Index tracking
[Shanghai and Shenzhen composite index] Shanghai Composite Index rose 0.16% to close at 3595.09; The Shenzhen Component Index fell 0.38% to close at 14697.17 points; The gem index fell 1.09% to close at 3368.78.
[industry tracking] industry: 17 industries rose and 11 industries fell. Among them, building materials, household appliances and building decoration sectors led the increase, with an increase of 2.12%, 2.04% and 1.31% respectively; Defense and military industry, non-ferrous metals and electrical equipment sectors led the decline, with declines of – 3.39%, – 1.91% and – 1.79% respectively.
Industry comments
The building materials sector led the increase. On December 6, the official website of the people’s Bank of China announced a reduction in the reserve requirement ratio and reduced the deposit reserve ratio of financial institutions by 0.5 percentage points on December 15, 2021. In addition, at yesterday’s Politburo meeting, it was stressed that “stability is at the forefront and progress is made in stability”, highlighting the intention of the current policy to stabilize growth. The overall pressure on the real estate side has slowed down, including the loosening of the real estate financing side. Since this year, the overall decline of the real estate industry chain (real estate developers, household appliances, cement and building materials) has been large, and the current overall valuation is at a historical low. Therefore, under the catalysis of the news, the building materials sector has rebounded. In terms of individual stocks, Beijing Hanjian Heshan Pipeline Co.Ltd(603616) limit, Monalisa Group Co.Ltd(002918) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) rose 6.01% and 5.90% respectively.
The household appliances sector increased significantly. On the one hand, it is similar to the building materials sector and belongs to the real estate industry chain. The reduction of reserve requirements combined with the contents of the Politburo meeting shows that the current real estate policy has been marginal loose, which constitutes a certain support for the demand for household appliances; On the other hand, from the recent public data, the domestic sales of household air conditioners in October increased by 1.3% year-on-year, while the domestic sales of refrigerators and washing machines in October increased by 3.1% and 6.3% month on month respectively, showing a warming trend as a whole. In addition, the high commodity prices in the first three quarters have a great impact on the cost side of the industry. At present, with the decline of commodity prices, the industry profit is expected to be released. In terms of individual stocks, Hangzhou Robam Appliances Co.Ltd(002508) limit, Bear Electric Appliance Co.Ltd(002959) , Hisense Home Appliances Group Co.Ltd(000921) rose 8.31% and 7.57% respectively.
Recently, the green power industry chain we continue to recommend continues to rise, and today’s increase is mainly led by power enterprises with good low-carbon transformation. In October, the national Standing Committee proposed to adjust the fluctuation range of market transaction electricity price from no more than 10% and 15% to no more than 20% in principle, and make classified adjustment. Among them, the price of high energy consuming industries can be formed by market transaction without the restriction of floating up by 20%, and the electricity price adjustment helps to improve the profit stability of power enterprises. From the perspective of profit margin, the power industry chain is affected by the “public” attribute, and the overall profit margin of the industry is limited. Therefore, the overall valuation is relatively low. We believe that under the influence of “common prosperity”, the profit distribution of various industries will more reflect the “fairness” in the future, and the profit margin of the industry may be improved. In terms of individual stocks, Gepic Energy Development Co.Ltd(000791) , Jinneng Holding Shanxi Electric Power Co.Ltd(000767) , Fujian Mindong Electric Power Limited Company(000993) and other stocks rose one after another.
Outlook
Today, the “28 differentiation” of the index continued. When the Shanghai index rose, more than 2700 stocks fell in the two cities, while only 1700 stocks rose. In terms of northward capital, the net inflow throughout the day was nearly 8 billion yuan, mainly to the weight plate. Overall, from yesterday’s Politburo meeting speech, the current policy tends to “stabilize growth”. In this context, the direction of “stabilizing investment and promoting consumption” will be the focus. In terms of stabilizing investment, power infrastructure construction and rural infrastructure, and promoting consumption, attention will be paid to the post epidemic recovery, such as accommodation, tourism, aviation, catering and so on.
Risk warning: the enterprise’s profit is less than expected; Increased volatility in overseas markets; Systemic risk.
