Last week’s market
Last week, CSI 300 rose 3.14%, Shenwan machinery and equipment sector fell 1.10%, outperforming the market by 4.24 percentage points, ranking 23rd among all primary industries of Shenwan, and 19 sub industries rose 15% and fell 4. Among them, the sub industries with better performance are construction machinery, agricultural machinery and railway equipment, up 5.63%, 1.75% and 0.50% respectively.
In terms of valuation, as of December 8, 2021, the P / E ratio (TTM, overall method, excluding negative values) of Shenwan mechanical equipment sector was 26.02 times, and the valuation premium rate relative to Shanghai and Shenzhen 300 was 114%.
In terms of individual stocks, the top gainers were Beijing Jingcheng Machinery Electric Company Limited(600860) (61.13%), Doright Co.Ltd(300950) (20.97%), Shandong Molong Petroleum Machinery Company Limited(002490) (17.22%), qiangrui Technology (15.98%), Circuit Fabology Microelectronics Equipment Co.Ltd(688630) (15.52%), and the top gainers were Anshan Heavy Duty Mining Machinery Co.Ltd(002667) (- 20.10%), Jiangsu Skyray Instrument Co.Ltd(300165) (- 18.48%), Zhejiang Baida Precision Manufacturing Corp(603331) (- 18.40%), Anhui Ronds Science & Technology Incorporated Company(688768) (- 17.54%) and Kunshan Dongwei Technology Co.Ltd(688700) (- 16.26%).
Industry news
1) In November, the manufacturing PMI index was 50.1, returning above the boom and bust line.
2) Since December 1, Beijing has officially implemented the “national four” emission standard for non road machinery.
3) 17 projects were signed and the smart sensor Industrial Park in Jinan, Shandong Province was started.
Company news
1) Sany Heavy Industry Co.Ltd(600031) , Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) and others established the engineering machinery research institute with a registered capital of 150 million.
2) Jiangsu Safety Wire Rope Co.Ltd(603028) subsidiary won the bid for the EPC of Yindong collective dormitory building (public rental housing) project.
3) Shuifa Energas Gas Co.Ltd(603318) Shuifa new energy Co., Ltd., a wholly-owned subsidiary, acquired 51% equity of Tongliao longshengfeng Natural Gas Co., Ltd.
Industry strategy and individual stock recommendation this week
In terms of construction machinery, according to the data of China Construction Machinery Industry Association, the sales volume of excavators in October was 18964, a year-on-year decrease of 30.6%, of which 12608 were sold in the Chinese market, a year-on-year decrease of 47.2%; 6356 sets were exported, a year-on-year increase of 84.8%. From January to October 2021, the sales volume of excavators was 298300 units, with a year-on-year increase of 13.1%, further approaching the annual growth expectation of 10%. In addition, with the release of the energy consumption dual control plan by the national development and Reform Commission, a new round of production restriction measures are deployed in many places across the country, including setting the upper limit of output, staggered peak production, power restriction, requiring shutdown and maintenance, etc. We expect a new round of price adjustment in Q1 industry from the end of 2021 to 2022 to cope with the cost rise caused by production restriction. Under this expectation, it is suggested to focus on leading enterprises with strong cost transfer ability in the industry, such as leading Sany Heavy Industry Co.Ltd(600031) (600031), Shaanxi Construction Machinery Co.Ltd(600984) (600984) of construction machinery and Jiangsu Hengli Hydraulic Co.Ltd(601100) (601100) of core parts manufacturers.
In terms of industry Siasun Robot&Automation Co.Ltd(300024) , the PMI of manufacturing industry in November was 50.1%, up 0.9 percentage points from the previous month, and the prosperity of the industry rebounded. From January to October 2021, the cumulative output of China’s industrial Siasun Robot&Automation Co.Ltd(300024) was 298100 sets, with a year-on-year increase of 51.9%. We believe that at present, China is in an important stage of manufacturing capacity transformation from low-end to high-end. With the gradual decline of China’s demographic dividend and the continuous decline of industrial Siasun Robot&Automation Co.Ltd(300024) prices, the price scissors gap between the two has been significantly reduced, and machine replacement will become an important trend of manufacturing transformation in the future, In this process, it is recommended to pay attention to domestic reducer faucet Leader Harmonious Drive Systems Co.Ltd(688017) (688017) and system integration faucet Guangdong Topstar Technology Co.Ltd(300607) (300607).
Risk warning: risk of global epidemic spread; Macroeconomic growth is lower than expected; Price fluctuation risk of raw materials; Global trade friction risk.
