Core view
The A-share index generally rose this week, and the machinery industry ranked well. We believe that the pressure on China’s economy to maintain growth will continue to increase in 2022, and the outlook of export-oriented manufacturing industry will accelerate its decline month on month. Affected by the upstream price rise, the decline of export orders and the impact of China’s epidemic spread on demand and production, the operation of the manufacturing industry was under pressure in the second quarter.
From the perspective of fundamentals, it is necessary to pay close attention to digitization and intelligence, double carbon goal and greening, internal circulation construction and supply chain reconstruction in 2022. It is a clear three major trends at present and in the future. It focuses on the new infrastructure of China’s digital economy, advanced manufacturing special equipment such as new energy and semiconductors, the performance recovery exceeding expectations and the related targets of domestic alternative basic components that continue to be strengthened in the 14th five year plan.
This week is the third week of May 2022. Coal, power equipment, non-ferrous metals, automobile and electronics sectors performed best this week; Pharmaceutical biology, real estate, banking, architectural decoration and household appliances had the worst performance, of which only pharmaceutical biology had a negative weekly rise or fall Among Hithink Royalflush Information Network Co.Ltd(300033) concept sectors, camping economy, hjt battery, transgenic, st and silicon energy sectors performed best, while covid-19 treatment, hepatitis concept, NMN concept, assisted reproduction and fentanyl sectors performed worst.
The overall rebound trend of the market continued this week. The Shanghai stock index mainly operated between Wuxi Boton Technology Co.Ltd(300031) 00 points. However, with the help of blue chip sectors such as coal, beauty care, food and beverage, non-ferrous metals and transportation, the Shanghai Stock Exchange 50 successfully broke through 2100 on Friday. For the subsequent rebound, we need to observe the sustainability of the performance of the leading sector, and we must be able to keep up with the strength of the rebound. Structurally, this week’s market is still a track sector dominated by new energy, energy storage, semiconductors and new energy vehicles, driving the rebound of small and medium-sized market value growth sector. On Friday, the blue chip sector led by coal successfully broke through 3100 points. Next week, we need to observe the sustainability of the leading sector to see if we can break the law of rapid rotation of the sector. In the medium term, some leading stocks may still have room and time for adjustment. Contemporary Amperex Technology Co.Limited(300750) stabilized this week, mainly supplemented by the rise of photovoltaic and other lithium battery related stocks.
This week, the central bank announced that the quotation of one-year LPR was flat in May, the five-year LPR was reduced by 15 basis points, the resumption of work and production in Shanghai continued to be promoted, and the long-term loan interest rate was reduced, which was conducive to the real estate and infrastructure industry chain. Driven by the reduction of long-term interest rates and the resumption of work and production, the overall rebound is expected to continue next week. However, if the volume is insufficient, there is the possibility that the rebound will stop making up the decline at any time.
Short term capital behavior does not change the medium-term trend. Investors should choose appropriate strategies and investment cycles according to the nature of funds. The market has entered a relatively empty window period this week. The current market performance reflects more pessimistic expectations. The relatively empty window period of performance and news may be conducive to the repair of market expectations. The second quarter was originally the development period of the manufacturing industry, but due to the joint extrusion of upstream and downstream, the manufacturing industry had great operating pressure in the second quarter. Localization is still the focus of the capital market, and the relevant benefit tracks will still be the focus of capital allocation. The incremental demand brought by import substitution is the most powerful means for the manufacturing industry to hedge the upstream and downstream squeeze.
We believe that the downward systemic risk of the market will be temporarily relieved next week, which belongs to the trend of oversold and rebound. However, it is also necessary to observe the sustainability of the withdrawal of hot sectors. We should control positions and follow the trend, continue to avoid the sectors where funds hold together and fall less, and operate with band ideas. For fundamental investment, we still suggest to select those specialized special new sub industries with better performance than expected in 21 years and continuous prosperity in 22 years for medium-term or above allocation. Focus on allocating oversold stocks with good fundamentals, and pay attention to sectors with strong certainty and reasonable valuation. In the medium term, we will still focus on the growth technology manufacturing enterprises matching the growth and valuation and the new high-quality track sector under the dual carbon background. We will continue to optimize the investment logic related to the import substitution logic of relevant advanced manufacturing sectors such as aerospace military industry sector (civil military participation, missile), new energy (wind power, energy storage, hydrogen energy and nuclear energy) supported by performance or growth expectations. At the same time, Continue to moderately hold the targets of the science and technology sector (third-generation semiconductor, big data, automotive intelligence, miniled and VR) at the inflection point of prosperity.
The relevant marks are related to the following: Zhejiang Fenglong Electric Co.Ltd(002931) 197 etc.
Market performance
This week, the Shanghai stock index rose 2.02%, the Shanghai and Shenzhen 300 rose 2.23%, the gem rose 2.63%, and the China Securities 1000 rose 3.16%. Shenwanyi power equipment industry rose by 7.39%, ranking 2 / 31 in the industry growth week, outperforming the Shanghai Composite Index by 5.24 percentage points; Shenwanyi mechanical equipment industry rose 3.17%, ranking 10 / 31 in the industry growth week, outperforming the Shanghai Composite Index by 1.15 percentage points; Shenwanyi national defense industry rose 2.08%, ranking 17 / 31 in the industry growth week, outperforming the Shanghai Composite Index by 0.06 percentage points.
Shenwanyi mechanical equipment industry, the top five stocks in the week were Mingke Jingji, Hunan Yujing Machinery Co.Ltd(002943) , huachangda, Zhejiang Yonggui Electric Equipment Co.Ltd(300351) and Sichuan Etrol Technologies Co.Ltd(300370) , with increases of 61.03%, 34.21%, 31.76%, 27.40% and 24.50% respectively. The top five stocks with declines were Shenzhen Lihexing Co.Ltd(301013) , Zhejiang Yilida Ventilator Co.Ltd(002686) , Weihai Guangtai Airport Equipment Co.Ltd(002111) , Bosun Co.Ltd(002282) and Guangdong Nedfon Air System Co.Ltd(301043) , with declines of – 28.31%, – 22.33%, – 15.34%, – 10.28% and – 9.93% respectively. This week, the main indexes of the market index generally rose, and the mechanical sector performed well. The companies with the top nine rose by more than 20%, and the companies with the top four fell by less than 10%. The overall rise of individual stocks in the industry was more or less.
The top five stocks in shenwanyi defense industry were st Xinyan, Chengdu Zhimingda Electronics Co.Ltd(688636) , Beijing Fjr Optoelectronic Technology Co.Ltd(688272) , North Electro-Optic Co.Ltd(600184) and Chengdu Spaceon Electronics Co.Ltd(002935) , up 38.18%, 14.16%, 12.22%, 12.09% and 10.47% respectively. The top five stocks with declines were Sinofibers Technology Co.Ltd(300777) , Tongyi aerospace, Tianjin 712 Communication & Broadcasting Co.Ltd(603712) , Jiangsu Maixinlin Aviation Science And Technology Corp(688685) and Chengdu M&S Electronics Technology Co.Ltd(688311) , with declines of – 6.11%, – 4.99%, – 4.75%, – 4.01% and – 3.63% respectively. The performance of the defense and military industry sector was average. The companies with the top five increases increased by more than 10%, and the companies with the top ten decreases decreased by less than 10%. The overall rise of individual stocks in the industry was more or less.
The top five stocks in shenwanyi power equipment industry were Jiangsu Huachen, Jiangsu Zhongli Group Co.Ltd(002309) , Clenergy(Xiamen)Technology Co.Ltd(603628) , Shenzhen Kstar Science & Technology Co.Ltd(002518) and Zhangjiagang Zhonghuan Hailu High-End Equipmentco.Ltd(301040) , up 61.14%, 45.23%, 44.92%, 28.51% and 24.96% respectively. The top five stocks with declines were Kangping Technology (Suzhou) Co.Ltd(300907) , Hefei Kewell Power System Co.Ltd(688551) , Shanghai Holystar Information Technology Co.Ltd(688330) , Jinguan Electric Co.Ltd(688517) and Xinte electric, with declines of – 7.25%, – 2.65%, – 2.50%, – 2.02% and – 1.91% respectively. The power equipment sector performed well, with the top ten companies rising by more than 20%, and the top ten companies falling by less than 10%. The overall rise of individual stocks in the industry was more or less.
Industry dynamics
\u3000\u Jiangsu Xinning Modern Logistics Co.Ltd(300013) 9.5%！ Quantum well helps triple junction Cecep Solar Energy Co.Ltd(000591) battery set the most Shanghai New World Co.Ltd(600628) record (Financial Associated Press)
\u3000\u30002. Commencement of nuclear island installation project of “hualong-1” Zhejiang Sanao nuclear power project ( China National Nuclear Power Co.Ltd(601985) information network)
\u3000\u30003. GGII: in April, the installed capacity of lithium iron phosphate power battery increased by 169% (high engineering hydrogen power)
Risk tips
The promotion and implementation of industrial policies are lower than expected, the change of market style has brought about the downward valuation center of the machinery industry, the continuous downward pressure on profitability caused by the upward cost, and the systemic risk caused by the spread of the epidemic in China.
