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 first week of March 2022. The sectors such as coal, transportation, agriculture, forestry, animal husbandry and fishery, social services and public utilities performed best, while the sectors such as automobiles, electronics, power equipment, household appliances and computers performed worst. Compared with last week, this week still showed an obvious sector rotation. The oversold sector rebounded significantly in the early stage, and the oversold sector adjusted in the early stage. Among the concept sectors, coal mining, Xinjiang revitalization, biological breeding, pig industry and vitamins performed best, mainly in the sectors of maintaining growth and cycle, and involving the expectation of price rise; Power battery, lithium negative electrode, auto parts, lithium electrolyte, Contemporary Amperex Technology Co.Limited(300750) industrial chain and other sectors performed the worst, mostly due to the rotation of the concept sector with excessive rise 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, we will continue to moderately hold the targets of the science and technology sector (third-generation semiconductor, big data, automotive intelligence, mini led and VR) at the inflection point of prosperity.
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Market performance
This week, the Shanghai stock index fell 0.11%, the Shanghai and Shenzhen 300 fell 1.68%, the gem composite fell 2.67%, and the China Securities 1000 fell 1.64%. The wind tertiary industry index machinery industry fell 2.44%, ranking 50 / 62 in the industry growth week, outperforming the Shanghai Composite Index by 2.33 percentage points.
In the machinery industry of the wind tertiary industry index, the top five stocks in the week were Jiangsu Seagull Cooling Tower Co.Ltd(603269) , Taihai Manoir Nuclear Equipment Co.Ltd(002366) , Zhejiang Zhongjian Technology Co.Ltd(002779) , Foshan Golden Milky Way Intelligent Equipment Co.Ltd(300619) and Fujian Snowman Co.Ltd(002639) , with an increase of 32.14%, 31.42%, 24.18%, 18.53% and 16.63% respectively. The top five stocks with declines were Amsky Technology Co.Ltd(300521) , Shenzhen Changhong Technology Co.Ltd(300151) , St King Kong, Zhejiang Hangke Technology Incorporated Company(688006) and Hairong cold chain, with declines of – 14.64%, – 13.97%, – 13.79%, – 10.97% and – 10.76% respectively.
The market index fluctuated slightly this week, and the performance of the machinery sector was poor. The top ten companies rose by more than 10%, and the top nine companies fell by more than 10%. The overall rise and fall of individual stocks in the industry were mixed.
Industry dynamics
\u3000\u30001. Three wave resonance of memory chip price rise: some product prices have reached a new high, but this may only be the beginning (Financial Associated Press)
\u3000\u30002. Inner Mongolia will build a 100 billion hydrogen energy industry, and hydrogen energy heavy truck will become a key development project (Financial Associated Press)
Risk tips
The promotion and implementation of industrial policies are lower than expected, the change of market style has brought down the valuation center of the machinery industry, the pressure on profitability caused by rising costs, and the systemic risk caused by the spread of epidemic abroad.
