Macro economy: with the support of marginal improvement of the epidemic situation and marginal relaxation of policies, the market has shown an obvious oversold rebound. The sustainability of the rebound depends on whether the above two conditions continue and whether US debt is a drag. It is suggested to follow up on the basis of cautious optimism and respond flexibly.
Real estate: at present, the determination of individual housing loan interest rate and down payment ratio in various cities follows the principle of implementing policies according to the city, and adopts the three-tier pricing mechanism of the whole country, city and bank. After the national unified lower limit adjustment, the space for local governments to reduce mortgage interest rates will be further opened to further reduce the cost of home buyers. Combined with the recent continuous relaxation of local administrative control policies, including reducing down payment, loosening restrictions on sales and purchase, it is expected to improve the market forecast, boost the marginal improvement of house purchase demand, and encourage real estate enterprises to actively promote sales. At present, we prefer to recommend: Seazen Holdings Co.Ltd(601155) , Jinke Property Group Co.Ltd(000656) , Jiangsu Zhongnan Construction Group Co.Ltd(000961) , Xuhui holding group. Continuous recommendation: China Vanke Co.Ltd(000002) , Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China overseas development. Property category: China Merchants Property Operation & Service Co.Ltd(001914) , country garden service, poly property, Xuhui Yongsheng service, xinchengyue service.
Household appliances: special topic of the week – has the profit inflection point of the household appliances sector arrived? (1) Raw materials: since May, the price of bulk raw materials has fallen year-on-year, and the inflection point of raw material price has been found. Superimposed with the recent increase of ex factory price of products, it is expected to form profit elasticity. (2) Export: since February, China’s export container freight rate composite index (CCIF) has continued to decline. It is expected that the export profit margin of export enterprises is expected to rise with the further decline of shipping costs in the later stage; The rapid depreciation of RMB in the short term is good for export-oriented small household appliance enterprises. (3) Real estate: the real estate policy continues to relax, and the valuation of the post cycle sector of the real estate chain bottoms out. The demand caused by potential real estate is not weak in 2022, and the subsequent household appliance sector is expected to achieve double repair of valuation and performance.
Electronics: the globalization of the industrial chain is not smooth, accelerating the process of domestic substitution. Since the shortage of chips, countries have paid more and more attention to the construction of semiconductor industry chain. The United States and Europe have successively issued competition act and chip act to increase investment in semiconductor industry. With the intensification of international trade frictions, the anti globalization trend of the semiconductor industry chain is gradually emerging. The localization of the semiconductor industry chain is the general trend. There is a broad market space for domestic substitution, and Chinese semiconductor materials companies will continue to benefit from domestic substitution. It is recommended to pay attention to Hangzhou Lion Electronics Co.Ltd(605358) , National Silicon Industry Group Co.Ltd(688126) , Konfoong Materials International Co.Ltd(300666) , Hubei Dinglong Co.Ltd(300054) , etc.
Nonferrous Metals: 1) industrial metals: an aluminum factory in China is expected to reduce production due to an accident. The resumption of electrolytic aluminum production capacity slowed down in the second quarter, the weekly operating rate in the downstream rebounded slightly, LME aluminum inventory fell to a new low, and aluminum prices are expected to rise. Pay attention to the epidemic situation in China and the progress of downstream resumption of work and production. Relax the real estate policy in many places and accelerate investment in new and old infrastructure. We believe that the peak season of metal demand will be late, but at that time, the price of industrial metals is expected to rise generally. 2) Energy metals: at present, the supply of lithium concentrate resources continues to be tight, while the price of mica remains high, the price of auxiliary materials soars, and the tight supply of lithium salt is difficult to ease. Supply is supported. Pay attention to the downstream resumption progress. When the demand is accelerated and repaired, the price is expected to stabilize. 3) Precious metals: since March, the real yield of US bonds has risen sharply with the nominal interest rate, while the overall gold price fluctuates widely, which is mainly supported by geopolitical and other risk aversion needs. Therefore, from the performance of both, the gold price is expected to decline further. However, as the impact of the Fed’s interest rate hike on the economy gradually appears, inflation will fall, and the pace of interest rate hike is expected to slow down. At that time, gold prices are expected to strengthen again.
Automobile: after several rounds of automobile stimulus policies, the configuration value of the automobile industry is significant. From the perspective of production and manufacturing supply, with the effective resumption of work and production in Shanghai and its surrounding areas, the worst time has passed. With the policy stimulus and the recovery of social and economic activities caused by the epidemic, the demand for automobiles is expected to recover significantly.
Transportation: in the logistics industry, on May 11, the Ministry of transportation announced the phased results of ensuring smooth logistics. On May 10, the national expressway traffic volume was 21877300, an increase of 26.39% over April 10. Among them, the flow of trucks was 7.213 million, an increase of 25.65% over April 10. In addition, the volume of railway freight, road freight and cargo throughput of major ports on May 10 increased by 5.71%, 6.16% and 1.12% respectively compared with April 18; The daily container throughput of Shanghai port was stable at 100000 TEUs, rising to more than 80% of that before the epidemic; The cargo and mail throughput of Shanghai Pudong Airport rebounded to more than 60% of that before the epidemic. In view of the problem of terminal distribution in Shanghai, it is proposed that the next stage will strengthen the urban distribution and the traffic guarantee of postal express vehicles in the city, promote the orderly resumption of operation of mail express processing freight centers and outlets, and support qualified postal couriers to return to work as soon as possible. According to the arrangement of the Shanghai municipal government, from May 16, the city will promote the resumption of business and the resumption of the city in stages, and the negative impact of the epidemic on the performance of express and express enterprises will be significantly alleviated. For air transportation, on May 14, Air China Limited(601111) , China Southern Airlines Company Limited(600029) and Juneyao Airlines Co.Ltd(603885) released the operation data in April, realizing 1329 / 2445 / 130000 passengers respectively, with a year-on-year decrease of 84.2% / 81.4% / 93.5%; The volume of cargo and mail transportation reached 77000 / 9.6 / 2000 tons, a year-on-year decrease of 31.2% / 22.9% / 74.3%. At present, with the permission of the local airport and the epidemic prevention Office, airlines can resume flights from Shanghai to the region, and civil aviation passenger transport is expected to be repaired. However, we believe that stricter prevention and control measures will continue to affect passengers’ willingness to travel, and the repair speed of air transport may be relatively slow. Investment suggestions: we believe that with the adjustment of Shanghai’s epidemic prevention and control policies, the epidemic development situation is expected to be controlled at a faster speed. In this case, we suggest paying attention to the targets with relatively stable performance and continuous improvement of profits, as well as the targets with bottom valuation and good safety margin. Aviation: it is suggested to focus on Air China Limited(601111) , China Southern Airlines Company Limited(600029) and Spring Airlines Co.Ltd(601021) , China’s leading low-cost airline, which is at the bottom of the valuation and benefits from the rebound in demand. Airport: it is suggested to pay attention to the Guangzhou Baiyun International Airport Company Limited(600004) , Shenzhen Airport Co.Ltd(000089) , which are expected to recover rapidly in China. Express delivery: the logistics industry is expected to repair quickly. It is suggested to pay attention to S.F.Holding Co.Ltd(002352) with obvious advantages in the field of aging parts and high brand reputation, as well as Yunda Holding Co.Ltd(002120) , which has a stable market share and benefits from the rise of unit price. Railway: it is suggested to pay attention to Beijing-Shanghai High Speed Railway Co.Ltd(601816) , with controllable cost and steady recovery of performance.
Military industry: the first flight of C919 was successful, and the commercialization of domestic large aircraft was promoted. According to COMAC, on May 14, COMAC will deliver the first C919 large aircraft to the first user, and the first flight test will be successfully completed; At present, C919 large aircraft flight test certification and delivery preparations are advancing in an orderly manner. China Eastern Airlines is the world’s first start-up user of domestic large aircraft C919. The list of aircraft to be introduced announced in the fixed increase announcement on May 11 includes four C919 at a unit price of 99 million US dollars.
The market demand for civil aviation passenger aircraft is broad, and the commercialization process of domestic large aircraft is accelerated.
Machinery: the performance is in line with expectations and will benefit from the domestic replacement of machine tools in the future. According to the data disclosed in the 2021 annual report and the 2022 first quarter report of seven major machine tool enterprises in China, the total revenue in 2021 was RMB 11.399 billion, a year-on-year increase of + 52.68%, and the net profit attributable to the parent company was RMB 1.102 billion (excluding Guangdong Create Century Intelligent Equipment Group Corporation Limited(300083) ), a year-on-year increase of + 102.81%; In 2022, Q1 achieved a revenue of 2.863 billion yuan, a year-on-year increase of + 18.76%, and a net profit attributable to the parent company of 439 million yuan, a year-on-year increase of + 29.20%. The growth of machine tool industry in 2021 is mainly due to the continuous improvement of downstream manufacturing demand, the superposition of stock renewal demand, and the continuous improvement of domestic substitution rate of high-end machine tools. We expect that by 2025, the replacement of domestic high-end machine tools will be accelerated, and Chinese machine tool enterprises will fully benefit.
Building materials: a leading enterprise that pays attention to the consumption of building materials. Affected by demand and cost, the share price and performance of consumer building materials have a large correction range in recent year. Under the influence of the epidemic, the downward pressure brought by the demand side and the cost side may have a greater impact on small enterprises, and the clearing speed of small and medium-sized enterprises is further accelerated. Under the subsequent demand release, the head enterprises with better capital, channels, brands and management capabilities may take the lead in benefiting. The Growth Logic of individual stocks is greater than the changes of the industry. High quality leading enterprises may have better growth and valuation premium. Recommended Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Skshu Paint Co.Ltd(603737) , Guangdong Kinlong Hardware Products Co.Ltd(002791) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Beijing New Building Materials Public Limited Company(000786) and Guangdong Dongpeng Holdings Co.Ltd(003012) .
Media industry: in April, the revenue of China’s IOS market hit a record high, and the revenue of international travel manufacturers on the global top 100 accounted for 41.8%. A-share game companies performed well, and the Japanese and Korean markets of “song of Cloud City” continued to perform well. Many heavy products are intensively launched in overseas markets. Game companies in the Chinese market have sufficient supply and pay attention to the marginal improvement of the sector.
Light industrial textile clothing: the global pulp supply waits for the recovery of demand and the recovery of profits. Combing the global pulp supply, the global pulp supply pressure has increased significantly recently due to extreme weather, geopolitics, capacity congestion, raw material shortage, energy crisis, unplanned downtime and maintenance, less short-term new capacity and other factors. We believe that at present, due to China’s port wood pulp inventory is still relatively sufficient and the lack of support on the demand side, the short-term paper price may still fluctuate slightly. As the second half of the year enters the peak season of the industry, the demand warms up, and the superposition of the gradual decline of shipping and energy costs, paper enterprises may usher in a profit inflection point. It is suggested to pay attention to the pulp and paper leaders Shandong Sun Paper Co.Ltd(002078) , which have high self-sufficiency rate of raw wood pulp and deep scale advantages, as well as the special paper leaders Xianhe Co.Ltd(603733) , Quzhou Wuzhou Special Paper Co.Ltd(605007) , which have excellent competition pattern and high added value.
Computer: technology stocks have rebounded in recent two weeks, and the computer sector has followed, but the relative rebound is small. We believe that this is related to the post cyclical nature of the sector economy and the relatively low certainty of current growth. Therefore, when rebounding, it is still recommended to select the sub sectors with low value and high prosperity certainty, taking into account the rebound and subsequent safety. It is recommended to focus on the fields of industry information innovation, energy it, intelligent driving and intelligent mining Beijing Longruan Technologies Inc(688078) , and industrial software Nancal Technology Co.Ltd(603859) .
Public utilities: after this subsidy, the subsidy payment in arrears of renewable energy is expected to be gradually implemented, which is good for the coal power and green power sectors. With the support of multiple policies, the performance of thermal power sector is expected to reverse and usher in good results. We maintain the investment rating of “optimistic” in the industry, continue to be optimistic about the three main investment lines of large hydropower, scenery operators and clean energy transformation, and suggest paying attention to power operators with good cash flow. Recommend Huaneng Lancang River Hydropower Inc(600025) , Sichuan Chuantou Energy Co.Ltd(600674) , China Yangtze Power Co.Ltd(600900) , Huaneng Power International Inc(600011) electric power, Datang new energy and other companies.
Pharmaceutical industry: start normalized nucleic acid detection in many places and actively build a 15 minute nucleic acid “sampling circle”. It is suggested to pay attention to the detection related industrial chain. 1) Detection reagents: Daan Gene Co.Ltd(002030) , Sansure Biotech Inc(688289) , Wuhan Easy Diagnosis Biomedicine Co.Ltd(002932) , Shanghai Zj Bio-Tech Co.Ltd(688317) , Jiangsu Bioperfectus Technologies Co.Ltd(688399) etc; 2) Leaders of independent third-party medical testing laboratory (ICL): Guangzhou Kingmed Diagnostics Group Co.Ltd(603882) , Dian Diagnostics Group Co.Ltd(300244) , Guangdong Hybribio Biotech Co.Ltd(300639) , Shanghai Labway Clinical Laboratory Co.Ltd(301060) etc; 3) Upstream of nucleic acid detection: Nanjing Vazyme Biotech Co.Ltd(688105) , Qingdao Haier Biomedical Co.Ltd(688139) , Tofflon Science And Technology Group Co.Ltd(300171) , etc.
Chemical industry: the steady growth policy is gradually deepened, and the leading enterprises in the post real estate cycle are recommended. On May 15, the central bank and the China Banking and Insurance Regulatory Commission issued a notice on issues related to the adjustment of differentiated housing credit policies. The interest rate of the first house was reduced from 4.6% to 4.4%, and the lowest interest rate of the second house loan was still LPR + 60 basis points (5.2%), which was the first real national stimulus policy in this cycle, and the subsequent supporting tools will continue to stimulate real estate demand. With the gradual implementation and deepening of the policy, the demand for chemicals related to the post real estate cycle, such as MDI, titanium dioxide and soda ash, will increase. It is recommended that Wanhua Chemical Group Co.Ltd(600309) , Lb Group Co.Ltd(002601) , Inner Mongoliayuan Xing Energy Company Limited(000683) .
