Today (May 5), the Shanghai and Shenzhen stock markets opened low across the board. At the beginning of the session, the differentiation pattern of Shanghai strong and Shenzhen weak was significant. With the recovery of large consumption, the Shanghai index turned red and gradually fluctuated and climbed, which also led to the rapid rise of the Shenzhen composite index. The trend of the gem index was relatively weak, but the decline of the gem index narrowed further near noon.
On the disk side, the general rising market reappeared, the market was weak at the beginning of the session, followed by the outbreak of military stocks, the concept of consumption recovery after the epidemic also continued to strengthen, and the sectors such as agriculture, animal husbandry, feeding and fishing, covid-19 drugs, covid-19 testing, food and beverage, consumer building materials and so on rose higher; At the same time, it also led to the rise of other industries and concept sectors, and the local profit-making effect soared.
Debang securities mentioned that the dawn is beginning, and the Quartet under the impact of the epidemic repair. a. Recovery of consumption after the epidemic: 1) household consumption; 2) Scene consumption; b. Self controlled long-term track: 1) wind power & Photovoltaic & nuclear power; 2) Semiconductor equipment and materials; 3) Military industry; c. Policy driven steady growth: 1) construction; 2) Consumption of building materials; 3) Real estate development; d. Strategic resources: 1) food security; 2) Energy security; 3) Metal resources.
At present, under the background of scattered A-share hotspots and intensified sector rotation, possible investment opportunities are hidden. Select some institutional research reports. Let’s see what themes are available for reference.
[theme 1] military industry
Gf Securities Co.Ltd(000776) mentioned that with the gradual announcement of the performance in the first quarter, the market’s concern about the uncertain profit release of the military industry sector is expected to be significantly weakened. Superimposed on the continuous strengthening of the expectation of the counter cycle of the military industry sector, the comparative advantage of the performance growth among the China news industry and the low performance base of q3-q4, the sector is expected to gradually stabilize and strengthen, and the matching degree of valuation is the key to stock selection at present. It is expected that the reform and expansion of state-owned enterprises in the second half of the year will further accelerate the upward revision of the expected business performance of state-owned enterprises and the expansion of management, which is expected to bring further improvement to the valuation of state-owned enterprises in the second half of the year.
In addition, China Merchants Securities Co.Ltd(600999) also believes that the 2021a and 2022q1 reports of several listed companies in the military industry show that their performance has improved significantly, and the outlook of the industrial chain has been comprehensively verified from top to bottom. During the 14th Five Year Plan period, various new policies such as pricing mechanism and prepayment have developed in favor of military enterprises, and the profit margin of military enterprises is expected to continue to improve, Since 2022, the trend of the industry falling sharply deviates from the basic performance of the industry companies, and it is optimistic about the repair of the deviation of the industry.
Dongguan Securities said that after the year to date correction, the current industry has a certain cost performance. From the performance data recently released by military enterprises, the performance of most middle and upper reaches enterprises has achieved high growth, the contract liabilities of most downstream main engine plants have increased significantly year-on-year, the prosperity of the industry is still good, and the countercyclical attribute of the industry is prominent.
The agency further analyzed that this year is the “closing year” of the reform of state-owned enterprises. The reform of military state-owned enterprises is expected to further accelerate and is expected to activate the vitality of military enterprises. Long term optimistic about the high prosperity of the industry under the demand for equipment upgrading during the 14th Five Year Plan period; From the perspective of usage, with the increase of actual training times, the loss of trainer aircraft and the replenishment of missile inventory are increased. We are optimistic about the aviation industry chain and the missile industry chain with high consumables. On the other hand, we are optimistic about the transfer and transformation of aerospace technology achievements to economy and society, the development of Beidou industrial chain under aerospace industry services and the Internet of things, and the development of special chips under the new round of digital currency reform.
[Topic 2] covid-19 drugs
Guolian Securities Co.Ltd(601456) mentioned that China’s epidemic prevention and control will still be the focus of market attention and investment is relatively active. We suggest to focus on the research and development progress of domestic covid-19 drugs and companies related to covid-19 detection industrial chain. Affected by the epidemic, the post epidemic construction is worth considering. It is suggested to continue to pay attention to the progress of new medical infrastructure, which is expected to increase the supply of high-quality medical resources and become the core driver of the industry. In addition, the results of the first quarter will be announced one after another. The epidemic may interfere with the performance of relevant companies. It is recommended to pay attention to companies with deterministic growth in the first quarter. Vaccine and CXO related industrial chains are still sectors with high growth, so it is recommended to continue to pay attention.
In addition, Everbright Securities Company Limited(601788) pointed out that at present, domestic covid-19 specific drugs with advanced research and development progress include RdRp inhibitor vv116, azvudine and AR inhibitor prochloramide, while domestic 3clpro inhibitors with the same target as paxlovid are mostly in the approved clinical or preclinical stage. Based on the changes and invariance of pharmaceutical investment, we believe that we should actively grasp the investment opportunities in the direction of innovation and internationalization in the future. In terms of innovative drugs and vaccines, Rongchang Biology (H) is recommended; For CXO, recommend Pharmaron Beijing Co.Ltd(300759) , Pharmablock Sciences (Nanjing) Inc(300725) ; In the field of equipment and Life Sciences, it is recommended that Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , Shinva Medical Instrument Co.Ltd(600587) , Amoy Diagnostics Co.Ltd(300685) ; In terms of innovative cutting-edge technologies, pay attention to unlisted enterprises such as Aibo biology; For domestic consumption, we recommend Jinxin reproduction (H), Lbx Pharmacy Chain Joint Stock Company(603883) , Shandong Wit Dyne Health Co.Ltd(000915) , Boya Bio-Pharmaceutical Group Co.Ltd(300294) .
Guosen Securities Co.Ltd(002736) said that the performance of the pharmaceutical industry in the first quarter continued the main line of covid-19 epidemic, and we expect the vaccine and covid-19 testing business to maintain a high-profile growth; At the same time, the CXO industry will also benefit from the transfer of the global industrial chain and continue to grow rapidly. The cdmo business related to covid-19 drugs will also bring greater performance increment to relevant companies.
The agency further analyzed and focused on covid-19 main line and high-quality stocks with reasonable valuation. Covid-19 epidemic is still the biggest main line in the pharmaceutical sector. It is suggested to pay attention to the detection, small molecule drugs, traditional Chinese medicine, vaccines and other sectors related to the epidemic. In addition, the early correction range of some high-quality stocks is large, and the valuation has been quite attractive. It is suggested to make a positive layout.
[Theme 3] consumer building materials
China Merchants Securities Co.Ltd(600999) mentioned that at present, the cost side is still high and the delivery is affected by the epidemic. The profitability of the consumer building materials sector is still under pressure in the short term. We continue to wait for the fundamental turning point. Considering the resumption of work after the epidemic is alleviated and the early price rise is transmitted to the terminal, we pay attention to Q2 or the turning point. In the medium term, the risks of the real estate chain are gradually released, and the room for the rise of raw material prices is limited. With the enhancement of the scale effect of high-quality leaders (national capacity and channel construction), channel reform (overweight small B or C), product structure optimization (category expansion or system integration), the endogenous growth momentum still exists, and the impact brought by upstream and downstream industrial factors may be gradually weakened. In the long run, the clearing of the consumer building materials market will be accelerated, the industry concentration will continue to improve, and the competition pattern will be further optimized.
Continue to recommend the leader of the first echelon of the strong HENGQIANG, and pay attention to the dilemma reversal of the second tier leader who underestimates the value.
In addition, Gf Securities Co.Ltd(000776) said that they are optimistic about the recovery of infrastructure investment in 2022. In terms of companies, it is suggested to pay attention to several main lines: (1) undervalued construction central enterprises: China State Construction Engineering Corporation Limited(601668) , with high dividend rate and real estate business valuation and repair space; Q1 order exceeds the expected China Railway Group Limited(601390) ; China Communications Construction Company Limited(601800) , with more BOT assets; (2) Building transformation: Transformation of green power operation Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) and transformation of chemical industry China National Chemical Engineering Co.Ltd(601117) ; (3) High growth local state-owned enterprises: focus on Anhui Construction Engineering Group Corporation Limited(600502) etc; (4) Steel structure: it is expected that the prosperity will continue to improve, such as the steel structure processing leader ( Anhui Honglu Steel Construction(Group) Co.Ltd(002541) ) and Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , Zhejiang Southeast Space Frame Co.Ltd(002135) with new breakthroughs in BIPV.
China International Capital Corporation Limited(601995) pointed out that the importance of infrastructure is still prominent, and the sub sector with a high proportion of infrastructure is expected to benefit directly. Grasp the relative certainty and prompt the growth leader with deep callback of layout valuation. As the impact of weak demand + high cost continues and the credit risk has not completely disappeared, we expect the profits of the building materials sector to be significantly differentiated in the first half of the year. Therefore, we still suggest to grasp the relative certainty in the uncertain macro environment, such as some stocks that are relatively decoupled from real estate, have limited credit risk exposure and stronger bargaining power. After the signal of improvement in demand certainty and further clearing of impairment risk in the second half of the year, some leaders with strong medium-term growth, solid fundamentals and deep phased valuation correction also have outstanding allocation value.
[theme 4] agriculture, animal husbandry, feeding and fishery
Huaxi Securities Co.Ltd(002926) mentioned that on April 24, the national video conference on protecting intellectual property rights of seed industry and combating counterfeiting and shoddy license infringement was held in Beijing. The meeting released the top ten typical cases of agricultural plant new variety protection in 2022 and the recommended list of the first batch of anti-counterfeiting and right protection seed testing institutions, and launched the public platform of national crop variety DNA fingerprint database. The meeting further emphasized the intellectual property protection of seed industry and improved the specific measures for seed industry protection, which is conducive to purifying the seed industry environment, stimulating the R & D and innovation vitality of enterprises, raising the entry threshold, creating a good development environment for seed industry enterprises, and leading enterprises ushered in a window period. In terms of target selection, we mainly recommend Beijing Dabeinong Technology Group Co.Ltd(002385) , Yuan Longping High-Tech Agriculture Co.Ltd(000998) and Shandong Denghai Seeds Co.Ltd(002041) with obvious first mover advantage and Shandong Denghai Seeds Co.Ltd(002041) .
In addition, Citic Securities Company Limited(600030) said that previously, the Ministry of agriculture and rural areas held the 2022 China agriculture outlook conference in Beijing, pointing out that the development of seed industry is an important source of food security, and looking forward to the steady rise of Shenzhen Agricultural Products Group Co.Ltd(000061) consumption and the high expectation of grain prices this year, which will improve the income of planting. Boost the demand for high-quality seeds. It is suggested to pay attention to the grain planting sector and recommend high-quality planting enterprises mainly engaged in rice and wheat Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) . It is suggested to pay attention to the seed industry sector and recommend Beijing Dabeinong Technology Group Co.Ltd(002385) , which has the advantage of biological breeding research and development, and Shandong Denghai Seeds Co.Ltd(002041) , which is the leader of hybrid maize seed industry with high-quality germplasm resources and variety resources. Continue to recommend high growth blue chip stocks Guangdong Haid Group Co.Limited(002311) , Yantai China Pet Foods Co.Ltd(002891) , Fujian Sunner Development Co.Ltd(002299) , etc.
Guosen Securities Co.Ltd(002736) believes that we continue to be optimistic about the cycle reversal of the pig sector and recommend investment opportunities in the seed industry sector. 1) Pig: don’t care about emotional fluctuations, continue to be optimistic about the cycle reversal logic. At present, the pig breeding industry is squeezed by both downstream and upstream, and the cash loss rate of the industry is unprecedented. It continues to maintain the judgment of clearing production capacity in the first half of 2023. 2022 is the best layout window. Core recommendations: Zhejiang Huatong Meat Products Co.Ltd(002840) and Muyuan Foods Co.Ltd(002714) .
2) white chicken: the short-term production capacity has been greatly reduced, and we are optimistic about the valuation and repair logic of white horse shares. In March, the sales volume of chicken seedlings decreased significantly, with a decline rate of nearly 30%. Therefore, we judge that the prices of relevant products are expected to rebound in mid and late April. Considering the large scale of capacity removal and the rapid repair of price, we are optimistic about the valuation repair of the industry, especially the valuation repair of white horse shares. Key recommendations: Fujian Sunner Development Co.Ltd(002299) .
3) seed industry: we are optimistic that under the background of global potential food security crisis, China is expected to promote the landing of genetically modified seeds in a reasonable, orderly and safe manner, the substantive promotion of the variety end in 2022, and the relevant head beneficiary targets. Key recommendations: Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Shandong Denghai Seeds Co.Ltd(002041) and Beijing Dabeinong Technology Group Co.Ltd(002385) .
[theme 5] food and beverage
Kaiyuan securities mentioned that it is optimistic that the impact of the epidemic on consumption will be maximized in the second quarter, and the follow-up should converge upward with the rhythm of epidemic control. We believe that when the industry recovers, the market probably favors the epidemic damaged stocks with undervalued value and high prosperity. The logic is that after the opening of the consumption scenario, some industries can have rapid consumption compensation or rebound, and companies with fast growth and good growth may become the target of the market.
The agency further analyzed that the first dimension of the year was Baijiu, mainly high-end and sub high-end Baijiu. Baijiu has a compensatory demand for business banquets in the future. At the same time, it is less affected by the price of raw materials and has strong demand and profit toughness. The impact of the epidemic in the off-season on Baijiu is limited. Some liquor enterprises control the volume and price in the off-season. At the same time, waist products are used as a supplement to the performance growth. The follow-up outlook is upward. The beer sector is optimistic about the enterprise profit elasticity brought by price increase and structural upgrading in the medium term. The short-term epidemic affects sales, but the logic of upgrading continues to be verified. Recovery after the epidemic should be a good choice. The demand for dairy products is stable, the competition has not intensified, and it has high allocation value. Two ideas for condiment: one is to allocate the leader at the end of the long cycle; Second, seize the opportunity of high growth in quarterly performance.
Zheshang Securities Co.Ltd(601878) pointed out that it is recommended to actively layout: 1) optimize the layout of high-end liquor with little impact on performance / anti risk ability; 2) The target with strong certainty of 22q2 performance growth, good marginal change and reasonable valuation is preferred. The specific elements include: strong business strength and anti risk ability & the main base market is less affected by the epidemic situation & the performance driving force comes from mature products rather than investment promotion & 22q2 still performs well compared with 22q1.
