The 2022 government work report is fresh. What investment opportunities does it reveal for the capital market? Which sectors will benefit?
new and old infrastructure
This year’s government work report pointed out that we should make good use of government investment funds to drive the expansion of effective investment. This year, it is planned to arrange 3.65 trillion yuan of special bonds for local governments. We will strengthen performance orientation, adhere to “funds follow projects”, reasonably expand the scope of use, support the follow-up financing of projects under construction, and start a number of qualified major projects, new infrastructure, transformation of old public facilities and other construction projects.
AVIC securities research report pointed out that in terms of special bonds, it is expected to add 3.65 trillion yuan of special bonds of local governments this year, the same as last year, only lower than 3.75 trillion yuan in 2020, which is the second highest in history. The issuance scale of special bonds is not reduced, indicating that there are abundant funds for infrastructure related projects this year.
The research report pointed out that since various high-level meetings at the end of last year, the central government has continuously stressed that this year’s finance should “rely on the front to make efforts” and relevant projects should be “arranged in advance”. This government work report also proposed to “carry out infrastructure investment moderately in advance around the major national strategic deployment and the 14th five year plan”, It is expected that the development of infrastructure in the first half of this year will play an important role in stabilizing China’s economy.
Specifically, these infrastructure projects are expected to benefit Zheshang Securities Co.Ltd(601878) pointed out that in terms of infrastructure investment structure, the renovation of key water conservancy projects, comprehensive three-dimensional transportation network, important energy bases and facilities, urban gas pipelines and other pipe networks, and the construction of flood control and drainage facilities and underground comprehensive pipe gallery are expected to benefit. In addition, in the government work report, it is required to strengthen the construction of infrastructure such as water, electricity, gas, letter and mail in rural construction, and promote the transformation of toilets and sewage and garbage treatment in rural areas according to local conditions.
In addition, Zheshang Securities Co.Ltd(601878) believes that infrastructure is not limited to the traditional “railway public machine”, and new infrastructure is expected to become a key investment field.
The government work report points out that promoting the development of digital economy. Strengthen the overall layout of Digital China construction. Build digital information infrastructure, promote the large-scale application of 5g, promote the digital transformation of industries, and develop smart cities and digital villages. Accelerate the development of industrial Internet, cultivate and expand digital industries such as integrated circuits and artificial intelligence, and improve the innovation and supply capacity of key software and hardware technologies.
real estate
The government work report pointed out that we should continue to ensure the housing needs of the masses. Adhere to the positioning that houses are used for living rather than speculation, explore new development models, adhere to the simultaneous development of rental and purchase, accelerate the development of long-term rental housing market, promote the construction of affordable housing, support the commercial housing market to better meet the reasonable housing needs of buyers, stabilize land prices, house prices and expectations, and promote the virtuous cycle and healthy development of the real estate industry due to urban policies.
AVIC Securities believes that real estate, as a key component of the economy, is still inseparable from steady growth. Although there is still downward pressure on the growth rate of real estate investment in the first half of this year, under the situation of relaxing the policy margin and improving the real estate financing environment, we are not pessimistic about real estate investment in the second half of this year. It is expected that after industry adjustment and integration, the year-on-year growth rate of real estate investment in the second half of this year is expected to rebound to positive growth. Combined with the tail raising factors, the real estate investment in 2022 may reach the annual low point year-on-year in the same month or around April. After that, it is expected to gradually rise, and the overall growth rate in the second half of the year is higher than that in the first half of the year.
Zheshang Securities Co.Ltd(601878) said that at the beginning of March, some cities relaxed their efforts to upgrade. Zhengzhou relaxed purchase and loan restrictions, Jinzhong relaxed the down payment ratio, Jimo relaxed sales restrictions, etc. Considering that the sales of the top 100 real estate enterprises are still weak from January to February, and the two sessions set the tone of stable growth + risk prevention, the agency believes that after the two sessions, the relaxation of urban implementation policies will be upgraded compared with February. Around the release of “reasonable demand” to the extension of purchase, loan and sales restrictions, the industry fundamentals are expected to rebound at the end of March.
In terms of investment, Zheshang Securities Co.Ltd(601878) believes that the strengthening of policy correction + the industry’s expected bottom repair will bring investment opportunities in the real estate sector.
(1) track development: after the two sessions, the policy correction efforts were strengthened, the beta market of the sector continued, and the goal of resolving industrial risks was clear.
(2) property racetrack: the risk resolution of related real estate enterprises promotes the valuation repair of property enterprises, and the long-term growth of property enterprises with stronger independence is better.
(3) agent construction track: the increase of rental housing supply is a new growth track in 2022, which can be increased through new construction or stock transformation. In 2022, the number of newly-built rental houses will increase, and attention will be paid to the opportunities of agent construction.
consumption
The government work report proposed to “promote the sustained recovery of consumption” and deployed specific measures. It mainly includes: first, promote the recovery of life service consumption. This is the biggest “short board” of consumption recovery and the greatest potential. Second, steadily increase bulk consumption. Last year, the sales of new energy vehicles “blowout”, the annual sales reached 3.52 million, an increase of 1.6 times. This year, we should continue to support the consumption of new energy vehicles. We should also carry out green smart appliances and trade in. Third, develop community consumption and county and township consumption. The measures taken include strengthening the construction of urban community life service facilities, strengthening the construction of County commercial system, and developing rural e-commerce and logistics express delivery.
According to the data, in 2021, the production and sales of Shanxi Guoxin Energy Corporation Limited(600617) vehicles in China were 3.545 million and 3.521 million respectively, with a year-on-year increase of 1.6 times, and the market share reached 13.4%, 8 percentage points higher than that of the previous year.
According to chinasecurities.com, Xiao Yaqing, Minister of industry and information technology, said in an interview at the Great Hall of the people today that the sales of Shanxi Guoxin Energy Corporation Limited(600617) cars in the first two months of this year were very good, more than doubling. It is expected that the expected target will be achieved this year, which may be significantly higher than the expected target.
Guosheng Securities said that this report emphasizes the contents of stabilizing consumption, stabilizing employment and raising income, and consumption is expected to stabilize after the effect of the steady growth policy is really shown.
AVIC Securities believes that there is still room for China’s consumption upgrading. With the increasing emphasis on accuracy in epidemic prevention and control, it maintains a optimistic judgment on this year’s consumption recovery.
carbon neutralization
It is mentioned in the government work report that we should promote carbon peak and carbon neutralization in an orderly manner. Implement the carbon peak action plan. Promote the energy revolution, ensure energy supply, based on resource endowments, adhere to the first establishment and then destruction, and make overall plans to promote the low-carbon transformation of energy. Strengthen the clean and efficient utilization of coal, orderly reduction and substitution, and promote the transformation of energy conservation and carbon reduction, flexibility and heating of coal and electricity. Promote the planning and construction of large-scale wind and solar power bases and their supporting regulatory power sources, and improve the consumption capacity of the power grid for renewable energy power generation. Promote the R & D, promotion and application of green and low-carbon technologies, build a green manufacturing and service system, and promote energy conservation and carbon reduction in iron and steel, nonferrous metals, petrochemical, chemical, building materials and other industries. We will resolutely curb the blind development of projects with high energy consumption, high emissions and low levels. Promote the transformation from “dual control” of energy consumption to “dual control” of total carbon emission and intensity, improve the incentive and restraint policies for pollution and carbon reduction, and accelerate the formation of a green production and lifestyle.
He Lifeng, director of the national development and Reform Commission, said he was confident that carbon peak would be achieved by 2030 and carbon neutrality would be achieved by 2060.
Zheshang Securities Co.Ltd(601878) believes that in 2022, the focus is on “establishment” and is optimistic about “new energy +”, that is, the industrialization of new energy, which will lead to the reconstruction of many traditional industries, especially traditional industries. The “new energy +” fields represented by electronics, chemical industry, machinery, construction, light industry and nonferrous metals, which have not been fully recognized, will contain significant expectations.
The agency believes that under the background of steady growth this year, the dual control policy is expected to be relaxed to help achieve the annual economic growth target. Restricting the production activities of high energy consuming enterprises through the dual control policy will help reduce energy consumption and emissions and achieve the “double carbon” goal, but in the short term, it will limit the production of some industries and drag down economic growth. It is expected that this year, high energy consuming raw materials and intermediate inputs to support the production of new energy, such as silicon, soda ash and photovoltaic glass, will be released and supplied. The constraints restricting the production of new energy are expected to be gradually removed to support the economy.
China Securities Co.Ltd(601066) said that compared with the goal of reducing energy consumption per unit of GDP by about 3% in previous years, a more scientific assessment this year will avoid the impact on production in the process of implementing policies like last year, which is conducive to steady growth. Strengthening the clean and efficient utilization of coal, promoting the R & D, popularization and application of green and low-carbon technologies, and vigorously developing new energy industry are the key points of green and low-carbon development.
AVIC Securities believes that although it is difficult for the traditional infrastructure and real estate to give the market sufficient imagination space in terms of investment, there is no lack of investment space in the connotation of high-quality development. With the coordination and cooperation between the fields of new economy, high-end manufacturing, low-carbon environmental protection and the traditional infrastructure and real estate, steady growth still has a grasp in terms of investment.
agriculture
It is mentioned in the government work report that we will strengthen the efforts to ensure stable production and supply of grain and other important Shenzhen Agricultural Products Group Co.Ltd(000061) resources. Stabilize the sown area of grain and promote the increase of soybean and oil production. Firmly hold the red line of 1.8 billion mu of cultivated land, effectively curb the “non-agricultural” of cultivated land and prevent the “non grain” of cultivated land. Launch the third national soil survey. We will accelerate the revitalization of the seed industry and strengthen the tackling, popularization and application of agricultural science and technology. We will strengthen the regulation of pig production capacity and pay close attention to the production and supply of livestock, poultry, aquatic products and vegetables. All parties should work together to fill the “rice bag” and enrich the “vegetable basket” and firmly hold the rice bowl of more than 1.4 billion Chinese people in their own hands.
Chen Li, chief economist of Chuancai securities, said that with the overall victory of China’s fight against poverty, the focus of “agriculture, rural areas and farmers” will shift to “Rural Revitalization”, and the “seed industry revitalization” of this meeting was mentioned again, highlighting the importance of this strategy. From the perspective of “common prosperity” and high-quality development, strengthening scientific and technological breakthroughs in agriculture is also a key link to achieve common prosperity. From the perspective of national strategy, agriculture is the foundation of people’s livelihood and power, and agricultural seed industry is the national strategic and basic core industry. To change the mode of agricultural production, we should accelerate the transformation of agricultural and rural modernization. From the market point of view, the current global inflation still exists, and grain prices are expected to remain high. It is very important to deeply implement the revitalization action of seed industry.
military industry
The government work report pointed out that we should speed up the construction of modern military logistics system and modern asset management system of the army, build a modern management system of weapons and equipment, continue to deepen the reform of national defense and the army, strengthen national defense scientific and technological innovation, deeply implement the strategy of strengthening the army with talents in the new era, promote the management of the army according to law and strictly, and promote the high-quality development of the army. Optimize the layout of Defense Science, technology and industry.
Zheshang Securities Co.Ltd(601878) pointed out that in order to adapt to the complexity and uncertainty of the international geopolitical situation, the state-owned capital and related incremental funds are likely to concentrate in the field of national defense and military industry, and the core is equipment upgrading and domestic substitution, which is bound to effectively support the investment in manufacturing industry to continue the high momentum since 2021
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