Market Review
In the current period (from December 6 to December 10), CSI 300 rose by 3.1%, and the machinery sector rose by 0.1%, ranking 22 among 28 Shenwan industries. In terms of subdivided industries, photovoltaic equipment increased the most, by 5.3%; semiconductor equipment decreased the most, by 3.9%.
This week’s view
The policy supports the acceleration of real estate and special bond issuance, and is optimistic about the commencement of construction machinery in the peak season next year.
Recent policies have successively released support signals in the face of the real estate market. On December 3, the China Banking and Insurance Regulatory Commission said that “we should focus on meeting the demand for first home and improved housing mortgage according to different local conditions, reasonably issue real estate development loans and M & A loans, increase support for affordable rental housing, and promote the steady and healthy development of the real estate industry and market”. On December 6, the Politburo meeting stressed that “we should promote the construction of affordable housing, support the commercial housing market to better meet the reasonable housing needs of buyers, and promote the healthy development and virtuous cycle of the real estate industry”. Overall, since this year, the real estate market has faced downward pressure. Combined with the recent high-level intensive support signals for the release of real estate, the policy has ushered in a turning point, which will drive the real estate market to warm up. In addition, the issuance of special bonds continued to accelerate. On November 24, the executive meeting of the State Council proposed to “accelerate the issuance of the remaining amount this year, do a good job in fund allocation and expenditure management, and strive to form more physical workload at the beginning of next year”. In November 2021, the monthly issuance of special bonds reached a new high, reaching 576.06 billion yuan. By the end of November, a total of 3.48 trillion yuan of new special bonds had been issued in the first November of this year, completing 90% of the annual progress, a significant increase compared with 60% at the end of September. At the same time, many places are intensively applying for special bond projects in 2022. The central economic work conference held from December 8 to 10 emphasized that “infrastructure construction should be carried out moderately in advance”. The follow-up infrastructure investment will be accelerated, and it is optimistic that the infrastructure projects will be launched at the beginning of next year.
Investment suggestions:
With the warming of the real estate market and the acceleration of infrastructure investment, the trend of the construction machinery sector is better. We are optimistic about the leading companies in the industry, focusing on Sany Heavy Industry Co.Ltd(600031) , Jiangsu Hengli Hydraulic Co.Ltd(601100) , Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) , Xcmg Construction Machinery Co.Ltd(000425) , Yantai Eddie Precision Machinery Co.Ltd(603638) , Zhejiang Dingli Machinery Co.Ltd(603338) , Shaanxi Construction Machinery Co.Ltd(600984) !
Risk statement
Macroeconomic fluctuations, external demand fluctuations.
