Core view
The main A-share indexes rose and fell this week, fluctuated 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.
This week is the fourth week of December 2021. Agriculture, forestry, animal husbandry and fishery, food and beverage, building materials and other sectors have strengthened, and power equipment, non-ferrous metals, steel and automobile industries have the worst performance. Among the concept sectors, feed, chicken and pig industries and auto parts performed best, while photovoltaic inverter, lithium battery negative electrode, lithium ore and energy storage performed worst. This week, new energy and energy storage related sectors led the decline. The valuation of the military industry sector matched the growth, with a reasonable increase. Recently, it showed a sideways shock.
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. December was a relatively empty window period, and the news was relatively flat, but various industrial policies and news became the largest variable in the market. 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. Double carbon is still the focus of the capital market, and the relevant benefit tracks will still be the focus of capital allocation. Commodity prices have stabilized, liquidity is expected to improve, market risk appetite is good, and market activity continues.
Hot spots continue to rotate rapidly this week, and the downside systemic risk is limited. Recently, the main line of hot spots in the market is not clear, the plate rotation is too fast, and the power equipment, semiconductor, nonferrous metals and other plates that have risen in the early stage continue to make up for the decline. We should still control the position and defend the counterattack. For fundamental investment, we still suggest to select those specialized special new sub industries with 20-year performance exceeding expectations and 21-year industry prosperity for medium-term or above configuration. 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 growing technology manufacturing enterprises matching growth and valuation and the new high-quality track plate under the dual carbon background, We still maintain the investment logic related to the import substitution logic of relevant advanced manufacturing sectors such as aerospace military industry sector (civil military participation, missile body structure), new energy (wind power, energy storage, hydrogen energy and nuclear energy) supported by performance or growth expectations. At the same time, we continue to moderately hold the science and technology sector at the inflection point of prosperity (third generation semiconductor, big data, mini led and VR).
Related targets include: Zhejiang Fenglong Electric Co.Ltd(002931) , Chengdu Shenleng Liquefaction Plant Co.Ltd(300540) , Sichuan Crun Co.Ltd(002272) , Chengdu Leejun Industrial Co.Ltd(002651) , 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) , Dongfang Electric Corporation Limited(600875) , Houpu Clean Energy Co.Ltd(300471) , Anhui Yingliu Electromechanical Co.Ltd(603308) , Zhonghang Electronic Measuring Instruments Co.Ltd(300114) , China Oilfield Services Limited(601808) , Jiangsu Hengli Hydraulic Co.Ltd(601100) , Wus Printed Circuit (Kunshan) Co.Ltd(002463) and Shenzhen Fastprint Circuit Tech Co.Ltd(002436) .
Market performance
This week, the Shanghai stock index fell 0.39%, the Shanghai and Shenzhen 300 fell 0.67%, the gem composite fell 0.28%, and the China Securities 1000 fell 3.35%. The wind tertiary industry index machinery industry fell 0.83%, ranking 50 / 62 in the industry growth week, outperforming the Shanghai Composite Index by 0.43 percentage points. In the machinery industry of the wind tertiary industry index, the top five stocks in the week were China High-Speed Railway Technology Co.Ltd(000008) , Fujian Snowman Co.Ltd(002639) , Guizhou Wire Rope Co.Ltd(600992) , Kunshan Kersen Science & Technology Co.Ltd(603626) and Lanzhou Ls Heavy Equipment Co.Ltd(603169) , with an increase of + 41.07%, + 18.39%, + 16.50%, + 15.37% and + 14.69%. The top five stocks with declines were * ST Baoshi, Shandong Weida Machinery Co.Ltd(002026) , water and intelligent control, Lanpec Technologies Limited(601798) and Zhejiang Jinggong Science & Technology Co.Ltd(002006) , with declines of – 19.50%, – 12.21%, – 12.20%, – 12.03% and – 10.61% respectively.
The market index fell slightly this week, and the performance of the machinery sector was poor. The top seven companies rose by more than 10%, and the top six companies fell by more than 10%. Individual stocks in the industry rose and fell as a whole.
Industry dynamics
1. Tesla domestic charging pile project is about to be put into operation, and the industrial chain company is expected to benefit (Financial Associated Press)
2. The world’s first four generation characteristic nuclear power grid connected power generation, and Huaneng ranks among the top four nuclear power ( China National Nuclear Power Co.Ltd(601985) information network)
Risk statement
The promotion and implementation of industrial policies were lower than expected, the change of market style brought down the valuation center of the machinery industry, continued downward pressure on profitability caused by rising costs, and systemic risks caused by the spread of epidemic diseases abroad.
