Core view
This week, the A-share index generally fell by a large margin, and the ranking performance of the machinery industry was average. We believe that in the first quarter of 2022, the pressure on China’s economy to maintain growth continued to increase, and the performance of export-oriented manufacturing industry was better than expected, but the boom fell month on month. Focus on the three major trends of China’s infrastructure and digital manufacturing in 2022, as well as the priority of China’s infrastructure construction and digital manufacturing in 2022 The performance recovery exceeded expectations and the targets related to the localization of alternative basic parts continued to be strengthened in the 14th five year plan.
This week is the second week of March 2022. The performance of comprehensive, power equipment, food and beverage, medicine, biology and architectural decoration sectors is the best, but the weekly rise and fall are negative. The performance of social services, household appliances, non-ferrous metals, petroleum, petrochemical and steel sectors is the worst. Compared with last week, this week again showed an obvious seesaw effect, and the oversold sectors rebounded significantly in the early stage, The hyperinflation sector has been adjusted in the early stage. China’s Baijiu COVID-19, the main solar panel, the White House, the IGBT and the East West counting section were the best in the conceptual sector. The main PV, semiconductor, digital economy and Baijiu were mainly adjusted in the above week, and the COVID-19 pneumonia detection concept was the best among the Chinese people who had been affected by the spread of the epidemic in China. Oil and gas exploitation, rare metals, air transportation, industrial aircraft and rare earths performed the worst, mostly due to the concept of excessive rise in the early stage, and the rotation of sectors made up for the decline.
This week, the market is still an obvious game of stock funds and the trend of rapid rotation of sectors. Affected by the performance of overseas markets and the expectation of the expansion of sanctions against Russia, the market has continued to fall sharply, but there are obvious signs to stop the decline. From the index, it is expected to stop the decline and rebound next week, but it is not optimistic. Once blocked, it will again focus on the trend of range shock. From the perspective of structure, the market still shows a trend of rapid rotation of rise and fall, killing the fall over the rise and making up the rise over the fall. This trend is expected to continue. The new energy sector dominated by lithium batteries belongs to the technical rebound of recent oversold. Among them, the photovoltaic sector has an eye-catching performance because of its good demand side logic. In the medium term, some leading stocks may still have adjustment space and time, and the recent rebound should also be defined as rebound.
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. March gradually entered the forecast period of annual report and first quarter report, and performance became the core variable leading the market. However, the first quarter of 21 was mostly the high point of manufacturing performance. The sectors with good year-on-year growth of manufacturing performance in the first quarter of 22 were limited. Some upstream of Aerospace Military Industry sector and the first quarter report of civilian military enterprises may have a large probability of exceeding expectations, which can be paid appropriate attention to. Affected by the expansion of the scope and depth of sanctions against Russia, localization is still the focus of the capital market, the relevant benefit tracks will still be the focus of capital allocation, and specialization and innovation are expected to become a hot spot in the near future.
We believe that the downward systemic risk of the market will be temporarily alleviated next week. If the sector rotation is too fast, we should still control the position to defend and counterattack. The fundamental principle is to participate in the new hot spots as soon as possible, continue to avoid the sectors with funds holding together and rising too high, and operate with band ideas. For fundamental investment, we still suggest to select those specialized special new sub industries with better performance than expected in 21 years and continuous prosperity in 22 years for medium-term or above allocation. 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 sector under the dual carbon background. We will continue to optimize the investment logic related to the import substitution logic of relevant advanced manufacturing sectors such as aerospace military industry sector (civil military participation, missile), new energy (wind power, energy storage, hydrogen energy and nuclear energy) supported by performance or growth expectations, At the same time, we will continue to moderately hold the targets of the science and technology sector (third-generation semiconductor, big data, automotive intelligence, miniled and VR) at the inflection point of prosperity.
The relevant marks are related to the following: Zhejiang Fenglong Electric Co.Ltd(002931) 197 etc.
Market performance
This week, the Shanghai stock index fell 4.00%, the Shanghai and Shenzhen 300 fell 4.22%, the gem composite fell 2.89%, and the China Securities 1000 fell 3.46%. The wind tertiary industry index machinery industry fell 4.82%, ranking 41 / 62 in the industry growth week, outperforming the Shanghai Composite Index by 0.82 percentage points.
In the machinery industry of the wind tertiary industry index, the top five stocks in the week were Wenyi Trinity Technology Co.Ltd(600520) , Silvery Dragon Prestressed Materials Co.Ltd Tianjin(603969) , Unittec Co.Ltd(000925) , Zhejiang Canaan Technology Limited(300412) and Dianguang Explosion-Proof Technology Co.Ltd(002730) , up 26.10%, 21.05%, 12.08%, 10.70% and 9.82% respectively. The top five stocks with declines were Hongying intelligence, Zhejiang Rifa Precision Machinery Co.Ltd(002520) , Jiangsu Rutong Petro-Machinery Co.Ltd(603036) , Shandong Swan Cotton Industrial Machinery Stock Co.Ltd(603029) and Jiangsu Seagull Cooling Tower Co.Ltd(603269) , with declines of – 21.07%, – 19.90%, – 19.52%, – 18.41% and – 17.25% respectively.
The market index generally fell sharply this week, and the performance of the machinery sector was poor. The top four companies rose by more than 10%, and the top ten companies fell by more than 10%. The overall decline of individual stocks in the industry was more or less.
Industry dynamics
\u3000\u30001. Driven by roof photovoltaic power generation, Australia’s renewable energy power generation reached a record (Financial Associated Press)
\u3000\u30002. China’s IC sales exceeded trillion for the first time, and the prosperity of some subdivided industries may rise further (Financial Associated Press)
Risk tips
The promotion and implementation of industrial policies are lower than expected, the change of market style has brought down the valuation center of the machinery industry, the pressure on profitability caused by rising costs, and the systemic risk caused by the spread of epidemic abroad.
