The A-share index generally fell slightly this week, and the ranking performance of the machinery industry was acceptable. We believe that in the first quarter of 2022, the pressure on China’s economy to maintain growth continued to increase, and the outlook of export-oriented manufacturing industry accelerated to decline 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 first week of April 2022. Pan real estate, building materials and decoration, steel, banking, coal and other sectors performed best, with positive weekly increases and decreases, while power equipment, electronics, national defense and military industry, agriculture, forestry, animal husbandry and fishery, medicine and biology and other sectors performed worst. Compared with last week, the seesaw effect continued this week, and the sectors with large oversold and rebound in the early stage obviously stepped back. The concept sector has the best performance in central and western infrastructure, cement, Xinjiang revitalization, new urbanization, phosphorus chemical industry and other sectors; Covid-19 specific drugs, cro index, lithium cathode, photovoltaic inverter and auto parts have the worst performance. This week’s market style is extreme. Affected by the exit expectation of the real estate purchase restriction policy and the spread of the epidemic, the market has regained the growth logic, and the risk appetite has shrunk significantly. The real estate industry chain is the core of capital concern, and the small and medium market value targets of growth logic led the decline.
This week, the market downward exploration pulled back. The Shanghai Stock Index operated in the upper half of the K line last week, and the gem composite continued to downward exploration. Both the Shanghai stock index and the gem composite continued to shrink significantly. The market is still in the trend of withdrawal, but the amplitude and rhythm need to be observed. At present, we should not be optimistic about the height of anti pumping. If the amount of energy 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 continuous withdrawal of the real estate purchase restriction policy, the performance of the real estate and infrastructure industry chain continues to be good, indicating that the market is more worried about the 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, special drugs and traditional Chinese medicine related to the epidemic situation have been significantly adjusted. We believe that the epidemic situation is still the hot sector concerned by the market. At present, there has been a large correction, and there is still the possibility of hot rotation. On the contrary, it is the real estate sector, which should not be significantly the highest, and the construction and building materials sectors of central enterprises with reasonable valuation can still be properly concerned.
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. April has entered the intensive disclosure period of the annual report and the first quarterly report, and the performance has become 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, 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 0.94%, the Shanghai and Shenzhen 300 fell 1.06%, the gem composite fell 2.17%, and the China Securities 1000 fell 2.91%. The wind tertiary industry index machinery industry fell 1.13%, ranking 32 / 62 in the industry growth week, 0.34 percentage points lower than the Shanghai Composite Index.
The top five stocks in the machinery industry of the wind tertiary industry index were Xiamen Xgma Machinery Company Limited(600815) Tangshan Jidong Equipment And Engineering Co.Ltd(000856) Baota Industry Co.Ltd(000595) st Baoshi and Fujian Snowman Co.Ltd(002639) 14.47%, 14.47% and 13.57% respectively. The top five stocks with declines were Kunshan Kinglai Hygienic Materials Co.Ltd(300260) , Zhejiangtailin Bioengineering Co.Ltd(300813) , Tianjin Jinrong Tianyu Precision Machinery Co.Ltd(300988) , Estun Automation Co.Ltd(002747) and Beijing Chieftain Control Engineering Technology Co.Ltd(300430) , with declines of – 25.27%, – 23.27%, – 13.48%, – 11.90% and – 11.45% respectively.
This week, the main indexes of the market index generally fell, and the performance of the machinery sector was acceptable. The top ten companies rose by more than 10%, and the top nine companies fell by more than 10%. The overall rise and fall of individual stocks in the industry were mixed.
Industry dynamics
\u3000\u30001. A number of policies support the development of “green hydrogen” and accelerate multi-point flowering (Financial Associated Press)
\u3000\u30002. Liaoning and Shandong will benefit from the rapid development of coastal nuclear power ( China National Nuclear Power Co.Ltd(601985) information network)
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.
