Macro economy: the situation in Russia and Ukraine is still uncertain. It is suggested to keep a close watch and grasp the rhythm of the change of major assets in time. After the target of 5.5% GDP growth was set, the certainty of maintaining economic stability increased. The latest wave of epidemic has affected nearly half of the provinces, and the follow-up development deserves high attention.
Digital economy covers a wide range of areas. We believe that on the one hand, we can focus on tracking the implementation of the policies mentioned in the government work report. On the other hand, considering the relatively loose government finance this year, we can layout the relevant directions dominated by government expenditure.
Media industry: the long video platform is experiencing the growth dilemma caused by two core negative factors: the decline of user duration and the uncertain rhythm of content supervision. However, at the same time, the producers and users of long video are changing in a good direction in terms of aesthetics, interest and values at both ends of supply and demand. More elegant, realistic and universal dramas are praised and recognized by the audience, which are valuable in stimulating paid members and improving the influence of the platform.
Machinery industry: on March 5, Premier Li Keqiang proposed in the government work report to enhance the core competitiveness of the manufacturing industry, focus on cultivating “specialized and special new” enterprises, and give strong support in terms of capital, talents and incubation platform. There are many specialized and new enterprises in the field of mechanical equipment. It is optimistic that a number of leading enterprises in subdivided fields will play an important role in domestic substitution in the future.
Household appliance industry: the government work report is conducive to the release of household appliance demand. (1) In terms of consumption: we will promote the continuous recovery of consumption and encourage local governments to carry out green smart appliances in the countryside and trade in the old for the new. We expect that the implementation of the policy will be conducive to the release of the demand for home appliances, in which the demand for home appliances replacement is greater than the new demand, and the demand for rural replacement is expected to be refrigerator washing machine air conditioner; In the new demand for rural household appliances, range hood and stove air conditioner. (2) In terms of real estate: continue to ensure the housing needs of the people. We believe that this goal proposes to continue the marginal easing trend of real estate policy, and the real estate industry chain is expected to be marginal better in the future, so as to promote the household appliance sector β End recovery. At present, the valuation of the home appliance sector is at a low level, and the leaders of the subdivided track are in the medium and long-term configuration window. Recommend Haier Smart Home Co.Ltd(600690) , Midea Group Co.Ltd(000333) , Gree Electric Appliances Inc.Of Zhuhai(000651) , Hangzhou Robam Appliances Co.Ltd(002508) , Gongniu Group Co.Ltd(603195) , etc.
Real estate industry: at present, the valuation center of the industry has been repaired. At this stage, the rebound logic of the sector is still mainly based on the expectation of policy relaxation. Under the background of stable growth, we believe that the release of policies will be strengthened step by step. We do not rule out non hot cities to break the shackles of excessive regulation in the past. The subsequent industry fundamentals are expected to usher in recovery with the gradual improvement of policies, Continue to recommend China Vanke Co.Ltd(000002) , Poly Real estate, Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China overseas development.
Automobile industry: on March 5, Premier Li Keqiang made a government work report on behalf of the State Council, pointing out that this year, we will firmly implement the strategy of expanding domestic demand and continue to support the consumption of new energy vehicles. According to the data disclosed by the leaders of the Ministry of industry and information technology and some main engine manufacturers, the Shanxi Guoxin Energy Corporation Limited(600617) sales volume more than doubled year-on-year in January and February this year, and continued to recommend investment opportunities for electric intelligence.
Electronics industry: the 2022 government work report proposes to promote the development of digital economy, enhance the competitiveness of manufacturing industry and promote carbon peak, which are conducive to the development of China’s semiconductor industry. In 2022, the capital expenditure of the global semiconductor industry is expected to reach another record high. The growth of China’s semiconductor material market and the release of the capacity of new wafer factories will stimulate the market demand of the upstream semiconductor equipment and materials industry.
Pharmaceutical industry: the 2022 government work report emphasizes accelerating the R & D of covid-19 specific drugs, expanding the coverage of enterprises with 100% pre tax deduction of R & D expenses, and strengthening financial and tax support for innovation; Financial subsidies for residents’ medical insurance and health services continued to increase. Centralized purchase weakens price expression and emphasizes drug supply guarantee. We believe that the market has overreacted to centralized purchase and other medical insurance policies. This year, we focus on covid-19 specific drug industry chain and assisted reproduction industry chain.
Public utilities: under the background of steady growth, the stable supply of coal, electricity and other energy will be the basis for ensuring security; Investment in “green economy” fields such as environmental governance and renewable energy will be the key direction. At the same time, the long-term goal of carbon peak and carbon neutralization has not changed. The transformation of clean energy will be the only way to achieve the goal of “double carbon”. The construction and consumption of clean energy will be the focus of long-term development in the future. We maintain the investment rating of “optimistic” in the industry, continue to be optimistic about the three main investment lines of large hydropower, scenery operators and clean energy transformation, and suggest paying attention to power operators with good cash flow. Recommend Huaneng Lancang River Hydropower Inc(600025) , Sichuan Chuantou Energy Co.Ltd(600674) , China Yangtze Power Co.Ltd(600900) , Huaneng Power International Inc(600011) electric power, Datang new energy and other companies.
Light industry and textile clothing: the management strategy of sportswear brand from the rise of lululemon. Lululemon stands out in the fierce sportswear track with its unique performance and fashion. Its business strategy provides reference for the development of China’s sports shoes and clothing enterprises: (1) products: fabric technology seizes the minds of consumers, and the category expands and improves the crowd coverage. (2) Marketing: community marketing and large-scale events make the brand culture deeply rooted in the hearts of the people. (3) Channel: DTC mode strengthens consumer communication, and international business has become a strong driving force for development. It is suggested to pay attention to Anta sports, Li Ning, special step international, etc.
Nonferrous Metals Industry: the conflict between Russia and Ukraine continues to escalate, and the negotiation between the two sides is not progressing smoothly; Western countries have expanded sanctions against Russia, and many Russian banks will be banned from using swift system. Meanwhile, Rusal closed its alumina refinery in Ukraine, and Russia accounted for more than 5% of the global primary aluminum supply. The market is worried that sanctions against Russia and possible escalation of conflict will affect the global metal and energy supply. This week, the Vice Minister of the Ministry of industry and information technology said that the ministry would moderately speed up the development of China’s lithium resources and crack down on hoarding and driving up prices. Relevant Chinese enterprises are also accelerating the layout of mine resources. This week Sichuan Yahua Industrial Group Co.Ltd(002497) announced the acquisition of Australian battery company to lock in the supply of kenticha lithium mine in Ethiopia. However, the mismatch between supply and demand of lithium resources still exists in the short term, and the price still has room to rise. On March 5, the government work report clearly pointed out that this year’s GDP target growth rate was about 5.5%; The steady growth policy may accelerate the implementation, and the recovery of demand, the development of infrastructure and the relaxation of real estate policy are expected to boost non-ferrous metal consumption. At the same time, China’s electrolytic aluminum enterprises have steadily resumed production, and Yunnan has fully relaxed the power consumption of green aluminum projects. Compared with the external market, the rise of China’s aluminum price is stable, the conflict between Russia and Ukraine has not eased, the rise of market risk aversion has supported the rise of gold price, while the prices of bulk commodities such as crude oil and natural gas have soared, causing the market to worry about inflation. The closing price of Comex gold reached US $1974.9/oz, Approaching the highest point during the epidemic. This week, spot gold in London rose 4.33% to close at US $197095/oz, while the US dollar index rose 2.04% to close at 95.51; COMEX gold rose 4.62% to close at US $196660 per ounce this week, while Comex Silver Rose 7.87% to close at US $25.79 per ounce. The volatile situation in Ukraine may continue, and the gold price is expected to fluctuate upward in the short term.
Military industry: according to the English report of Xinhua News Agency on the 5th, according to the draft government budget report submitted by China’s Ministry of finance at the National People’s Congress, China’s defense expenditure budget this year increased by 7.1% over 2021, an increase of 0.3 percentage points over last year. Although the growth rate returns to above 7%, China’s military spending is still appropriate and moderate, and its proportion in GDP is far lower than that of the United States, Russia and other countries. It is expected that China’s defense expenditure will grow steadily in the coming period, and there is some room for improvement.
Building materials industry: the government work report was officially released. The 5.5% economic target slightly exceeded the market expectation, and the steady growth was further clarified. The report points out that we should make good use of government investment funds to drive the expansion of effective investment, and the new and old infrastructure is expected to be strengthened. The majority of building materials enterprises are subject to insufficient demand and the capital constraints of downstream real estate enterprise customers, superimposed with the suppression of profits caused by the rise in the price of bulk commodity raw materials, and the profits and stock prices of most enterprises have declined significantly. Under the background of clearer expectations of steady economic growth, the stock prices are expected to be repaired quickly in the future.
