In September last year, we first proposed that lard resonance is expected in 2022, and pushed the CPI to break 2.5% year-on-year in the second half of the year. In view of the current sharp rise in commodities and the resonance of lard, the upward risk of CPI in the second half of the year can not be ignored. This paper calculates the year-on-year trend of China's CPI under the two situations of "optimistic" and "conservative" with the same rise of lard this year, for your reference.
Our judgments on this year's oil price and pig price are as follows: the uncertainty of WTI crude oil price in the short term is high, but the probability of oil price breaking 100 from H2 this year to H1 next year is not low; Pork prices are expected to rebound from the bottom in Q2. Considering the risk of general rise in Shenzhen Agricultural Products Group Co.Ltd(000061) prices this year, pork prices may be slightly higher than the increase in previous pig cycles.
Forecast assumptions: 1) optimistic scenario: WTI oil price rose linearly from 92.3 US dollars / barrel in February to 100 US dollars / barrel in December; Since February, the pig price has linearly dropped from 23.2 yuan / kg to 18.9 yuan / kg in May, and then linearly rebounded to 35.2 yuan / kg in December. 2) Conservative situation: WTI oil price has remained at US $92.3/barrel since February to December; Since February, the pig price has linearly dropped from 23.2 yuan / kg to 18.6 yuan / kg in May, and then linearly rebounded to 30.0 yuan / kg in December.
Forecast results: 1) optimistic situation: this year, China's CPI will continue to rise from 0.9% in January to 4.0% in November, fall back to 3.7% in December, and the year-on-year average CPI is 2.4%. 2) Conservative situation: this year, China's CPI will continue to rise from 0.9% in January to 3.7% in November, fall back to 3.4% in December, and the annual average CPI is 2.3% year-on-year. In either case, the risk of Q3 China's CPI breaking 3% year-on-year is not low.
Q2cpi has little upward pressure. The equity market may welcome valuation repair, and the gem is expected to win at this stage. 1) Two internal causes: "de Ninghua" is completed; Q2 economy was relatively weak, and the end of the rebound of risk-free interest rate helped the valuation repair. 2) Two external factors: in March, Europe and the United States may return to the pre epidemic state, with sufficient expectations such as superposition and contraction, and the upward slope of 10-year US bond yield eased; The market panic of the US Federal Reserve's Q1 interest rate hike is expected to ease, and the rebound of US stocks led to the stop and stabilization of the subject matter of China's relevant industrial chain.
The risk of q3cpi breaking 3 rises, and the equity market may shift from valuation repair to mass consumption. Since the beginning of the year, the oil price and Shenzhen Agricultural Products Group Co.Ltd(000061) price have greatly exceeded our previous expectations. There is a high possibility of lard and Shenzhen Agricultural Products Group Co.Ltd(000061) resonance in China in the second half of the year. Furthermore, Q3 China's CPI may break 3% year-on-year or have a high probability. Once so, the main line of entering the Q3 equity market will shift from valuation repair to downstream consumption, in which mass consumption may be more concerned.
Risk warning: commodity price fluctuations exceed expectations; China's policy exceeded expectations.
