This week's topic: how to view the investment opportunities of inflation under the long-term geographical turmoil?
The adjustment of the A-share market this week is mainly affected by the continuous turmoil of the geopolitical situation. However, referring to historical experience, it is mainly China's fundamentals and policy factors that play a decisive role in the medium-term trend of A-shares. Due to the low correlation between the dispute between Russia and Ukraine and China, it is likely that it will not have a positive impact on China's macro fundamentals, At present, the main line of "stable growth" in China's policy remains unchanged. For the A-share market, the irrational adjustment at this time or a good time to adjust asset allocation.
In view of the particularity of Russia and Ukraine in the pricing of some global resource products, the disputes between the two countries may lead to the rise of commodity prices. Under the long-term turmoil of the two most important resource countries in Europe, in addition to crude oil, which has been at an all-time high price, some other commodity and shipping prices may usher in medium-term trend opportunities:
1) agrochemical products: Recently, the futures prices of wheat and corn have generally risen, and the European and American sanctions against Russia may also put pressure on the supply of chemical fertilizer in the global market. Under the tense geographical situation, the global price level of chemical fertilizer is likely to remain at a high level. Considering that it is the spring ploughing season in the northern hemisphere, the mobilization of war and joining the army combined with the impact of the rise in the price of chemical fertilizer and the escalation of sanctions will make the relevant Shenzhen Agricultural Products Group Co.Ltd(000061) prices in the world high at least this year.
2) non ferrous metals: the conflict between Russia and Ukraine and Western sanctions against Russia have stimulated the rise of non-ferrous metal prices, and the prices of subsequent related products are expected to be high. There are two general impact paths. One is that some non-ferrous metal supply may be missing with the forced layoffs in Russia and the stagnation of production in Ukraine. Second, inflation pushes up costs, and nonferrous metal commodity prices are expected to remain strong under the contraction of aluminum and zinc smelting capacity.
3) International Shipping: the escalation of geopolitical risks restricts the development of shipping and the recent rise of shipping prices. With the mobilization of the war or the expansion of the supply gap of transportation capacity, and the economic recovery after the global epidemic leads to the repair of the demand side, the shipping probability will increase in the market.
Key investment points: global capital markets fluctuated under geographical conflicts, international bulk commodities generally rose, and supply chain uncertainty pushed up shipping prices. From the perspective of inflation, the overall growth of domestic stocks is still subject to the following risks: 1) from the perspective of inflation in the EU and the United States, it is still worth paying attention to the overall growth of domestic stocks, but from the perspective of avoiding the crisis in the EU and the United States. 2, The domestic substitution of other key parts from the whole western alliance may be accelerated in the future. It is suggested to pay attention to: semiconductor upstream materials, software ecology related to Huawei chips, etc. 2) with the display of western modern equipment in the process of war, the increasing nuclear deterrence and military industry of both sides, In particular, the main engine plant that benefited from the three-year pilot closing year of state-owned enterprise reform this year deserves special attention. 3) Risk aversion affects the market, overseas inflation remains high, geographical conflicts are superimposed, and the global economy is down. It is suggested to pay attention to the allocation value of the gold sector.
II. Which industry segments are expected to improve their profitability?
March April is a good time window to observe the high boom industries of the whole year. At present, the market in March has begun to gradually reflect the performance expectations of the first quarterly report. In mid and late April, the market will enter the intensive disclosure period of the annual report and the first quarterly report. The market often has the seasonal characteristics of "restless in spring and decisive in April". After the disclosure of the annual report and the first quarterly report, the market will generally adjust the profit forecast of listed companies. At present, the market has always been divided about whether the steady growth force is effective. Therefore, by looking for the marginal change of profit forecast, we try to find out which companies have the sustainability of steady growth recovery and the expected change of fundamentals.
Our previous report "A-share 2022 earnings forecast perspective: which segments of the boom expectations are improving?" The correction of analysts' profit expectations is counted and analyzed to find the relatively prosperous sectors this year. On the whole, the industries whose profit forecast has been increased in the past 22 years are mainly in the infrastructure industry chain, new energy vehicle industry chain and pharmaceutical sector. Primary industries that have increased in recent two months: non ferrous metals (2.87%), basic chemical industry (1.04%), electric power and public utilities (0.84%), steel (0.71%), etc.
Risk tip: the geopolitical turmoil has intensified, the Omicron epidemic in China has erupted more than expected, the liquidity of the Federal Reserve's monetary policy and China's monetary policy has tightened more than expected, and the public information used in the research report may be delayed or not updated in time.
