Strategy tracking: the index strengthened, and infrastructure related sectors led the rise again

Index tracking

[Shanghai and Shenzhen composite index] Shanghai Composite Index rose 0.57% to close at 3465.83 points; The Shenzhen Component Index rose 0.23% to close at 13376.36 points; The gem index rose 0.07% to close at 2818.40.

[industry tracking] industry: 25 industries rose and 5 industries fell. Among them, the building decoration, building materials and steel sectors led the increase, with an increase of 3.20%, 1.87% and 1.74% respectively; Defense and military industry, agriculture, forestry, animal husbandry and fishery, electronics and other sectors led the decline, with a decline of – 0.96%, – 0.80% and – 0.18%.

Comments

Building decoration and building materials were among the top gainers. On February 14, the Ministry of Finance announced the issuance of local government bonds in January this year, and has issued a new local government debt limit of 1788 billion yuan in 2022 in advance, including 328 billion yuan of general debt limit and 1460 billion yuan of special debt limit. The advance issuance of special bonds will strongly promote the growth of investment, and the new special bonds are expected to invest more in the field of infrastructure. Therefore, in this context, the building decoration, building materials and other sectors related to infrastructure have strengthened one after another. In terms of individual stocks, Hangzhou Landscape Architecture Design Institute Co.Ltd(300649) , Chengdu Road & Bridge Engineering Co.Ltd(002628) , Ningbo Construction Co.Ltd(601789) and other stocks rose by the limit.

The steel sector led the gains. On the demand side, under the development of infrastructure, the overall demand for steel is expected to rise in the future, while on the supply side, the supply side of the steel industry is expected to have limited increment under the background of “double carbon”; At the profit level, on the afternoon of February 15, the State Administration of market supervision, the national development and Reform Commission, the CSRC and other three departments held a “special meeting to remind and warn”. The price of iron ore fell, and the price of key raw materials fell, which is expected to reduce the cost of steel enterprises and release profits. Therefore, the sector strengthened. In terms of individual stocks, Hang Zhou Iron & Steel Co.Ltd(600126) rose 6.78%, Zhejiang Kingland Pipeline And Technologies Co.Ltd(002443) rose 3.64%, Nanjing Iron & Steel Co.Ltd(600282) rose 3.23%.

The concept of industrial mother machine is stronger. At the news level, the executive meeting of the State Council held on February 14 pointed out that industry and service industry play a backbone supporting role in economic development and stable employment. For new equipment and appliances purchased by small, medium-sized and micro enterprises with a value of more than 5 million yuan this year, one-time pre tax deduction can be made for depreciation of 3 years, and half deduction can be made for depreciation of 4, 5 and 10 years. We will extend the tax relief policy for small, medium-sized and micro enterprises in the manufacturing industry. The policy’s support for manufacturing enterprises led to the strengthening of the “industrial machine” sector. In terms of individual stocks, Hiecise Precision Equipment Co.Ltd(300809) , Qinghai Dinghua, Weihai Huadong Automation Co.Ltd(002248) and other stocks rose by the limit.

Outlook

Today, infrastructure related sectors strengthened again. From the recent actions of accelerating the issuance of special bonds and stabilizing the prices of key raw materials in multiple departments, the annual capital construction force has been relatively clear. From the perspective of valuation, the overall valuation of the capital construction sector is still relatively low, and there are still some allocation opportunities. Overall, although the current conflict between Russia and Ukraine has been alleviated, the uncertainty of overseas risk disturbance still exists. It is suggested that the allocation level pay more attention to the directions with performance support and policy force, such as nonferrous metals, infrastructure, green power, digital economy, etc.

Risk warning: the profit of the enterprise is less than expected; Increased volatility in overseas markets; Systemic risk

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