Core view
This week, the main A-share index rose more or fell less, and the machinery industry ranked better. We believe that China’s economic growth continued to slow down in the fourth quarter of 2021, 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 2021, we will still focus on the new infrastructure of China’s digital economy, advanced manufacturing special equipment such as new energy and semiconductors, the performance recovery exceeding expectations and the related targets of domestic alternative basic parts that will continue to be strengthened in the 14th five year plan.
This week is the fifth week of December 2021 and the last week of 2021. Social services, national defense and military industry, comprehensive, light industry manufacturing and household appliances have the worst performance. In the conceptual plate, Saline Lake has the best performance in terms of lithium extraction, lithium index, medicine business, air transportation and so on, and Baijiu, coal mining, beverage manufacturing, thermal power and ultra high voltage are the worst performing sectors. The new energy and energy storage related sectors rebounded again this week. The valuation of the military industry sector matched the growth, the increase was reasonable, and the recent performance was good.
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. December was a relatively empty window period, and the news was relatively flat, but various industrial policies and news became the largest variable in the market. 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. Double carbon is still the focus of the capital market, and the relevant benefit tracks will still be the focus of capital allocation. Commodity prices have stabilized, liquidity is expected to improve, market risk appetite is good, and market activity continues.
Hot spots continue to rotate rapidly this week, and the downside systemic risk is limited. Recently, the main line of hot spots in the market is not clear, the plate rotation is too fast, and the plates such as power equipment and lithium ore that have risen in the early stage have rebounded. It is still necessary to control the position to defend and counterattack. For fundamental investment, we still suggest that those specialized special new sub industries with 20-year performance exceeding expectations and 21-year industry prosperity should be preferred for allocation over the medium term. 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 plate under the dual carbon background. We will continue to optimize the aerospace military industry plate supported by performance or growth expectations (civil participation in the army and missile body structure) New energy (wind power, energy storage, hydrogen energy and nuclear energy) and other related advanced manufacturing sectors import substitution logic and investment logic related to the subject matter. At the same time, they continue to moderately hold the subject matter of science and technology sectors (third-generation semiconductor, big data, mini led and VR) at the inflection point of prosperity.
Related targets include: Zhejiang Fenglong Electric Co.Ltd(002931) , Chengdu Shenleng Liquefaction Plant Co.Ltd(300540) , Sichuan Crun Co.Ltd(002272) , Chengdu Leejun Industrial Co.Ltd(002651) , Kunshan Kinglai Hygienic Materials Co.Ltd(300260) , Tongyu Heavy Industy Co.Ltd(300185) , Shanghai Hugong Electric Group Co.Ltd(603131) , Sinoseal Holding Co.Ltd(300470) , Dongfang Electric Corporation Limited(600875) , Houpu Clean Energy Co.Ltd(300471) , Anhui Yingliu Electromechanical Co.Ltd(603308) , Zhonghang Electronic Measuring Instruments Co.Ltd(300114) , China Oilfield Services Limited(601808) , Jiangsu Hengli Hydraulic Co.Ltd(601100) , Wus Printed Circuit (Kunshan) Co.Ltd(002463) and Shenzhen Fastprint Circuit Tech Co.Ltd(002436) .
