Core view
A shares rose sharply this week, and the differentiation of individual stocks was obvious. Shanghai stock index and CSI 300 closed red, China Securities 1000 and gem composite adjusted significantly, and the ranking performance of machinery industry was poor. We believe that in the first quarter of 2022, the pressure on China’s economy to maintain growth continued to increase, and the performance of export-oriented manufacturing industry was better than expected, but the boom fell month on month. From the perspective of fundamentals, in 2022, we need to pay close attention to digitization and intelligence, double carbon goal and greening, internal circulation construction and supply chain reconstruction, which are three clear major trends at present and in the future. We focus on China’s new infrastructure of digital economy and advanced manufacturing special equipment such as new energy and semiconductors The performance recovery exceeded expectations and the targets related to the localization of alternative basic parts continued to be strengthened in the 14th five year plan.
This week is the second week of February 2022. Coal, petroleum and petrochemical, architectural decoration, steel and nonferrous metals, banking and other sectors performed best, while power equipment, electronics, medicine and biology, automobile, national defense and military industry and other sectors performed worst. Among the concept sectors, coal mining, western infrastructure, cement manufacturing, digital currency and insurance performed best, mainly because the market was worried about economic growth in the first quarter, and the government was expected to increase support for growth protection policies, mainly focusing on new and old infrastructure related sectors; Cro, power supply equipment, Nanjing combination, photovoltaic inverter, energy storage and power battery and other sectors performed the worst. The main reason may be that the leading stocks of medicine and lithium battery made up for the decline, mostly due to the negative feedback brought by the trading congestion of the fund in the past two years.
This week, the market itself still focused on the traditional infrastructure related sectors, as well as the financial and non banking industries under the expectation of loose liquidity. Over the past two years, the over – rising sectors of pharmaceutical, new energy and Baijiu have been making up a huge amount of negative feedback. The market still shows the trend of rapid rotation of rise and fall, killing fall over rise and making up rise over fall, which is expected to continue.
Short term capital behavior does not change the medium-term trend. Investors should choose appropriate strategies and investment cycles according to the nature of funds. January is still a relatively empty window period, and the news was originally relatively flat, but various industrial policies and news have become the largest variable in the market. China’s green development concept and strategy are determined, followed by the implementation of the dual carbon strategy in all parts of the industrial and energy system. Dual carbon is still the focus of the capital market, and the relevant benefit tracks will still be the focus of capital allocation. Commodity prices have stabilized, liquidity is expected to improve, market risk appetite is good, and market activity continues.
We believe that the downside systemic risk of the market next week is still limited, but the sustainability of the main line of hot spots related to maintaining market growth in the near future remains to be observed. If the sector rotation is too fast, we should control the position to defend and counterattack. The fundamental principle is to participate in the new hot spots as soon as possible, continue to avoid the sectors in which the funds hold together and rise excessively, and operate with the band idea. For fundamental investment, we still suggest to select those specialized special new sub industries with better performance than expected in 21 years and continuous prosperity in 22 years for medium-term or above allocation. Focus on allocating oversold stocks with good fundamentals, and pay attention to sectors with strong certainty and reasonable valuation. In the medium term, we will still focus on the growth technology manufacturing enterprises matching the growth and valuation and the new high-quality track sector under the dual carbon background. We will continue to optimize the investment logic related to the import substitution logic of relevant advanced manufacturing sectors such as aerospace military industry sector (civil military participation, missile), new energy (wind power, energy storage, hydrogen energy and nuclear energy) supported by performance or growth expectations, At the same time, we will continue to moderately hold the targets of the science and technology sector (third-generation semiconductor, big data, automotive intelligence, miniled and VR) at the inflection point of prosperity.
Relevant targets include: Guoanda Co.Ltd(300902) , Jade Bird Fire Co.Ltd(002960) , Zhejiang Fenglong Electric Co.Ltd(002931) , Chengdu Shenleng Liquefaction Plant Co.Ltd(300540) , Sichuan Crun Co.Ltd(002272) , Chengdu Leejun Industrial Co.Ltd(002651) , Kunshan Kinglai Hygienic Materials Co.Ltd(300260) , Tongyu Heavy Industy Co.Ltd(300185) , Shanghai Hugong Electric Group Co.Ltd(603131) , Sinoseal Holding Co.Ltd(300470) , Dongfang Electric Corporation Limited(600875) , Lanzhou Ls Heavy Equipment Co.Ltd(603169) , Houpu Clean Energy Co.Ltd(300471) , Anhui Yingliu Electromechanical Co.Ltd(603308) , Zhonghang Electronic Measuring Instruments Co.Ltd(300114) , China Oilfield Services Limited(601808) , Jiangsu Hengli Hydraulic Co.Ltd(601100) , Wus Printed Circuit (Kunshan) Co.Ltd(002463) , Shenzhen Fastprint Circuit Tech Co.Ltd(002436) , Suzhou Chunqiu Electronic Technology Co.Ltd(603890) , Shanghai Baolong Automotive Corporation(603197) , etc.
Market performance
This week, the Shanghai stock index rose 3.02%, the Shanghai and Shenzhen 300 rose 0.82%, the gem composite fell 4.06%, and the China Securities 1000 rose 0.87%. The wind tertiary industry index machinery industry fell 0.90%, ranking 54 / 62 in the industry growth week, outperforming the Shanghai Composite Index by 3.92 percentage points.
In the machinery industry of the wind tertiary industry index, the top five stocks in the week were Tangshan Jidong Equipment And Engineering Co.Ltd(000856) , Haimo Technologies Group Corp(300084) , Guizhou Wire Rope Co.Ltd(600992) , CSCEC technology and Tofflon Science And Technology Group Co.Ltd(300171) , with increases of 52.90%, 27.77%, 24.79%, 19.82% and 19.54% respectively. The top five stocks with declines were Shenzhen United Winners Laser Co.Ltd(688518) , Robotechnik Intelligent Technology Co.Ltd(300757) , Guoanda Co.Ltd(300902) , Ningbo Zhenyu Technology Co.Ltd(300953) and Qingdao Gaoce Technology Co.Ltd(688556) , with declines of – 23.36%, – 22.63%, – 19.94%, – 17.99% and – 17.66% respectively. The market index fluctuated slightly this week, and the performance of the machinery sector was poor. The top ten companies rose by more than 10%, and the top ten companies fell by more than 10%. The overall rise and fall of individual stocks in the industry were mixed.
Industry dynamics
\u3000\u30001. Luozi Guangzhou, Dongfang Electric Corporation Limited(600875) hydrogen energy territory re expansion (high tech hydrogen power)
\u3000\u30002. Russia’s nuclear power generation in January 2022 increased by 3.37% year-on-year ( China National Nuclear Power Co.Ltd(601985) information network)
Risk tips
The promotion and implementation of industrial policies are lower than expected, the change of market style has brought down the valuation center of the machinery industry, the pressure on profitability caused by rising costs, and the systemic risk caused by the spread of epidemic abroad.
