Focus on industries in the near future: Banking and household appliances.
In the current period, the bank (CITIC) index fell 0.2%.. Compared with the macro disturbance, we pay more attention to the improvement of the “internal strength” of the industry. It is considered that the extremely low valuation level of the current banking sector fully reflects the pessimistic expectations of the market on the credit risk exposure and macroeconomic downturn of the real estate industry. At the same time, considering the good performance growth and continuously improved asset quality of the bank, it is considered that the current sector has high allocation value and maintains the investment rating of “stronger than the market” of the industry. It is suggested to focus on the head state-owned banks and joint-stock banks with solid asset quality, as well as the head urban commercial banks and rural commercial banks in regional economically developed areas.
Risk tip: the asset quality has deteriorated significantly, resulting in systemic risk.
Household appliances
CITIC’s home appliance industry rose 1.76% this week, ranking sixth in CITIC’s first-class industry classification. Affected by the recent spread of the epidemic in China and other factors, residents’ willingness to consume and invest has declined significantly due to the uncertainty of their future income and the expectation of poor macro-economy. According to the statistical data, the proportion of Chinese savers’ willingness to consume, save and invest in 2022q1 is 23.7%, 54.7% and 21.6% respectively. Compared with 2021q4, China’s consumer demand is in a downturn at present. However, combined with the situation of home appliance retail market, the year-on-year growth rate of sales volume of various categories has not decreased significantly, indicating that consumers’ demand for home appliances is still resilient.
Risk warning: repeated epidemic situation; The market demand is less than expected; Industry competition pattern intensifies; Risk of continuous fluctuations in raw material prices, shipping costs and exchange rates.
Lithium battery
The current lithium battery index fell 4.51%, significantly underperforming the Shanghai and Shenzhen 300 index. The short-term Shanghai stock index is expected to be dominated by shocks. Combined with the industry prosperity and sector trend, the short-term lithium battery sector is generally cautious. It is suggested that after the index stabilizes, it should pay appropriate attention to the high-quality target with undervalued value in subdivided fields and determined performance growth.
Risk warning: systemic risk; The price of raw materials fluctuates greatly; The sales volume of new energy vehicles is lower than expected; Industry competition intensifies
Chemical industry
In this period, CITIC basic chemical industry index fell 3.49%, 2.25 percentage points lower than Shanghai stock index and 2.50 percentage points lower than Shanghai and Shenzhen 300 index, ranking 23rd among 30 CITIC primary industries. Among CITIC’s tertiary sub industries, 5 rose and 28 fell, with soda ash, phosphate fertilizer, phosphorus chemical industry and viscose sectors leading the performance. Suggested attention: coal chemical industry and chemical fertilizer sector.
Risk tip: the price of raw materials fluctuates sharply, the price of products drops sharply, and the strength of environmental protection policies is lower than expected.
Food and beverage
In this period, the food and beverage sector rose by 4.51%, and all sub sectors generally rose. Among them, Baijiu, beer, meat products, condiments, food increased overall, increased by 3.54%, 8.66%, 8.93%, 5.9%, 8.58% respectively. In this period, the food and beverage sector recorded a good weekly performance this year. The reasons may include: the epidemic prevention and control led to poor market circulation and a relative increase in the basic needs of people’s livelihood; Listed companies are successively releasing annual reports and first quarter reports, and the good performance of some companies has driven the share price up. At present, the food and beverage sector has not formed a stable upward trend, and the relevant conditions still need to be mature. The middle of 2022 will be the key time when the fundamentals hit the bottom and the market is expected to rise. Due to the deep decline in the food sector in the early stage, many core assets already have valuation advantages. It is suggested to pay attention to the core targets of the deep decline in the early stage, including blue chip assets and growth assets. Risk warning: rising manufacturing costs; Residents’ consumption is weak.
