Core view
The A-share index generally rose slightly this week, but the CSI 1000 closed green, the market size and market value differentiated significantly, and the ranking performance of the machinery industry was poor. 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. Affected by the upstream price rise, the decline of export orders and the impact of China’s epidemic spread on demand and production, the operation of the manufacturing industry was under pressure in the second quarter.
From the perspective of fundamentals, it is necessary to pay close attention to digitization and intelligence, double carbon goal and greening, internal circulation construction and supply chain reconstruction in 2022. It is a clear three major trends at present and in the future. It focuses 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 components that continue to be strengthened in the 14th five year plan.
This week is the fifth week of March 2022. Real estate, building materials, banking, media, transportation and other sectors performed the best, with positive weekly increases and decreases, while electronics, national defense and military industry, non-ferrous metals, mechanical equipment and communication and other sectors performed the worst.
Compared with last week, the seesaw effect continued this week, and the sectors with large oversold and rebound in the near future obviously stepped back. Among the concept sectors, new urbanization, real estate, cement manufacturing, banks and duty-free shops performed best; Covid-19 special drugs, third-generation semiconductors, lithium extraction from salt lakes, sensors and photoresists and other sectors performed the worst, mostly due to the rotation of the concept sector led by the rebound last week.
This week, the market fell and pulled back. Finally, the Shanghai stock index closed red, which can be regarded as the confirmation after the market was still oversold and pulled back last week.
However, in terms of volume, both the Shanghai stock index and the gem composite continue to shrink, but the early low probability is the recent low, and the market is still in the anti pumping trend, but the range still needs to continue to observe the trend next week. At present, the anti pumping height should not be optimistic, and the capacity is insufficient. If it is blocked, the probability may evolve into an interval shock trend in the future. 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. In the medium term, some leading stocks may still have adjustment space and time. Affected by the delayed statement of the pilot real estate tax by relevant departments, the real estate industry chain performed well in the second half of the week. At the same time, it shows that there is still great pressure to maintain growth. It is expected that the market will still focus on the new and old infrastructure sectors related to maintaining growth. This week, the detection boxes, antigens, specific drugs and traditional Chinese medicine related to the epidemic situation have been adjusted, but next week or another round of performance, we believe that the epidemic situation is still a hot sector concerned by the market.
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, Continue to moderately hold the targets of the science and technology sector (third-generation semiconductor, big data, automotive intelligence, mini led 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 rose 2.19%, the Shanghai and Shenzhen 300 rose 2.43%, the gem rose 0.02%, and the China Securities 1000 fell 0.69%. The wind tertiary industry index machinery industry fell 1.13%, ranking 55 / 62 in the industry growth week, outperforming the Shanghai Composite Index by 3.33 percentage points.
In the machinery industry of the wind tertiary industry index, the top five stocks in the week were Tianjin Jinrong Tianyu Precision Machinery Co.Ltd(300988) , Zhejiangtailin Bioengineering Co.Ltd(300813) , Eurocrane (China) Co.Ltd(603966) , Anhui Fengxing Wear Resistant Materials Co.Ltd(002760) and Jade Bird Fire Co.Ltd(002960) , with an increase of 81.76%, 38.20%, 18.79%, 14.09% and 12.34% respectively. The top five stocks with declines were Guizhou Wire Rope Co.Ltd(600992) , Zhejiang Canaan Technology Limited(300412) , Hongying intelligent, Nanjing Canatal Data-Centre Environmental Tech Co.Ltd(603912) and Chongqing Mas Sci.& Tech.Co.Ltd(300275) , with declines of – 19.60%, – 17.51%, – 17.38%, – 16.60% and – 15.29% respectively.
This week, the main indexes of the market index generally rose, and the CSI 1000 fell slightly, indicating that this week is dominated by the rebound of blue chips in the market, and the performance of small and medium-sized market capitalization stocks is poor. The performance of the machinery sector was acceptable. The top ten companies increased by more than 10%, and the top ten companies decreased by more than 10%. The overall rise and fall of individual stocks in the industry were mixed.
Industry dynamics
\u3000\u30001. CCB’s digital RMB cumulative trading volume accounts for nearly 50% of the country, and suppliers welcome long-term opportunities (Financial Associated Press) 2 Global meta universe conference will be held soon, which is expected to accelerate industrial development again (Financial Associated Press) risk warning
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.
