Fiscal policy is expected to be strengthened and focus on “specialization and innovation”
The government work report mentioned that China’s GDP is expected to grow by about 5.5% in 2022; Improve the efficiency of proactive fiscal policy. The deficit ratio is planned to be about 2.8% in 2022, and the scale of expenditure is expected to expand by more than 2 trillion yuan year-on-year; Focusing on the major national strategic deployment and the 14th five year plan, we will moderately advance infrastructure investment. We will build key water conservancy projects, comprehensive three-dimensional transportation networks, important energy bases and facilities, accelerate the renewal and transformation of urban gas pipelines and other pipe networks, improve flood control and drainage facilities, and continue to promote the construction of underground comprehensive pipe corridors. The central government allocated 640 billion yuan for investment. The fiscal policy is expected to exert force and promote the bottom recovery of the manufacturing industry. In addition, the government work report mentioned that in order to enhance the core competitiveness of the manufacturing industry, efforts should be made to cultivate “specialized and special new” enterprises, and strong support should be given in terms of capital, talents and incubation platform construction. From 2020 to 2021, the supply chain of overseas brands will be significantly affected, further accelerating the import substitution of Chinese “specialized, special and new” enterprises in key manufacturing fields. China is in the process of industrial transformation. The shortage of labor force, the rise of labor price and the diversification of demand must be solved by “machines replacing people”. Low quality, low price and low-end industrial automation brands can no longer meet the quality demand of China’s manufacturing industry and are gradually eliminated by the market. Domestic brand leaders rely on localization advantages, service advantages and engineer dividends to accelerate the narrowing of the market share gap, and the industry concentration is expected to further move closer to advantageous enterprises. The suggestions focus on the focus of the ‘ Shenzhen Inovance Technology Co.Ltd(300124) \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Suzhou Tztek Technology Co.Ltd(688003) etc.
China’s boom in the oil service industry continues and overseas recovery is imminent
Affected by the Russian Ukrainian war and the high implementation rate of OPEC production reduction, the crude oil price hit a new high in recent years and exceeded US $100 / barrel in the short term. The oil price continues to be higher than the comfort zone, and the global oil service market is expected to continue to recover in 2022. From China’s perspective, crude oil and natural gas are highly dependent on foreign countries, so it is urgent to ensure national energy security. Driven by the “seven-year action plan”, the “three barrels of oil” have increased capital expenditure. CNOOC expects to double its workload and proved reserves by 2025, of which the proved reserves will exceed 5 billion barrels. China’s offshore oil and gas resources have great exploitation potential and sustainability. It is suggested to focus on China Oilfield Services Limited(601808) . As the leader of offshore oil and gas production services, the company occupies the advantages of technology and scale, and has strong profit elasticity in the recovery period of global oil service.
Industry rating and opinion update this week
China’s manufacturing industry is in a period of continuous transformation and upgrading, which will bring broad market space to the high-end equipment industry and maintain the industry’s “overweight” rating. It is recommended to focus on industrial automation, self controlled semiconductor equipment, carbon neutralization, accelerating new energy industry and benefiting photovoltaic equipment and lithium battery equipment, urban rail equipment benefiting from new infrastructure, and oil service industry gradually recovering under the promotion of energy security.
This week’s core recommendations
Advanced Micro-Fabrication Equipment Inc.China(688012) : the leading position of the company in the etching field of semiconductor equipment and the gradual large-scale production of the company’s MOCVD equipment in the field of mini led. The company is committed to building a platform company and will gradually grow into an influential semiconductor equipment company in the world.
China Oilfield Services Limited(601808) : as the leader of offshore oil and gas exploitation services, the company occupies the advantages of technology and scale, and has strong profit elasticity in the recovery period of global oil service; China has benefited from the steady increase in the certainty of “three barrels of oil” capital expenditure under the national energy security strategy, and the company is expected to enter the release period of profit flexibility.
Dongguan Yiheda Automation Co.Ltd(301029) : with the advantages of localized services, the applicability of various automation equipment in local industries and the supporting advantages of Chinese manufacturing system, the company continues to maintain the improvement trend of China’s market share in the context of the upgrading of China’s manufacturing industry and the rise of emerging industries.
Risk tips
The macroeconomic boom is lower than expected; China’s fixed asset investment is less than expected; The implementation of policies in key industries is less than expected; There is uncertainty in the company’s promotion of relevant matters
