Follow up comments
On December 28, 2021, the Shanghai Composite Index closed at 3630.11 points, up 0.39%; The Shenzhen Component Index closed at 14837.87 points, up 0.83%. The Chongqing composite index, which we focus on, closed at 3989.50 points, up 0.56%; Sichuan composite index closed at 9951.61 points, up 1.27%. The top three stocks of Listed Companies in Sichuan and Chongqing were: Chongqing Road & Bridge Co.Ltd(600106) (600106, 10.09%), Changjiang materials (001296, 10.00%) and Sichuan Expressway Company Limited(601107) (601107, 9.98%). The 42 companies we focused on rose by 0.24% on average, of which the top three stocks were: Mianyang Fulin Precision Co.Ltd(300432) (300432, 6.71%), Sichuan New Energy Power Company Limited(000155) (000155, 6.15%) and Sichuan Yahua Industrial Group Co.Ltd(002497) (002497, 4.86%). By industry, the top three sectors in Sichuan and Chongqing are transportation (+ 4.80%), non-ferrous metals (+ 2.66%) and basic chemical industry (+ 1.83%).
On December 28, the main track of Lianjie Leshan railway was connected. Lianjie Leshan railway is an important connecting line of Chengdu Chongqing railway and Chengdu Kunming railway, and an important part of the new western land sea channel from Southwest Sichuan to the Sea outlet of Beibu Gulf. The western land sea new channel is an important construction project of Chengdu Chongqing double city economic circle as a transportation hub in Southwest China. The completion of the railway channel will help reduce the transportation cost in Sichuan and Chongqing, strengthen the flexibility of logistics transportation, promote the further growth of regional foreign trade scale, and lay a solid foundation for regional industrial and economic development. The promotion of the western land sea new channel construction project, on the one hand, continues to bring development opportunities and performance growth momentum to infrastructure related industries in Sichuan and Chongqing, on the other hand, lays a foundation for the rapid development of transportation industry. It is suggested to pay attention to the leading enterprises in related industries in Sichuan and Chongqing.
Industry dynamics
1. The Sichuan Chongqing Gaozhu new area jointly built by Guang’an City of Sichuan Province and Yubei District of Chongqing was officially unveiled, which is the only cross provincial new area jointly built by Sichuan and Chongqing provinces to implement the strategic deployment of Chengdu Chongqing dual city economic circle. The planning scope of Sichuan Chongqing Gaozhu new area includes Linshui County, Guang’an City, Sichuan Province and some administrative areas of Yubei District, Chongqing City, with a total area of 262 square kilometers. (China News Network)
2. The Department of natural resources of Sichuan Province issued the measures for the administration of review and filing of mineral resources reserves (for Trial Implementation), which standardized and clarified the matters related to the management of review and filing. (China News Network)
Company dynamics
Sichuan Road & Bridge Co.Ltd(600039) (600039): the announcement of winning the bid for major projects was issued. The company’s road and bridge group and Sichuan Zhenguang Expressway Co., Ltd. signed the general contract for the construction of Tongjiang Guang’an contract section (zcbc1) of Zhenba (Sichuan Shaanxi boundary) Guang’an expressway project, with a total contract amount of about 12 billion yuan and a construction period of 48 months.
Risk tips: economic recovery is lower than expected, covid-19 outbreak risk, raw material price fluctuation risk.
