shares may start a new upward cycle. During the year, the traditional steady growth undervalued direction represented by financial, real estate and building materials will bring a phased style drift of 2-4 quarters of the larger market value. however, the style differentiation is less obvious than that in the past few years. In addition to the valuation and repair market in traditional fields, the direction of steady growth should also focus on the undervalued sectors in new infrastructure (new energy infrastructure and digital infrastructure). this year, investors can focus on using the “depression strategy”, pay more attention to the depression with low allocation and low expected undervalued value, “undervalued value + transformation” may also be an important idea for stock selection. from February to March, the opportunities of industrial metals, petroleum, petrochemical and cement brought by the continuous rise of bulk prices can be mainly considered.
02
recovery · internal view – sharp differentiation between growth and steady growth
Most of the major A-share markets rose this week, with the largest increase in the market value, small market value and Shanghai stock index, and the largest decrease in the gem index, large market growth and technology leading index. This week, the A-share market is mainly biased towards value style, such as large market value, small market value and other value style indexes, with the largest increase in the gem index and large market growth.
From the perspective of transaction, the average transaction this Sunday was 915.38 billion yuan, with a large amount of daily transaction compared with the week before the festival. The net inflow of southbound funds into Hong Kong shares this week was HK $5.09 billion, and the net inflow of northbound funds into A-Shares this week was RMB 10.74 billion.
The main reasons for the style differentiation of the A-share market this week are: 1) China’s credit data exceeded expectations, and investors’ expectations for steady growth were further strengthened; 2) with US inflation exceeding expectations and US debt breaking 2, global investors’ expectations for interest rate hikes were further strengthened on the original basis, and growth stocks were under the pressure of downward valuation, The pressure of declining profits in China also makes investors worried about the sustainability of the growth sector with high growth last year.
From the perspective of industry style, coal, petroleum and petrochemical and building decoration ranked first in the industry index. The industries with the highest decline were power equipment, electronics, medicine and biology. From the reasons for the rise and fall, most of the industries with the highest growth this week were related to steady growth, such as building decoration, building materials, steel, etc. This week, investors’ expectations for China’s steady growth continued to strengthen, and companies in sectors related to steady growth continued to rise. Growth sectors, such as new energy, electronics and biomedicine, led the decline. Most of these sectors were those with rapid performance growth and continuous upward valuation in previous years. The valuation of the growth sector has suffered obvious pressure under the current environment of enhanced expectations of steady growth, strengthened expectations of overseas interest rate hikes and US bond yields breaking 2.
03
meso · boom – the turnover of civil aviation passengers increased in December, and the prices of resource products such as billet, rebar and power coal increased this week
In December of , the year-on-year growth of PCB orders in North America expanded, and the year-on-year growth of PCB shipments narrowed. in December, PCB shipments in North America increased by 0.9% year-on-year, 1.6% lower than that of the previous month.; In December, the number of PCB orders in North America increased by 47.1% year-on-year, 19.8 percentage points higher than that of the previous month.
The year-on-year increase of PCB in North America in December was 456}. in December, the value of PCB BB in North America in that month was 1.55, a year-on-year increase of 47.62%, an increase of 11.43 percentage points over the same period last month.
From January to December, the cumulative year-on-year growth rate of Telecom main business income narrowed. from January to December, the cumulative revenue of Telecom’s main business was 1465 billion yuan, an increase of 8% year-on-year, 0.1 percentage point lower than that from January to November.
the film box office revenue, the number of film viewers and the number of film shows decreased. as of January 23, the box office revenue of the film this week was 355 million yuan, down 23.27% on a weekly basis; The number of people watching the film was 9.4208 million, down 22.03% on a weekly basis; The film was released 2.295 million times, down 2.16% on a weekly basis.
the average price of Huaxia sun double offset paper (70g) and coated paper (128-157g) in South China rose in January. in January, the average price of Huaxia sun double offset paper (70g) in South China was 6000.00 yuan / ton, unchanged month on month, with a year-on-year increase of 2.56%; The average price of Huaxia sun coated paper (128-157g) in South China was 6700.00 yuan per ton, unchanged month on month, with a year-on-year increase of 21.27%.
the turnover of civil aviation passengers and civil aviation cargo and mail increased in December. The passenger turnover of civil aviation in December was 40.791 billion person kilometers, up 29.16% month on month; Civil aviation cargo and mail turnover was 2.498 billion ton kilometers, up 4.31% month on month.
the prices of billet, rebar and iron ore rose this week. as of February 11, the billet price index rose 4.67% week on week to 4752.0 yuan / ton; The price of HRB400 20mm deformed steel bar in China increased by 4.46% to 5032.0 yuan / ton on a weekly basis; The iron ore price index rose 0.46% week on week to 529.09.
the futures prices of coke, coking coal and thermal coal rose. as of February 11, coke futures prices rose 4.70% week on week to 3154.5.0 yuan / ton; Coking coal prices rose 6.09% week on week to 2405.0 yuan / ton; The price of thermal coal futures rose 7.60% week on week to 840.8 yuan / ton.
04
number of Funds – foreign capital flows back, and fund issuance is still slow
From the perspective of the capital flow throughout the week, the capital going north this week showed a net inflow trend, the financing capital turned into a net inflow, the scale of the newly established partial share public offering fund decreased significantly, and the ETF continued to make a substantial net subscription. Specifically, the net inflow of funds going north this week was 10.74 billion yuan; The total net outflow of financing funds in the first four trading days was 3.91 billion yuan; 4.7 billion partial equity public funds were newly established, a significant decrease over the previous period; ETF continued its net subscription, corresponding to a net inflow of 5.8 billion yuan.
from the perspective of net subscription of ETF, the net subscription of ETF, wide refers to half of the application and redemption of ETF, of which the subscription of ETF on GEM (including gem 50) is more, and the redemption of SSE 50 ETF is more; ETFs in the industry are mainly net subscription, among which pharmaceutical ETFs are more subscribed and securities companies are more redeemed. specifically, the overall net subscription of equity ETFs was 8.17 billion. Among them, CSI 300, gem ETF, CSI 500etf, SSE 50ETF and mass entrepreneurship and innovation 50ETF have net redemption of 640 million, net subscription of 1.33 billion, net redemption of 30 million, net redemption of 700 million and net subscription of 1.28 billion respectively. In terms of industry, the net subscription of information technology ETF was 1.55 billion; Net redemption of 400 million consumer ETFs; Net subscription of 2 billion pharmaceutical ETFs; Net redemption of ETFs by securities companies was 2.14 billion; Net subscription of financial real estate ETFs was 670 million; Net subscription of 660 million military ETFs; Net subscription of ETF for raw materials: 70 million; The net subscription of new energy & Intelligent Vehicle ETF was 1.43 billion.
the scale of the newly established partial stock public offering funds this week fell compared with the previous period, with 4.7 billion partial stock funds newly established.
this week (February 6-february 10), the net inflow of funds going north was 10.74 billion yuan, which changed from a large net outflow in the early stage to a net inflow. in terms of industry preference, banks, non bank finance and non-ferrous metals with higher net purchase scale of northbound funds, with net purchases of 7.21 billion yuan, 5.75 billion yuan and 2.9 billion yuan respectively; Concentrated sales of electrical equipment, computers, medicine and biology, with a net sales scale of – 3.18 billion yuan, – 3.02 billion yuan and – 2.35 billion yuan.
In terms of individual stocks, those with higher net purchase scale of northbound funds are Ping An Insurance (Group) Company Of China Ltd(601318) , China Merchants Bank Co.Ltd(600036) , Zijin Mining Group Company Limited(601899) ; Higher net sales include Contemporary Amperex Technology Co.Limited(300750) , Longi Green Energy Technology Co.Ltd(601012) , Ganfeng Lithium Co.Ltd(002460) .
In terms of financing and financing, the net inflow of financing funds in the first four trading days was 3.91 billion yuan. from the perspective of industry preference, financing funds focused on buying computers this week, with a net purchase amount of 2.15 billion yuan. Other industries with the highest net purchase scale mainly include electrical equipment, building decoration, electronics, etc; The net sales are mainly chemical industry, public utilities, mining, etc.
From the perspective of individual stocks, the higher financing net purchases of individual stocks include Contemporary Amperex Technology Co.Limited(300750) , Byd Company Limited(002594) , Muyuan Foods Co.Ltd(002714) , and the higher net sales mainly include Kweichow Moutai Co.Ltd(600519) , Zhejiang Yongtai Technology Co .Ltd(002326) , China Merchants Bank Co.Ltd(600036) .
from the perspective of capital demand, the scale of net reduction of important shareholders is reduced; The planned reduction scale increased slightly. this week, major shareholders increased their holdings in the secondary market by 930 million yuan, reduced their holdings by 4.99 billion yuan, reduced their net holdings by 4.06 billion yuan, and reduced the scale of their net holdings. Among them, the industries with higher net holdings include electronics, non-ferrous metals, comprehensive, etc; Industries with high net reduction scale include automobile, medicine and biology, real estate, etc. The planned reduction announced this week was 14.6 billion yuan, up from the previous period.
05
theme · wind direction – release of the 14th five year plan for financial standardization, focusing on the digital RMB
The market rose this week. The wind all a index rose 1.24% weekly, the gem index fell 5.59%, and the Shanghai and Shenzhen 300 rose 0.82%. The top gainers this week were coal, digital currency, home textiles and other related topics.
The theme events worthy of attention this week and next week are:
(1) AI — serving the interpretation of Winter Olympic sign language, Tencent successively launched 3D digital Homo sapiens listening and XiaoCong
On February 5, Tencent 3D sign language digital Homo sapiens “listening” was launched on CCTV to provide AI sign language translation services for the Beijing Winter Olympic Games. It is reported that “listening” is jointly created by Tencent cloud microenterprises and PCG AI and other technical teams. So far, the vocabulary and sentence coverage of “listening” has exceeded 1.6 million, and targeted optimization has been carried out for sports events, with sign language intelligibility of more than 90%. In addition, XiaoCong, a Tencent 3D sign language digital person who explains for the hearing-impaired, will also launch Tencent sports.
(2) power batteries – eight departments including the Ministry of industry and information technology: promote the safe echelon application of waste power batteries in the fields of power backup, charging and replacement
On February 10, eight departments including the Ministry of industry and information technology issued the implementation plan for accelerating the comprehensive utilization of industrial resources. The scheme proposes to improve the management system and strengthen the whole life cycle traceability management of power batteries of new energy vehicles. Promote cooperation between upstream and downstream of the industrial chain to jointly build recycling channels and build a cross regional recycling system. Promote the safe echelon application of waste power batteries in the fields of power backup, charging and replacement. Build a number of echelon and recycling demonstration projects in key areas such as Beijing Tianjin Hebei, the Yangtze River Delta, Guangdong, Hong Kong and Macao Bay area. Cultivate a number of echelon and recycling backbone enterprises, and strengthen the R & D and promotion of technologies such as nondestructive testing of power batteries, automatic disassembly and efficient extraction of valuable metals.
(3) green energy – two sectors: promoting the construction of an energy supply system dominated by clean and low-carbon energy
On February 10, the national development and Reform Commission and the National Energy Administration jointly issued the opinions on improving the institutional mechanisms and policies and measures for green and low-carbon energy transformation, which proposed to promote the construction of an energy supply system dominated by clean and low-carbon energy. Focusing on deserts, Gobi and desert areas, accelerate the construction of large-scale wind power and photovoltaic power generation bases, and explore the establishment of a mechanism for coordination between the sending and receiving ends to provide regulation for new energy power transmission. Strengthen the top-level design of the new power system, promote the clean power source and the electrification of terminal energy consumption, formulate the development strategy and overall plan of the new power system to meet the needs of the development of new energy power, and encourage all kinds of enterprises and other entities to actively participate in the construction of the new power system. Assess the adaptability of the existing power system to green and low-carbon development. Promote the construction of a unified green product certification and identification system. Establish the promotion mechanism of electric energy substitution, and strengthen the technical guidance of electric energy substitution by improving relevant standards. Improve and promote green power certificate trading and promote green power consumption. Encourage the whole society to give priority to the use of green energy and the purchase of green products and services. All regions should adopt advanced energy efficiency and green energy consumption standards, vigorously publicize the concept of energy conservation and green consumption, and carry out in-depth actions to create a green life. Encourage qualified places to carry out demonstration construction of high-level green energy consumption, and advocate energy conservation in the whole society.
(4) electronic cigarette — Yueke initiated the first clinical study on the safety of electronic cigarette in China
On February 7, the clinical study on the safety of e-cigarette initiated by relx Yueke (fog core technology) has been successfully registered in the first level organization of the international clinical trial registration platform of the World Health Organization – China Clinical Trial Registration Center (ChiCTR). It is reported that this is the first clinical study focusing on the “safety of electronic cigarette” in China and the second clinical research project initiated by Yueke. In March 2021, Yueke successfully applied for the first clinical study of electronic cigarette in China.
(5) prefabricated dishes – Ministry of Commerce: during the Spring Festival, the sales volume of prefabricated dishes on the takeout platform increased by more than three times year-on-year, and the consumption of ice and snow increased rapidly
On February 10, Gao Feng, a spokesman for the Ministry of Commerce, said that during the Spring Festival this year, China’s consumer market operated smoothly and improved its quality. First, the sales of quality goods are booming. Smart goods, flowers, green plants, organic food and other health and quality upgrading goods have become the first choice for new year goods. Second, catering consumption has gradually warmed up. The sales volume of prefabricated vegetables on some take out platforms increased by more than three times year-on-year, and the catering transaction volume on some large e-commerce platforms increased by nearly 10% year-on-year. Third, ice and snow consumption is heating up rapidly. The consumption of ice and snow parks and ice skating rinks in Beijing has gradually increased, and the consumption of snow and ice skating rinks and ice skating rinks in winter has gradually increased. Fourth, leisure consumption is deeply favored. During the Spring Festival, suburban tours, inner city tours, folk customs and exhibitions have become consumption hotspots.
(6) automatic driving – California transportation administration released the annual automatic driving data of 2021, the first in China and the United States to play home
On February 10, the California transportation administration DMV released the new automatic driving data for the whole year of 2021. Among the 13 automatic driving companies that released the data, 7 were Chinese companies and 6 were American companies. Among them, autox Antu ranks first with 50108 MPI (miles per intervention), and crusie and didi of GM rank second and third with MPI 41719 and MPI 40744. In terms of the size of the self driving fleet, Google’s waymo ranks first with 693 vehicles, while the other two Chinese companies, autox Antu and pony AI pony Zhixing ranked fourth and fifth respectively.
(7) 5g – a new round of construction plans were issued by various parties, and 5g new infrastructure was moderately deployed in advance
On February 9, many departments, including the Ministry of industry and information technology and the national development and Reform Commission, made it clear that 5g, data center and other new infrastructure construction would be deployed moderately in advance. More than 20 provinces (autonomous regions and cities), including Shanghai, Fujian, Sichuan, Hunan and Anhui, have defined the construction plans of 5g and data center in 2022, and proposed to further give play to the scale effect and driving role of “new infrastructure” such as 5g, so as to create an important engine of economic growth. According to the data of the Ministry of industry and information technology, by the end of 2021, the number of 5g base stations across the country had exceeded 1.4 million, including more than 800000 jointly built and shared 5g base stations. 5g network has covered all prefecture level cities, more than 98% of County cities and 80% of township towns, and the breadth and depth of network coverage have been continuously improved.
(8) Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816) – the State Council: tackling key agricultural core technologies and strengthening the construction of agricultural strategic scientific and technological forces
On February 11, the State Council issued the “14th five year plan” for promoting agricultural and rural modernization, which proposed to focus on key areas such as biological breeding, cultivated land quality, Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816) , agricultural machinery and equipment, agricultural green inputs and accelerate the research and development and innovation of a number of key core technologies and products. Accelerate the research on the causes, transmission mechanism and pathogenesis of meteorological environment of animal diseases and crop diseases and insect pests, and improve the ability of major agricultural risk prevention and control and industrial safety guarantee. Strengthen the construction of the national modern agricultural industrial technology system. We will deepen the reform of the agricultural science and technology system and promote the integrated allocation of projects, bases, talents and funds in key areas. Strengthen the construction of high-level agricultural scientific research institutions, cultivate and expand a number of leading agricultural enterprises, and optimize the construction of local agricultural scientific research institutions and innovation teams. We will encourage qualified areas to carry out actions to upgrade rural household appliances, implement subsidies for furniture and home decoration to the countryside and a new round of automobile to the countryside, and promote the upgrading of durable consumer goods for rural residents. Improve the infrastructure construction of charging and changing electricity in the county and central towns. Support the expansion of new consumption formats and models such as online shopping and mobile payment to rural areas, and enhance the Consumption Willingness of rural residents.
(9) photovoltaic hydrogen production – Xinjiang: focus on promoting 20000 tons of photovoltaic hydrogen production and other major projects in 2022
On February 4, the work report of Xinjiang government was released, which mentioned that in 2021, the development of resource intensive industries will accelerate, the output of raw coal will increase by 18.3%, the export volume of Xinjiang coal will increase by 59.3%, the total power supply of the whole society will increase by 13.58%, of which new energy accounts for 19.8%, the export power will be 115.9 billion kwh, an increase of 20.7%, and the output of photovoltaic silicon-based new materials will be 469400 tons, an increase of 30.9%, Polysilicon production accounts for 58% of the country’s polysilicon production. Support the accelerated development of strategic emerging industries, support the independent innovation and development of key enterprises such as equipment manufacturing industry, promote the further expansion of photovoltaic silicon-based industry, and attract a number of electronic component enterprises to settle in Xinjiang. In 2022, we will focus on promoting the construction of “three bases and one channel”, focusing on the construction of a number of major projects such as the trillion cubic meter atmospheric area on the north slope of Tianshan Mountain and the 20000 ton photovoltaic hydrogen production of Sinopec Kuqa, and actively promote the preliminary work of a number of key projects such as 1.2 million tons of ethane to ethylene of Dushanzi Petrochemical and 1 million tons of ethylene of Sinopec Tahe refining and chemical company; Promote the extension and supplement of new silicon-based materials to downstream industries such as photovoltaic, silicon alloy, silicon chemical industry and silicon electronics; Accelerate energy construction. Relying on the desert Gobi, build a large-scale wind power photovoltaic power generation base, and accelerate the construction of new energy power generation, pumped storage, electrochemical energy storage and digital smart grid projects.
(10) Ultra HD Video – behind the Winter Olympics, China’s intelligent technology is taking off
On February 4, the opening ceremony of the 2022 Beijing Winter Olympic Games was successfully held, presenting an unparalleled visual feast to the people of the world. The whole process of the opening ceremony of the Beijing Winter Olympic Games used digital performance and simulation technology, which was first simulated in the virtual bird’s nest (National Stadium) and finally landed in the real world. Through the comprehensive use of various scientific and technological achievements such as artificial intelligence, 5g, AR, naked eye 3D and cloud, the effect of “less people but not empty, ethereal and romantic” was realized. This is also the world’s first large-scale application of 8K technology for live broadcast of the opening ceremony and coverage of key events. It will present an immersive visual feast of ice and snow in an all-round way with 5g network. In addition, the large ground screen of the whole bird’s nest realizes full led image for the first time to replace the traditional ground screen projection, and the image quality reaches 16K. The stage floor of the opening ceremony is the largest 8K ultra-high definition ground display system at present, with an overall area of 10393 square meters. BOE adopts multiple picture fusion technology with 8K + resolution. The ultra-large-scale optical correction algorithm can carry out pixel level optical correction for each display picture, showing 100000:1 ultra-high contrast and 3840hz ultra-high refresh rate, And 29900×15096 ultra-high resolution Ultra HD gorgeous pictures. Supported by Intel 3dat computer vision motion capture technology and AI real-time video special effects of teachers and students in the sound School of Beijing Film Academy, with advanced AI algorithms, the technical team can cover the whole audience through only four cameras to realize the real-time interaction between actors and the large screen laid on the scene.
this week’s industrial observation – the release of the “14th five year plan” for financial standardization, focusing on the digital RMB
● the 14th five year plan for financial standardization and the Winter Olympic Games jointly catalyze the digital currency market
On February 8, the people’s Bank of China, together with the State Administration of market supervision, the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission, jointly issued the 14th five year plan for the development of financial standardization. The article defines seven aspects, a total of 28 subdivision tasks. Among them, in the part of standardization leading the construction of digital ecology in the financial industry, the plan focuses on steadily promoting the standard development of legal digital currency.
The plan proposes to comprehensively consider the safe and trusted infrastructure, issuance system and storage system, registration center, payment transaction communication module, terminal application, etc., and explore the establishment and improvement of legal digital currency infrastructure standards. Research and formulate the information security standards of legal digital currency to ensure the storability, unforgeability, non repeatable transaction and non repudiation in the process of circulation. Study and formulate legal digital currency business and application standards, and establish standardized processes for issuance, circulation and withdrawal. This time, the four departments jointly issued a document to promote the development of digital currency standards and catalyze the digital currency market.
the pilot of digital currency in the recent Winter Olympic Games is also one of the reasons for catalyzing the digital currency market. at present, the Winter Olympic Games has piloted and deployed innovative application scenarios such as unmanned vending vehicles, self-service vending machines and unmanned supermarkets, and launched wearable devices such as payment gloves, payment badges and Winter Olympic payment clothes. The stability and effectiveness of the RMB digital system have been verified. According to the latest data of the central bank, by the end of 2021, there had been more than 8.0851 million digital RMB pilot scenes, six times the number of scenes six months ago.
● why does the central bank issue digital currency?
Why should the central bank issue digital currency when electronic payment is so convenient and popular today? The main reasons are as follows:
(1) protect their monetary sovereignty and legal currency status. from the perspective of future development trend, paper money has low information technology content and low security. On the one hand, the emergence of DCEP meets the public’s demand for safety; On the other hand, the emergence of private digital currencies such as Libra has undoubtedly sounded an alarm for national monetary sovereignty. When Libra develops well as a payment instrument, it may further break away from reserve assets and become a credit currency, and then develop into a world-class super sovereign currency, which will have a great impact on a country’s monetary policy and sovereignty. Mu Changchun, the current director of the Monetary Research Institute of the central bank, also said that “the primary purpose of issuing the central bank’s digital currency is to protect monetary sovereignty”. in addition, at present, China’s cross-border clearing still relies heavily on the global Interbank Financial Telecommunication Association (Swift) and the interbank payment system (chips) of the New York Clearing House of the United States. The issuance of digital currency by the central bank is expected to get rid of its dependence on the existing swift and chips payment system and bring convenience to the circulation and internationalization of RMB.
(2) greatly reduce the issuance and circulation cost of banknotes and coins and improve the efficiency of payment and clearing.
an important purpose of DCEP issued by the Central Bank of China as M0 is to save the issuance cost of paper money. At present, the cost of printing, issuing, circulating and storing paper money and hard pen is very high, and the cost of anti-counterfeiting and carrying is very high. The central bank’s digital currency can not only maintain the cash attribute and value characteristics, but also meet the requirements of convenience and security. It helps to improve the payment system and improve the efficiency of payment and clearing.
(3) improve the central bank’s control over money supply and circulation. the currency currently in circulation is completely anonymous, and the central bank cannot track the details of the transaction. The central bank’s digital currency can realize the accurate tracking of money, enable the central bank to have a more timely and accurate grasp of the circulation of money and the operation of macro-economy, and improve the effectiveness and accuracy of policies. The central bank improves its control over money supply and circulation through big data. It is conducive to reducing illegal and criminal acts such as money laundering and tax evasion.
● global central banks are launching a digital currency competition
Since 2020, central banks around the world have accelerated the research and testing of central bank digital currency. In terms of progress, the United States has changed its attitude and issued a white paper. Europe, France, Ukraine, Lithuania and Sweden have made rapid progress and have completed experimental tests with different progress, while Asia, Japan and South Korea all said to start the test next year. In terms of technical route, Sweden, South Korea and Lithuania all use blockchain technology to varying degrees, while other countries reserve the possibility of not using this technology. The Central Bank of China maintains technology neutrality and commercial banks choose their own technology. In terms of operation mode, Sweden and the United States have built a double-layer structure similar to China, Japan and South Korea have also issued indirectly through intermediaries, Lithuania is directly sold in the central bank in the nature of commemorative coins, and other countries are still discussing.
On the whole, catalyzed by events such as the pilot of digital currency in the Winter Olympics and the release of the 14th five year plan for financial standardization, digital currency performed well last week. For the world’s major central banks, the introduction of digital RMB is inevitable due to the consideration of protecting monetary sovereignty and legal currency status, reducing money issuance costs, improving control over money supply and circulation, and the pressure brought by the introduction of Libra. At present, China’s digital currency has entered a large-scale pilot stage, and the digital RMB is ready to emerge. It is suggested to continue to pay attention to the sector investment opportunities catalyzed by subsequent events.
06
data · valuation – overall A-share valuation upward
the valuation level of all A-Shares rose this week. as of the closing on February 11, all A-share PE (TTM) rose 0.3x to 15.6x, in the quantile of 46.7% of the historical valuation level. Gem fell this week, with PE (TTM) falling 2.1X to 42.7x, in the 29.5% quantile of historical valuation level. The Shanghai and Shenzhen 300 index PE (TTM), which represents large cap stocks, rose 0.3x to 12.7x this week, in the 65.5% quantile of the historical valuation level. The China Securities 500 index PE (TTM), which represents small and medium-sized stocks, rose 0.5x to 16.9x this week, in the 3.5% quantile of the historical valuation level.
in terms of industry valuation, the valuation of the sector rose and fell this week. Among them, the valuation of the leisure service sector rose more, with an increase of more than 3.5x, and the electrical equipment sector fell significantly, with a decrease of more than 3.5x. among them, the leisure service sector rose 3.9x to 49.2x, in the historical quantile of 61.2%; The valuation of the electrical equipment sector fell 3.9x to 41.6x, in the historical quantile of 83.3%. As of the closing on February 11, the top five industries in the valuation of primary industries were national defense and military industry, computer, leisure services, electrical equipment, food and beverage.
