Core view
Among the main A-share indexes last month, the Shanghai stock index, China Securities 1000 and gem all rose slightly, the Shanghai and Shenzhen 300 fell slightly, and the machinery industry ranked well. We believe that China’s economic growth continued to slow down in the fourth quarter of 2021, and the performance of export-oriented manufacturing industry was better than expected, but the boom fell month on month. From the perspective of fundamentals, in 2021, we will still focus on the new infrastructure of China’s digital economy, advanced manufacturing special equipment such as new energy and semiconductors, the performance recovery exceeding expectations and the related targets of domestic alternative basic parts that will continue to be strengthened in the 14th five year plan.
We believe that in the fourth quarter:
From the logic of fundamentals, 1 Pay attention to the advanced manufacturing direction determined by the good trend of the space competition, and focus on the new infrastructure sub plate with the most determined policy direction; 2. The big Internet of things is the basic framework for integrating China’s science and technology investment, and the new infrastructure of digital economy is still the most determined direction of China’s future investment; 3. The world trade situation continues to deteriorate, and localization substitution is the most controllable and definite field and trend. Continue to allocate the core assets of national competitiveness, enterprises with independent high-end machining capacity, select those with card position advantages to realize the import substitution of key parts, or pay attention to those basic parts enterprises with growth certainty from bottom to top. 4. Specifically, We will continue to pay attention to new energy power generation and batteries (hydrogen energy, nuclear energy, lithium battery, wind power and photovoltaic), military equipment (aerospace equipment, Beidou navigation, Satellite Internet of things and civil aircraft), and new infrastructure of digital economy (5g, Internet of things, integrated circuits, third-generation semiconductors) and other sub sectors, as well as basic component enterprises with independent core machining capacity.
We believe that December:
December is the last month of the fourth quarter and the last month of 2021. Last month, auto parts, commercial services, electronic and communication equipment made a strong upward attack, and the military industry, new energy and science and technology sectors still took the lead.
Short term capital behavior does not change the medium-term trend. Investors should choose appropriate strategies and investment cycles according to the nature of funds. The introduction of policies related to the dual carbon strategy and the empty window period after the completion of the third quarterly report made the new energy sector start again in November after rapid adjustment in October. We believe that in December, keeping up with the policy and focusing on liquidity is still the main logic of the market. In March, commodity prices are expected to be sideways, the expectation of new improvement in liquidity is expected to be strengthened, and the market risk appetite is expected to continue to be repaired. The market will still focus on the double carbon goal and green strategy, focusing on new energy sources, energy conservation and emission reduction, carbon sinks and other related sectors.
For fundamental investment, we still suggest that those specialized special new sub industries with 20-year performance exceeding expectations and 21-year industry prosperity should be preferred for allocation over the medium term. Focus on allocating oversold stocks with good fundamentals, and pay attention to sectors with strong certainty and reasonable valuation.
Advanced manufacturing related targets include: Dongfang Electric Corporation Limited(600875) , Shanghai Electric Group Company Limited(601727) , Byd Company Limited(002594) , Wuxi Lead Intelligent Equipment Co.Ltd(300450) , Shenzhen Inovance Technology Co.Ltd(300124) , Beijing Sinohytec Co.Ltd(688339) , China National Nuclear Power Co.Ltd(601985) , Cgn Nuclear Technology Development Co.Ltd(000881) ; The targets related to the new infrastructure of digital economy include: Hangzhou Silan Microelectronics Co.Ltd(600460) , Sichuan Haite High-Tech Co.Ltd(002023) , Sino Wealth Electronic Ltd(300327) , Huizhou Speed Wireless Technology Co.Ltd(300322) , Queclink Wireless Solutions Co.Ltd(300590) , Fibocom Wireless Inc(300638) , Unigroup Guoxin Microelectronics Co.Ltd(002049) , Sanchuan Wisdom Technology Co.Ltd(300066) , Suntront Technolocy Co.Ltd(300259) , Eoptolink Technology Inc.Ltd(300502) , Wus Printed Circuit (Kunshan) Co.Ltd(002463) , Shennan Circuits Co.Ltd(002916) , Shenzhen Fastprint Circuit Tech Co.Ltd(002436) , Glodon Company Limited(002410) , Beijing Kingsoft Office Software Inc(688111) , Shanghai Weaver Network Co.Ltd(603039) , Shanghai Baosight Software Co.Ltd(600845) , Digiwin Software Co.Ltd(300378) , etc; The related targets of domestic alternative basic parts include: Jiangsu Hengli Hydraulic Co.Ltd(601100) , Kunshan Kinglai Hygienic Materials Co.Ltd(300260) , Tongyu Heavy Industy Co.Ltd(300185) , Shanghai Hugong Electric Group Co.Ltd(603131) , Sinoseal Holding Co.Ltd(300470) , Anhui Yingliu Electromechanical Co.Ltd(603308) , Chengdu Leejun Industrial Co.Ltd(002651) , Sichuan Crun Co.Ltd(002272) , Zhonghang Electronic Measuring Instruments Co.Ltd(300114) , Chengdu Shenleng Liquefaction Plant Co.Ltd(300540) , Zhejiang Fenglong Electric Co.Ltd(002931) , etc.
Market performance last month
From November 1, 2021 to November 31, 2021, the Shanghai stock index rose by 0.43%, the CSI 300 fell by 1.17%, the gem rose by 7.89%, and the CSI 1000 rose by 8.32%. The top three industries with positive yield in October were auto parts index, business services and supplies index and electronic equipment, instruments and components index. The industries with the last three increases were hotels, restaurants and leisure III index, personal goods III index and power III index. The wind machinery index rose 7.59%, ranking 10 / 62 in the month of industry growth, and the sector outperformed the Shanghai Composite Index by 7.16 percentage points.
From November 1, 2021 to November 31, 2021, the top five stocks in the wind machinery sector were Hunan Yujing Machinery Co.Ltd(002943) , Suzhou Harmontronics Automation Technology Co.Ltd(688022) , Seiko technology, Foshan Golden Milky Way Intelligent Equipment Co.Ltd(300619) and Ningbo Yong Xin Optics Co.Ltd(603297) , with increases of + 152.04%, + 141.54%, + 81.26%, + 80.15% and + 77.42% respectively. The top five stocks with declines were Wuxi Shangji Automation Co.Ltd(603185) , New Universal Science And Technology Co.Ltd(300472) , Zhejiang Kaishan Compressor Co.Ltd(300257) , Shuangliang Eco-Energy Systems Co.Ltd(600481) and Suzhou Slac Precision Equipment Co.Ltd(300382) , with declines of – 26.63%, – 14.94%, – 13.43%, – 12.35% and – 11.94% respectively.
Important developments of the company covered last month
1. Zhejiang Fenglong Electric Co.Ltd(002931) (002931): Announcement on the progress of repurchase of shares of the company by means of centralized bidding transaction
2. Jiangsu Azure Corporation(002245) (002245): Announcement on the acceptance of the application for non-public offering of shares by the CSRC
Risk warning: industrial policy is lower than expected, market style preference, technology, competition and policy route risk.
