Today (March 21), the Shanghai and Shenzhen stock markets opened high across the board, then fell rapidly, gradually stabilized and rose, and showed repeated shocks. From the whole morning market, the three major stock indexes maintained a strong shock pattern.
From the disk point of view, the light index heavy stock market hit, the industry and concept sector rose more or fell less, and the local profit-making effect is still in existence. “Eating meat and preparing grain” has made a comeback, covid-19 related industrial chain targets continue to be strong, and infrastructure sectors such as real estate and building energy conservation are also ready to move. It is noteworthy that in the engineering construction sector, Anhui Gourgen Traffic Construction Co.Ltd(603815) , Zhejiang Communications Technology Co.Ltd(002061) , Guangdong No.2 Hydropower Engineering Company Ltd(002060) , Ningbo Construction Co.Ltd(601789) , Huitong group, Zhejiang Construction Investment Group Co.Ltd(002761) and others are also ready to move.
Tianfeng Securities Co.Ltd(601162) mentioned that A-Shares may usher in a respite window, and continue to recommend medicine (CXO, vaccine, traditional Chinese medicine, API, etc.), automobile chain (battery, lithium battery equipment, smart car, etc.), and stable investment direction (nuclear power, 5g + industrial Internet of things, pipe gallery, UHV, water conservancy, real estate leaders, etc.)
At present, under the background of scattered A-share hotspots and intensified sector rotation, possible investment opportunities are hidden. Select some institutional research reports. Let’s see what themes are available for reference.
[theme 1] agriculture, animal husbandry, feeding and fishery
Guosen Securities Co.Ltd(002736) said he was optimistic about the upward trend of grain price boom in 2022. On the one hand, it is good for the planting and seed sector. On the other hand, the rise of the cost of feed raw materials may accelerate the reversal of the pig price cycle, so it is optimistic about the investment opportunities of the pig sector. Specific targets: 1) planting sector: recommend Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) , and pay attention to Heilongjiang Agriculture Company Limited(600598) . 2) Relevant Shenzhen Agricultural Products Group Co.Ltd(000061) section: recommend Cofco Sugar Holding Co.Ltd(600737) and pay attention to China Hainan Rubber Industry Group Co.Ltd(601118) . 3) Seed sector: recommended Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Beijing Dabeinong Technology Group Co.Ltd(002385) , Shandong Denghai Seeds Co.Ltd(002041) , etc. 4) Recommendations for pig breeding sector: Zhejiang Huatong Meat Products Co.Ltd(002840) , Fujian Aonong Biological Technology Group Incorporation Limited(603363) , Leshan Giantstar Farming&Husbandry Corporation Limited(603477) , Tecon Biology Co.Ltd(002100) , Dongrui Food Group Co.Ltd(001201) , COFCO Jiakang, Muyuan Foods Co.Ltd(002714) , Wens Foodstuff Group Co.Ltd(300498) , etc.
In terms of the seed industry sector, Huaxi Securities Co.Ltd(002926) mentioned that the price of Shenzhen Agricultural Products Group Co.Ltd(000061) such as soybean meal and wheat has reached a 14 year high, and the problem of food security has become more prominent, which further stimulates the improvement of the landscape of the planting industry chain. The “new seed law” passed by China will be implemented from March 1, 2022, which is conducive to strengthening the protection of intellectual property rights in the seed industry and encouraging the innovation and breakthrough of breeding technology in the industry. The Department of agriculture and rural areas of Gansu Province recently issued a notice on the work plan for the supervision of agricultural genetically modified organisms in Gansu Province in 2022, which emphasizes preventing the proliferation of illegal genetically modified crops and promoting the healthy development of the research and application of agricultural genetically modified organisms. With the continuous improvement of industrial policies and the strict supervision of local governments, the application of biological breeding technology will be closer and closer. If the relevant systems of “Document No. 1” are issued smoothly, it will be of great significance for seed industry enterprises that have obtained genetically modified safety certificates in the early stage. Relevant listed companies include Beijing Dabeinong Technology Group Co.Ltd(002385) , Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Shandong Denghai Seeds Co.Ltd(002041) .
In terms of pig breeding sector, the agency further analyzed that the supply of pigs in the market has continued to increase recently, the consumer side has not increased significantly, and it is in a phased oversupply situation. According to the monitoring of the Ministry of agriculture and rural areas, the number of pigs in January 2022 increased by 23.6% year-on-year, and the number of pigs in February increased by 8.2% year-on-year. The pig price is always determined by the relationship between supply and demand. Under the background of the substantial growth of marketing volume, even the frequent industrial macro-control policies have failed to resist the downward trend of pig price. Since 2022, feed prices have been rising, resulting in further increase in breeding costs and farmers falling into double-sided squeeze. In the short term, pig prices continue to fluctuate weakly, but the central government is about to start the third round of frozen pork collection and storage this year, and the downward space of pig prices is expected to be limited. The cold winter of the industry is conducive to accelerating the de industrialization of pig production capacity, and a new cycle is expected to come faster. It is suggested to continue to pay attention to the degree of de industrialization of industry production capacity before the inflection point of the cycle. Relevant listed companies include Muyuan Foods Co.Ltd(002714) , Guangdong Haid Group Co.Limited(002311) .
For the agricultural industry opportunities in 2022, China Galaxy Securities Co.Ltd(601881) Securities pointed out that it firmly recommended the pig cycle. The core view is that in the bottom stage of the pig cycle, the deep loss period is the best time to layout breeding stocks. From the perspective of expectation, there will be no worse expectation. The risk of breeding stocks has been released in large quantities, and the safety margin is very high. With the decline of the number of fertile sows and the decline of pig prices again, the production capacity continues to clear, which is good for the industry to meet the dawn. Based on our judgment of the second bottom of 22q2-3, 22q1 is expected to be the second best time point for the layout of breeding stocks.
[Topic 2] covid-19 drugs
China International Capital Corporation Limited(601995) mentioned that the epidemic situation is repeated, and covid-19 related theme investment is still a hot spot. In March 15th, the State Administration of drug supervision and Quarantine Center issued the key points of technical review of New Coronavirus antigen detection reagent registration (Trial Implementation), further clarified the relevant registration and evaluation standards of COVID-19 antigen reagents, and the drug administration announced that it would speed up the approval and listing of COVID-19 virus treatment drugs. We suggest continuing to pay attention to China: 1) covid-19 testing 2) covid-19 therapeutic drugs 3) investment opportunities related to covid-19 service industry chain.
With the superposition of multiple factors, the market shock has increased, and the pharmaceutical sector has entered the value range in the long run. Last week, with the superposition of geopolitics, overseas regulatory risk fermentation, China’s epidemic escalation and other factors, the market, especially China concept stocks and Hong Kong stocks, significantly corrected in the first half of the week. With the release of China’s policy stability maintenance signal and the landing of the Fed’s interest rate increase, the second half of the week ushered in a rapid rebound and the market gradually bottomed out. After nearly a year of substantial adjustment, many assets in the pharmaceutical sector have entered the value investment range. We believe that the global comparative advantage of the upgrading of the pharmaceutical industry is gradually reflected. We suggest paying attention to the main lines such as import substitution and internationalization of excellent products.
Zhongtai Securities Co.Ltd(600918) said that the main line of covid-19 specific drug is expected to run through the whole year and is optimistic about the three industrial chains. Considering the continuous recurrence of the epidemic, the progress of drug research and development and the demand for subsequent opening up of the country, we believe that covid-19 specific drug is expected to become the main investment line throughout the year. We are optimistic about: 1) overseas original drug cdmo: Pfizer paxlovid has been approved by the EUA in the United States, Europe, Japan, Canada, China and other countries or regions, and Japan yanyeyi s-217622 has submitted its listing application in its own country, Optimistic about relevant cdmo and advantageous enterprises in all links of the industrial chain.
2) generic API authorization: MSD molnupiravir and Pfizer paxlovid have authorized MPP. We believe that leading enterprises with strong R & D and cost control ability and fast speed are expected to enjoy dividends.
3) independent research and development of domestic specific drugs and cdmo: at present, a variety of domestic specific drugs are in the clinical stage, among which real organisms and Shanghai Junshi Biosciences Co.Ltd(688180) are leading. The preliminary analysis data of the real organism azvudine are good, and phase III clinical research is being carried out in Brazil and other countries Shanghai Junshi Biosciences Co.Ltd(688180) of vv116 has obtained the EUA of Uzbekistan, and the phase I data are good. The international multicenter phase III clinical trial has completed the enrollment and administration of the first patient. We are optimistic about drug R & D related enterprises and cdmo industrial chain enterprises with advantages of cost, production capacity and stable supply.
[Theme 3] building energy conservation
China Merchants Securities Co.Ltd(600999) said that the Ministry of housing and urban rural development recently issued the “14th five year plan” for building energy conservation and green building development, which proposed to vigorously promote the development of building photovoltaic system and actively develop green buildings such as geothermal, prefabricated and ultra-low energy consumption. Among them, the development of building photovoltaic during the 14th Five Year Plan period may exceed expectations, and the BIPV industrial chain is mainly recommended. BIPV orders may be significantly large in 2022.
Guosheng securities mentioned that green building is an important direction of industrial upgrading and breeds new opportunities for growth and investment. The construction industry is a pillar industry of the national economy. With the continuous improvement of China’s top-level design of green buildings, green buildings that can save resources, protect the environment, reduce pollution and provide people with healthy, applicable and efficient use space have gradually become the main line of the transformation and upgrading of the construction industry, breeding new opportunities for rich growth and investment.
The agency further analyzed that Lvjian trillion market expanded steadily and showed excellent growth in many fields. We estimate that the scale of green building market in 2025 is expected to exceed 9 trillion yuan, with a CAGR of 5%. In terms of key areas: 1) prefabricated buildings and aluminum formwork support are developing rapidly. In 2025, the scale is expected to reach 24000 / 57.1 billion yuan respectively, and the CAGR is 10% / 9% respectively; 2) The application proportion of green building materials continues to increase, assuming that it will increase to 60% in 2025, corresponding to the market scale of about 1.3 trillion yuan in 2025, CAGR 3%; 3) BIPV / bapv has expanded rapidly with the increase of the installed speed of distributed photovoltaic. It is estimated that the stock transformation exceeds trillion, and the annual increment can exceed 140 billion; 4) The potential market space of electric energy efficiency management can reach 400 billion yuan; 5) The heating energy-saving market shows a rapid growth trend. It is expected to be nearly 30 billion yuan in 2025, with a CAGR of 14%.
Real estate development theme
Wanlian securities mentioned that the fundamentals of the real estate industry are still at the bottom, and there is still no significant improvement at the sales end. Under the macro background of “stable growth”, the policy environment of the real estate industry is not expected to be worse, and the industry fundamentals are gradually bottoming out. Due to the implementation of urban policies, the improvement policies can still be expected. It is suggested to pay attention to (1) property management companies with good fundamental performance; (2) High quality real estate enterprises with financial stability and background of central enterprises / state-owned enterprises; (3) Real estate enterprises with high-quality holding properties or transformation enterprises, or effectively form a virtuous capital cycle of “development +”.
Dongxing Securities Corporation Limited(601198) said that according to the data of the Bureau of statistics, although the investment increased from January to February, the decline in sales was better than the market expectation. However, sales are still weak and residents’ willingness to buy houses is low. The capital of the industry is still very tight, the investment willingness and ability of real estate enterprises have declined sharply, and the land market is deserted. Under the impact of shrinking demand and weakening expectation, both sides of supply and demand are facing great impact. The policy objective of “stabilizing land prices, house prices and expectations” will face great challenges. It is still a top priority to further strengthen market stability. If the land market does not warm up and the market expectation does not stabilize, the probability of stability maintenance policies will be introduced one after another.
China Industrial Securities Co.Ltd(601377) pointed out that with the voice of multiple departments, the change of real estate policy is expected to be further strengthened. On March 16, vice premier Liu he presided over the meeting of the Finance Committee of the State Council and mentioned that new loans should maintain a moderate growth; With regard to real estate enterprises, we should timely study and put forward effective solutions to prevent and resolve risks. Five departments including the Ministry of finance, the China Banking and Insurance Regulatory Commission, the central bank, the China Securities Regulatory Commission and the State Administration of foreign exchange all actively expressed their positions to maintain stability. For example, the Ministry of Finance said that it did not have the conditions to expand the pilot cities of real estate tax this year; The cbcirc encourages the steady and orderly development of M & A loans and supports high-quality enterprises to receive M & A; The central bank has made it clear that it will maintain a moderate increase in new loans; The CSRC and the safe said that they would cooperate with relevant departments to resolve the risks of real estate enterprises and promote the steady and healthy development of the real estate market. Under the maintenance of stability, the change of real estate policy will be more active and pay attention to the investment opportunities of real estate stocks.
