Core view
The A-share index rose and fell this week, and the machinery industry ranked well. We believe that in the first quarter of 2022, the pressure on China’s economy to maintain growth continued to increase, 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 2022, we need to pay close attention to digitization and intelligence, double carbon goal and greening, internal circulation construction and supply chain reconstruction, which are three clear major trends at present and in the future. We focus on China’s new infrastructure of digital economy and advanced manufacturing special equipment such as new energy and semiconductors The performance recovery exceeded expectations and the targets related to the localization of alternative basic parts continued to be strengthened in the 14th five year plan.
This week is the fourth week of February 2022. Power equipment, national defense and military industry, electronics, non-ferrous metals and public utilities have the best performance, while architectural decoration, building materials, media, non bank finance, food and beverage and other sectors have the worst performance. Compared with last week, there is still an obvious sector rotation this week, the oversold sector rebounded significantly in the early stage, and the oversold sector has been adjusted in the early stage. The concept sector, such as Middle East digital Western computing, semiconductor equipment, IDC index, lithium battery negative electrode index and Semiconductor Manufacturing International Corporation(688981) industrial chain, performed best, which were basically the rebound of oversold sectors in the early stage; Western large infrastructure, large infrastructure central enterprises, digital currency, cement manufacturing and virtual people and other sectors performed the worst, mostly covering the decline of the concept sector that rose in the early stage.
This week, the market is still an obvious game of stock funds and the trend of rapid rotation of sectors. The market still shows the trend of rapid rotation of rise and fall, killing fall over rise and making up rise over fall, which is expected to continue. The new energy sector dominated by lithium batteries belongs to the technical pullback of the recent oversold. In the medium term, some leading stocks may still have room and time for adjustment, and the recent pullback should also be defined by rebound.
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. March gradually entered the forecast period of annual report and first quarter report, and performance became the core variable leading the market. However, the first quarter of 21 was mostly the high point of manufacturing performance. The sectors with good year-on-year growth of manufacturing performance in the first quarter of 22 were limited. Some upstream of Aerospace Military Industry sector and the first quarter report of civilian military enterprises may have a large probability of exceeding expectations, which can be paid appropriate attention to. China’s green development concept and strategy are determined, followed by the implementation of the dual carbon strategy in all parts of the industrial and energy system. Dual carbon is still the focus of the capital market, and the relevant benefit tracks will still be the focus of capital allocation.
We believe that the downside systemic risk of the market next week is still limited, but the sustainability of the main line of hot spots related to maintaining market growth in the near future remains to be observed. If the sector rotation is too fast, we should control the position to defend and counterattack. The fundamental principle is to participate in the new hot spots as soon as possible, continue to avoid the sectors in which the funds hold together and rise excessively, and operate with the band idea. For fundamental investment, we still suggest to select those specialized special new sub industries with better performance than expected in 21 years and continuous prosperity in 22 years for medium-term or above allocation. Focus on allocating oversold stocks with good fundamentals, and pay attention to sectors with strong certainty and reasonable valuation. In the medium term, we will still focus on the growth technology manufacturing enterprises matching the growth and valuation and the new high-quality track sector under the dual carbon background. We will continue to optimize the investment logic related to the import substitution logic of relevant advanced manufacturing sectors such as aerospace military industry sector (civil military participation, missile), new energy (wind power, energy storage, hydrogen energy and nuclear energy) supported by performance or growth expectations, At the same time, the third-generation LED technology and mini smart technology continue to hold moderate inflection points.
The relevant marks are related to the following: Zhejiang Fenglong Electric Co.Ltd(002931) \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\197 etc.
Market performance
This week, the Shanghai stock index fell 1.13%, the Shanghai and Shenzhen 300 fell 1.67%, the gem rose 1.40%, and the China Securities 1000 rose 1.52%. The wind tertiary industry index machinery industry rose 1.29%, ranking 17 / 62 in the industry growth week, outperforming the Shanghai Composite Index by 2.42 percentage points.
In the machinery industry of the wind tertiary industry index, the top five stocks in the week were Nanjing Canatal Data-Centre Environmental Tech Co.Ltd(603912) , ST gem, Zhengzhou Sino-Crystal Diamond Co.Ltd(300064) , Sino Prima Gas Technology Co.Ltd(300483) and Amsky Technology Co.Ltd(300521) , up 49.80%, 39.52%, 36.24%, 31.09% and 28.92% respectively. The top five stocks with declines were Beijing Roborock Technology Co.Ltd(688169) , Hangzhou Great Star Industrial Co.Ltd(002444) , Shenzhen Anche Technologies Co.Ltd(300572) , Guoanda Co.Ltd(300902) and First Tractor Company Limited(601038) , with declines of – 15.83%, – 13.57%, – 12.15%, – 9.51% and – 9.40% respectively.
The market index fluctuated slightly this week, and the mechanical sector performed well. The top ten companies rose by more than 10%, and the top three companies fell by more than 10%. The overall rise of individual stocks in the industry was more or less.
Industry dynamics
\u3000\u30001. Nuclear power “energy storage” is at the right time ( China National Nuclear Power Co.Ltd(601985) information network)
\u3000\u30002. China Yangtze Power Co.Ltd(600900) release the bidding announcement for hydrogen ship construction ( China National Nuclear Power Co.Ltd(601985) information network)
Risk tips
The promotion and implementation of industrial policies were lower than expected, the change of market style brought about the downward valuation center of the machinery industry, the continuous downward pressure on profitability caused by the upward cost, and the systemic risk caused by the spread of epidemic abroad
