Key investment points
Zhou Du’s view: what are the main investment lines contained in the central economic work conference?
In terms of the interpretation of the central economic work conference, we believe that the macro policy adjustment under the “stability” is expected to increase: the stimulus space for infrastructure investment is opened under the expectation of fiscal policy, and the monetary policy once again clearly supports the directional loose attitude of small, medium-sized and micro enterprises and green enterprises. At the same time, once again state the overall deployment of “double carbon” to avoid sports carbon reduction; “Housing without speculation” is still the general tone of real estate regulation, but affordable rental housing investment or structural force point. As for the Enlightenment of investment opportunities in the capital market, we believe that green power (energy storage, power grid operation and transformation) under infrastructure investment, securities companies with comprehensive registration system reform, agricultural planting and state-owned enterprise reform may be the main line of the market in 2022:
1) Under the expectation of fiscal policy, the stimulus space for infrastructure investment is opened. It is a concrete measure to carry out infrastructure investment moderately ahead of schedule. At the press conference, the Finance Office of the people’s Republic of China interpreted this as “increasing investment in pollution reduction, carbon reduction, new energy and other fields, so as to expand short-term demand and enhance long-term momentum”, That is, green power (energy storage, power grid operation and transformation), especially those that can be combined with the three-year pilot reform of central enterprises, will be the real policy force point and market main line.
2) “Fully implement the stock issuance registration system” was written into the economic work arrangement of the central economic work conference for the next year for the first time, and high-quality leading securities companies with business competitive advantages may benefit first. We believe that the full implementation of the stock issuance registration system will become a key task of the capital market in 2022, and the securities sector may benefit from the implementation of the full registration system. Referring to the law before the implementation of the gem registration system last year, the market may maintain sufficient and reasonable liquidity and high risk preference before the major reform of the capital market. Since this year, the transaction volume of the A-share market has significantly increased to a higher level, and the high-quality leading securities companies with business competitive advantages may take the lead in benefiting.
3) The planting sector currently has dual expectations and policy catalysis for food security. In dealing with the supply shock, China’s role in ensuring resources and economic security may be more prominent. The meeting proposed that “we should put the improvement of comprehensive agricultural production capacity in a more prominent position, and the Chinese people’s rice bowl should be firmly in their own hands at all times.” Food security is the “ballast” of social and economic stability, superimposing the convergence trend of ppi-cpi. As the “agricultural chip”, seed industry is the front-end foundation of agricultural development. The planting chain benefits from the strengthening of price increase expectation and the improvement of concentration, with multiple positive factors.
4) In addition, thematic investment opportunities such as the reform of state-owned enterprises under the superposition of the “double carbon” strategy may also emerge. In the part of stimulating vitality through reform and opening up, it is clear that “we will complete the three-year action task of state-owned enterprise reform and steadily promote the reform of natural monopoly industries such as power grid and railway.” In the national overall arrangement of the dual carbon strategy, it is clear that “to ensure energy supply, large enterprises, especially state-owned enterprises, should take the lead in ensuring supply and stabilizing prices.” We believe that in the process of economic transformation to high-quality development, central enterprises and state-owned enterprises are given higher historical responsibilities, which will highlight their leading role in stimulating marketization and improving the efficiency of state-owned enterprises.
Risk tip: the transmission rate and mortality of the new mutant strain Omicron are higher than expected, the implementation of relevant reform policies in the field of common prosperity is lower than expected, and the public data used in the research report may lag behind or not be updated in time.
