According to the annual report forecast currently disclosed, we can see the performance forecast of 2021 from three aspects:
First, from the distribution of performance growth of major broad-based indexes in the market in 2021, CSI 1000 > CSI 500 > CSI 300 > gem. The year-on-year growth rate of constituent stocks and performance forecast of CSI 1000 index was relatively high, up to 40%.
The forecast year-on-year growth rates of CSI 500 and CSI 300 indexes were 18% and 16% respectively. The growth rate of gem index was mainly affected by the pre reduction of performance of heavyweight stocks such as Walvax Biotechnology Co.Ltd(300142) , Wens Foodstuff Group Co.Ltd(300498) , Lens Technology Co.Ltd(300433) , and the forecast year-on-year growth rate was about 10%. Meanwhile, in the performance comparison of major stock indexes, represented by large market capitalization and blue chips, the performance growth of SSE 50 is relatively ahead.
The second aspect: from the perspective of sector distribution with better performance than expected. Individual stocks exceeding expectations (i.e. companies whose performance forecast net profit is greater than the consensus expectation) are mainly distributed in coal, banking, electronics, chemical industry and power equipment industries.
The third aspect: from the perspective of style, the performance of upstream cycle sector is better than midstream manufacturing and downstream consumption.
In the fourth quarter of 21, the high-end manufacturing performance of the upstream cycle and the midstream also continued to increase year-on-year. The trend of profit pressure in the midstream and downstream industries is slowing down, but the differentiation of internal performance is still obvious. By sector:
1) upstream cycle: under the circumstances of economic recovery, demand recovery and rising raw material prices, the profits of the cycle industry generally improved. However, the differentiation trend of performance in the fourth quarter has increased. The annual reports of most companies in the coal sector meet or exceed expectations, and the momentum of upward performance has continued, while the performance forecast of more than half of the enterprises in the steel sector is lower than expected.
2) midstream manufacturing: the appropriate fall in the price of some raw materials in 2021q4 has alleviated the cost pressure of midstream manufacturing to a certain extent. High end manufacturing such as power equipment and mechanical equipment maintained profit growth, and the performance forecast exceeded expectations, accounting for more than 30%. Among them, the auto sector is subject to the low base of Q3 with tight global chips, and its performance is expected to be repaired month on month. In the military industry sector, the composite growth rate of profits in the military electronics and electromechanical segments in the past two years is high, and the prosperity is expected to continue.
3) downstream consumption: due to the dual impact of cost pressure and frustration on the demand side caused by the recurrence of the epidemic, the growth rate of the food and beverage industry slowed down, and the internal performance of the consumption sector also showed obvious differentiation. In the epidemic, the profit growth of the pharmaceutical industry was the best, and both emerging and traditional household appliances in the household appliance industry contributed to the performance increment.
4) TMT: the growth rate of TMT sector rebounded sharply as a whole. In terms of electronics, the penetration rate of new energy vehicles continues to improve, and the upgrading of OTA of traditional automobile enterprises continues to contribute to the increment of automotive electronics. In terms of computer and communication, the layout of digital transformation and the evolution and upgrading of network infrastructure of some enterprises continue to bring new business opportunities and boost the performance of the industry. In terms of media, the epidemic has promoted the vigorous development of new economy such as short video and live delivery, and led to a significant recovery in the performance of the industry.
5) big finance: the performance of banks / non banks is stable, and the fundamentals of real estate are further deteriorated. Nearly half of the forecast stocks of banks and non bank finance exceeded expectations and performed relatively steadily. With the continuous deterioration of real estate fundamentals, although the real estate financing policy has been relaxed since 21q4, the proportion of real estate enterprise performance less than expected is still relatively high.
From the current performance and prosperity: the performance of petroleum, petrochemical and coal in the upstream cycle is up month on month; High end manufacturing in the field of new energy is the main field with high performance growth. Primary industries such as power equipment and mechanical equipment maintain a high boom. Among them, secondary industries such as electrical equipment, general equipment and new energy power system have the highest performance growth.
From the perspective of secondary industry segments, the high boom segments with positive performance growth and continuous improvement for two consecutive periods are concentrated in: white appliance II, agrochemical industry and diversified finance.
Key investment points: after combing the performance forecast of the annual report in multiple dimensions, from the perspective of fundamentals, we continue to recommend the sectors that pay attention to the sustained high growth rate of performance and the performance exceeding expectations: 1. Undervalued blue chips driven by the expectation of state-owned enterprise reform and maintained the sustained high growth of performance by relevant companies under the end of the year of “state-owned enterprise reform”, It is still the direction we continue to be optimistic about. 2) In the midstream manufacturing sector, considering the bright data on the investment side of advanced manufacturing industry in the past 21 years, combined with the forecast of the annual report, the subdivided fields of high-end manufacturing, intelligent manufacturing and high technical barriers also deserve continuous attention; 3) In the downstream consumption sector, it is recommended to continue to pay attention to the required consumption related varieties that have a good competition pattern in the industry and can quickly improve the profit margin under the expectation of price increase.
Risk warning: the disclosure of performance forecast is incomplete, the performance of listed companies is revised, the Omicron epidemic in China is more than expected, and the public information used in the research report may be delayed or not updated in time.
