Summary:
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.
Computer
The overall performance of the computer industry in this period is weak. Judging from the current epidemic situation, the number of new infections in Shanghai has not yet reached the top. The market is worried that the impact of the epidemic on the real economy will also affect the willingness of enterprises and governments to purchase it systems. Under the influence of risk aversion, the market has not yet bottomed out. It is suggested to continue to wait for the turnaround in Shanghai before intervening.
Risk warning: uncertainty of international situation; The upper reaches of enterprises cut spending under inflation; Local debt risk release; The impact of the epidemic exceeded expectations.
Securities
The current period’s brokerage index continued to be relatively low, with horizontal shock consolidation, and the amplitude expanded, but the rise and fall remained convergent. In a short cycle, the securities sector will still maintain the trend of shaking the bottom of the market, and the space for continuous upward repair is limited.
Risk tips: 1 The weakening of the equity and fixed income market environment led to the decline of the overall operating performance of the industry; 2. Market fluctuation risk; 3. The progress and strength of comprehensively deepening the reform of the capital market are less than expected.
Photovoltaic
The photovoltaic industry fell 6.82% in the current period, significantly underperforming the Shanghai and Shenzhen 300 index. The weekly turnover of photovoltaic sector was 112971 billion yuan, with a month on month volume. Individual stocks in the sector fell more or rose less, and the profit-making effect was weak. The market is worried that in April, after the end of the stock market in the early stage of tariff collection in the Indian market and the inhibition of China’s downstream demand by high-priced silicon materials, the differentiation of industrial chain performance in the first quarter weakened investor confidence. At the same time, the valuation of the photovoltaic sector has been continuously compressed for the sectors with undervalued capital flows and large decline in stock prices in the early stage. The possibility of continuous adjustment is not ruled out in the short term, but the valuation of the head company has gradually entered a reasonable range, focusing on the head enterprises in the field of thermal field materials, photovoltaic glass, integrated module factory and inverter with reasonable valuation in the medium and long term.
Risk warning: the global installed demand is less than expected; The performance is less than expected.
Media
The media sector fell 6.46% in the current period. Among the sub sectors, Internet advertising and marketing, information search and aggregation, and games fell the most in a single week. Among the 152 stocks in the sector, 15 rose, 2 were flat, and 135 fell.
April ushers in the intensive period of annual report and first quarter report, which may cause certain fluctuations to some stocks. It is recommended to pay close attention.
From the perspective of valuation, based on the closing calculation on April 15, 2022, the valuation of the media sector is 19.02 times (TTM, the overall method, excluding negative values), which is 71% of the average price earnings ratio of the sector since January 1, 2017, and 76% of the median. It is at a historically low position, maintaining the investment rating of “stronger than the big market” of the media sector.
Risk warning: the risk of international political turmoil; The risk of repeated outbreaks and virus mutation; The tightening of regulatory policies exceeded expectations; Intensified market competition; Goodwill impairment risk; The quality of output content is lower than expected; The characteristics of project system lead to unstable performance.
Machinery
In this period, CS machinery sector fell 4.76%, underperforming CSI 300 (- 0.99%) by 3.77 PCT, ranking 22nd in 30 CS primary industries. Continue to focus on the mainstream track of scientific and technological growth. In the short term, the adjustment range of the mainstream new energy equipment and semiconductor equipment track is relatively deep. It is suggested to wait and see and lay out the opportunity for the bottom reading rebound of the leader of the growth track. The recent steady growth sector has performed well, benefiting the leaders of the pro cyclical sectors such as construction machinery, coal machinery and oil and gas equipment.
Risk warning: macroeconomic downturn; The price of raw materials continues to rise sharply; Major changes have taken place in the new energy policy.
Electronic
The current electronics (Shenwan) index fell 4.2%, underperforming the Shanghai and Shenzhen 300 index (- 0.99%) in the same period, ranking the last 21 among 31 Shenwan level industries Risk factors in the current external environment, such as covid-19 epidemic, US science and technology sanctions, Russia Ukraine conflict and the expectation of fed interest rate hike, have tightened risk appetite, which will have a negative impact on science and technology industries in particular.
From a long-term perspective, the demand for 5g + alot, automotive electrification and intelligence, VR / AR, smart home and other application fields will continue to grow. In addition, due to the complex changes in the current international economic and political situation, there is an urgent demand for domestic substitutes in the upstream of chips, electronic devices, raw materials and so on. It is suggested to pay attention to the industrial chain of power semiconductor, automotive electronics and VR.
Risk tips: 1) the localization process is lower than expected; 2) The cost of upstream raw materials remains high; 3) Tightening of risk appetite
Agriculture, forestry, animal husbandry and fishery
In this period, the agriculture, forestry, animal husbandry and fishery (CITIC) industry increased by 1.29%; The CSI 300 index fell 0.99%, and the agriculture, forestry, animal husbandry and fishery industry outperformed the benchmark index by 2.28 percentage points. From the perspective of the fine molecule industry of agriculture, forestry, animal husbandry and fishery, the feed processing sector increased the most this week, closing up 6.42%; Aquatic products processing sector fell the most, closing down 9.27%. There are high expectations for the growth of pet food and breeding industry.
Risk warning: the risk of sharp fluctuations in livestock and poultry prices and raw material prices; Risk that the progress of relevant policies of seed industry is less than expected; The aggravation and deterioration of African swine fever has led to the risk that the slaughter volume of pigs is less than expected.
