Event: on January 12, 2022, the National Bureau of statistics released China's PPI (Industrial producer price index) for December 2021. In December 2021, China's PPI was + 10.3% year-on-year and - 1.2% month on month; For the whole year of 2021, China's PPI increased by + 8.1% year-on-year.
PPI of all industrial products decreased from flat to month on month, the first month on month decline since June 2020. In December 2021, the PPI of all industrial products in China was - 1.2% month on month, of which the prices of means of production and means of living were - 1.6% month on month, flat respectively. The overall decrease in PPI was basically due to the impact of means of production. In terms of means of production, the prices of mining industry, raw material industry and processing industry decreased by - 6.8%, - 1.7% and - 0.9% month on month respectively. We expect that the influence of power and production restriction and other factors in the early stage has been gradually alleviated, and the effect of the policy of ensuring supply and stabilizing price continues to appear. The price of industrial products has dropped, and the cost pressure of some middle and downstream industries is expected to be relieved.
PPI of ferrous metal mining and beneficiation industry decreased month on month for five consecutive months, which has been transmitted to middle and downstream industries such as calendering processing and metal products. In terms of industries, December: in oil related industries, the decline of international crude oil prices led to the decline of relevant prices in China. Among them, the prices of oil and natural gas exploitation industry, chemical raw materials and chemical products manufacturing industry and chemical fiber manufacturing industry were - 6.9%, - 2.1% and - 3.1% month on month respectively; Coal prices continued to fall, and the prices of coal mining and washing industry were - 8.3% month on month, with a decline of 3.4pp; The prices of metal related industries fell. Among them, the prices of ferrous metal mining and dressing industry, ferrous metal smelting and rolling processing industry and metal products industry were - 8.7%, - 4.4% and - 0.2% month on month respectively. The price growth rate of ferrous metal mining and dressing industry was negative for five consecutive months, and the price of ferrous metal smelting and rolling processing industry was negative for two months month on month, The month on month price growth of metal products industry is negative for the first time since June 2020, and the reduction of upstream prices has been gradually transmitted to the middle and lower reaches. It is suggested to continue to pay attention to whether there are signs of continuous weakening of demand.
The general trend of import substitution, quality improvement and efficiency increase in the manufacturing field remains unchanged, and attention is paid to the sustainable growth of high-quality enterprises in the high-end manufacturing industry.
The transformation and upgrading of manufacturing industry will be a very important link in China's economy dominated by internal circulation. Chinese enterprises continue to work in the fields of laser, industrial control, Siasun Robot&Automation Co.Ltd(300024) and have a good foundation to replace foreign brands. [ Wuhan Raycus Fiber Laser Technologies Co.Ltd(300747) ] is the leader of fiber laser in China. It has completed the integration of upstream industrial chain, is in a leading position in traditional and new applications, and its performance is highly flexible. [ Shanghai Friendess Electronic Technology Corporation Limited(688188) ] with profound accumulation of application technology, rapid breakthrough in new business of intelligent cutting head, high customer stickiness and broad space for long-term development. [ Shenzhen Inovance Technology Co.Ltd(300124) ] is the leading industrial control company in China. The power of frequency conversion and servo products has been continuously verified. PLC is expected to make a continuous breakthrough in the form of copying frequency conversion special machine, and the leading position of the company will be continuously consolidated. [ Estun Automation Co.Ltd(002747) ] is a domestic Siasun Robot&Automation Co.Ltd(300024) leader, enjoying the advantages of the whole industrial chain of "core components + ontology + integration". It is expected to continuously break through the ceiling through endogenous + extension. It is recommended to continue to pay attention to the above companies.
Risk tip: the macroeconomic growth slowed down, the shortage of raw materials exceeded expectations, and the upgrading speed of the manufacturing industry was lower than expected.
