Core view
Medium and small cap strategy in 2022: reverse the dilemma and follow the trend
The medium and small cap of Zhejiang merchants has been committed to finding the general trend and opportunities of the times, embracing the direction of China’s fastest asset growth, and implementing the specific target. 2021 is a year for small cap stocks and an extreme year. On the one hand, it is the absolute trough of new consumption and new services under the repeated epidemic situation, and on the other hand, it is the ten times trend of large and midstream new energy in the upstream. The market has higher and higher requirements for cost performance. In 2022, we continue to be optimistic about the value of small cap stocks. There are two main directions: one is the bottom of valuation, and the dilemma is reversed. Such companies mainly focus on consumer services, such as catering and catering supply chain, medical cosmetics, pets, etc; Second, the valuation is not expensive. Such companies mainly focus on technology manufacturing, new energy and related companies of the Beijing stock exchange. We believe that it is particularly important to divide the structure in this field and find companies with long-term trends and relatively reasonable short-term valuation.
Dilemma reversal: the world belongs to optimists. 1) Catering and supply chain: the trend of catering chain and catering supply chain integration is irreversible. It is at the absolute bottom and has the opportunity to reverse the dilemma. Next year’s consumption recovery is expected to be the first to benefit from the high viscosity and high cost performance track. Suggested attention: Helens, Haidilao, jiumaojiu, Qingdao Richen Food Co.Ltd(603755) etc; 2) Medical beauty and cosmetics: the medium and long-term prosperity continues to improve, benefiting from multiple links such as raw materials + production + terminal, focusing on manufacturing end capacity, terminal brand dynamic sales and institutional compliance completion. It is suggested to pay attention to: Jahen Household Products Co.Ltd(300955) , Shanghai Haohai Biological Technology Co.Ltd(688366) , Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , Proya Cosmetics Co.Ltd(603605) , etc. 3) Pets: overseas OEM business casts safety pads with less downward elasticity; The development of China’s brand business improves its performance and has great room for improvement. Suggested attention: Petpal Pet Nutrition Technology Co.Ltd(300673) .
Follow the trend: grasp the technical trend and focus on domestic substitution. From old energy to new energy is the innovation of the technical route. When the new energy industry chain ushers in deterministic growth and some links enter the stage of short supply, high performance has finally become the most preferred in the era; Under the new energy pattern, the technology starting point of domestic and foreign enterprises is the same, superimposed with the repeated overseas epidemic and the rise of Chinese independent brand automobile enterprises, which is the best time for domestic substitution. We are looking for technology accumulation enterprises with low valuation and taking advantage of the trend. 1) With its own technology accumulation, it cuts into the new energy track and ushers in a reshaped enterprise. It is recommended to pay attention to Dongguan Dingtong Precision Metal Co.Ltd(688668) , Huada Automotive Technology Corp.Ltd(603358) ; 2) Leading technology and fully benefiting from domestic alternative enterprises. It is recommended to pay attention to Jiangsu Azure Corporation(002245) , star technology, etc.
