[one week micro vision] observation of the local two sessions: what is the goal of steady growth?

directory

[macro] Chen Xing: the global vaccination rate of booster injection is less than 15%

[macro] Chen Xing: the real estate downturn has not stopped - the real economy policy map, issue 4, 2022

[fixed income] Zhou Yue: Observation of the local two sessions: what is the goal of steady growth?

[fixed income] Zhou Yue: refinancing pressure from the difficulty of issuing bonds

[bank] Dai Zhifeng: the policy is in advance, the banking sector leads the rise, and the northward capital continues to increase its holdings in banks

[Medicine] Zhu Jiaqi: the centralized collection scheme of growth hormone and blood products has been implemented, and actively grasp the comfortable window period of medicine

[food and beverage] fan Jinsong: Beer pays attention to the increase of average price, and its performance slightly exceeds expectations

[light industry] Guo Meixin: the new atomization technology was officially released, and the fundamentals and valuation can be repaired

[military industry] Chen Dingru: the performance forecast is mixed. On the whole, the high prosperity of the industry has been reconfirmed

[iron and steel] Guo Hao: the steel market tends to be light

[coal] Chen Chen: the price continues to rise, the performance of coal enterprises breaks out, and the sector market is expected to continue to deduce

[chemical] Xie Nan: Wanhua established Penglai Co., Ltd. to develop green chemical industrial park

[environmental protection and public] Wang Lei: the implementation plan for promoting green consumption will be implemented, and the green electricity consumption mechanism will be fully established

macro

Chen Xing: the global vaccination rate of booster injection is less than 15%

Epidemic situation: the global epidemic is still spreading, and the epidemic prevention policies of various countries are polarized. In the last week, about 20 million and 49000 new confirmed cases and deaths of covid-19 pneumonia were recorded worldwide. Compared with the previous week, the new confirmed cases increased by 6.3% and the new deaths increased by 3.4%. This week, the total amount of global vaccination decreased slightly, recording 240 million doses, with a 7-day average decrease of 24% compared with last week. Among them, the vaccination volume in the United States decreased by 48% compared with last week, and that in Europe decreased by 18% compared with last week. About 880 million doses of booster needles have been inoculated in the world, and the vaccination rate of booster needles in the world is 11.3%. The epidemic prevention measures of various countries are polarized. In order to control the spread of covid-19 virus, the U.S. government provides 400 million non-medical N95 masks to the public free of charge from its national strategic reserve, and increases the procurement of 500 million covid-19 detection reagents. But at the same time, the British government took negative epidemic prevention measures. Prime Minister Johnson announced the end of the "plan B" plan implemented in December and the cancellation of all epidemic prevention measures, including mask injunction, work at home and vaccine pass.

Overseas: the tightening expectation of the Federal Reserve continues to heat up, and the European Central Bank may not raise interest rates. Many Fed officials continued to release the signal of raising interest rates. Chicago Fed chairman Evans predicted that the Fed would raise interest rates two to four times this year, while fed director Brenner made it clear at the hearing that "inflation in the United States is too high" and was open to raising interest rates since March this year, saying that interest rates could be raised once taper ended. The European Central Bank may not raise interest rates. European Central Bank President Lagarde said that prices should stabilize and gradually ease in 2022, and will see signs of easing supply chain problems. Europe has no reason to act like the Fed. The US Federal Reserve's manufacturing index fluctuated, and the year-on-year growth rate of UK CPI hit a new high. US retail sales fell significantly month on month in December. New housing starts and new housing construction permits in the United States reached new highs.

Prices: Shenzhen Agricultural Products Group Co.Ltd(000061) wholesale prices rose and international oil prices rebounded. This week, the Shenzhen Agricultural Products Group Co.Ltd(000061) wholesale price index of the Ministry of agriculture rose month on month, with the average price of 28 key monitored vegetables rising and the average price of 7 key monitored fruits rising. The average prices of Brent crude oil and WTI crude oil rebounded this week, and the prices of China Shipbuilding Industry Group Power Co.Ltd(600482) coal and rebar rose.

Liquidity: short-term interest rate differentiation, and the US dollar index rebounded. The short-term capital interest rate is differentiated. The weekly mean value of dr001 is down 2.1bp month on month, and the weekly mean value of dr007 is down 1.1bp month on month. This week, the weekly average of 3-month Shibor interest rate and 3-month certificate of deposit issuance interest rate decreased month on month. The interest rate of notes decreased, and the weekly average of 1-month, 6-month and 1-year rediscount interest rate of state-owned shares and silver notes decreased. This week, the central bank launched a reverse repurchase operation of 500 billion yuan. The reverse repurchase of 50 billion yuan expired, the MLF of 700 billion yuan was put in, and the MLF of 500 billion yuan expired; Next week, the central bank's open market operation will expire 500 billion yuan of reverse repurchase. The dollar index rebounded this week and the RMB rose slightly.

Performance of major categories of assets: US stocks fell across the board and treasury bond yields fell. Hong Kong stocks continued to rebound this week, and the main indexes of US stocks fell significantly this week. In terms of China's equity, the top three industries this week were computer, banking and food and beverage. This week, the weekly average yield of 10-year Treasury bonds decreased by 5.6bp, and the weekly average yield of 10-year CDB bonds decreased by 8.7bp.

Risk tip: policy changes, economic recovery is less than expected.

Release date: January 23, 2022

Report author: Chen Xing, chief of Zhongtai macro s0740521020001

macro

Chen Xing: the real estate downturn has not stopped - the real economy policy map, issue 4, 2022

The Spring Festival holiday in 2022 is approaching. From the meso high-frequency data, on the one hand, the terminal demand is differentiated, the decline in the growth rate of real estate sales in 35 cities has expanded, while the growth rate of passenger car wholesale sales of the passenger Federation has decreased, but the growth rate of retail sales has changed from negative to positive; On the other hand, industrial production is mixed. The growth rate of coal consumption for power generation in coastal power plants has narrowed, while the growth rate of steel output of steel enterprises has expanded, and the operating rates of major industries such as automobile, chemical industry and steel have increased less and decreased more.

In December 2021, most of the real estate related data weakened, among which the growth rate of sales, investment, construction and land purchase fell across the board. In the context of steady growth, at the beginning of this year, the central bank lowered the five-year LPR interest rate 5bp, while the local mortgage interest rates have actually loosened for a long time. In January, the first house loan interest rate has declined for four consecutive months. Nevertheless, the declining interest rate seems to have little effect on real estate sales, and the expectations of enterprises and residents still need to be repaired. The decline in the growth rate of real estate sales in 35 cities in January is still expanding.

When the Ministry of housing and urban rural development held a meeting to deploy this year's work, it put forward the requirements of "increasing confidence, preventing risks, stabilizing growth, promoting reform and strengthening the team", in which increasing confidence is put in the first place, which may require the introduction of more effective policies and measures. The meeting proposed to "fully release the potential of residents' housing demand and investment demand for new urban infrastructure construction". We expect that under the condition that the two major demands can be released, even if the current downward trend of real estate does not stop, it may gradually usher in improvement later.

Risk tip: policy changes, economic recovery is less than expected.

Release date: January 23, 2022

Report author: Chen Xing, chief of Zhongtai macro s0740521020001

fixed income

Zhou Yue: Observation of the local two sessions: what is the goal of steady growth?

As of January 22, 26 provincial administrative regions have completed the two sessions and published government work reports. By combing the work reports of local governments, this paper analyzes the economic operation and the goal of 2022 for investors' reference.

GDP: there is great pressure on steady growth, and the target of 2022 in many provinces and cities is generally reduced. From the total GDP in 2021, the top five are Guangdong (12.44 trillion yuan), Jiangsu (11.64 trillion yuan), Shandong (8.31 trillion yuan), Zhejiang (7.35 trillion yuan) and Henan (5.89 trillion yuan). In terms of growth rate, the economic recovery of many provinces and cities is slow. Among the 27 provinces and cities that announced the actual GDP growth rate in 2021, only four provinces and cities had a two-year compound GDP growth rate in 2021 that exceeded the year-on-year growth rate in 2019, namely Hainan, Shanxi, Jiangsu and Shandong. As the preset economic target at the beginning of the year was relatively conservative, 21 of the 27 provinces and cities completed the annual economic growth target. Compared with 2021, among the 26 provinces and cities that have published the government work report, 21 provinces and cities have reduced the GDP target growth rate, and the weighted average GDP target growth rate has decreased by 0.7 percentage points compared with 2021.

Fixed investment: half of the targets have not been achieved in 2021, and the target growth rate of provinces and cities in 2022 is differentiated. 20 provinces and cities have announced the target growth rate of fixed asset investment in 2021 and the actual growth rate in 2021. Among them, 9 provinces and cities such as Hainan, Shanxi, Jilin and Heilongjiang have reached the target, while 11 provinces and cities such as Tianjin, Hebei, Liaoning, Guangdong and Guangxi have not been completed, of which Tibet is 19.2 percentage points lower than the target growth rate. 13 provinces and cities announced the target growth rate of fixed asset investment in 2021 and 2022. Four provinces and cities raised the growth rate in 2022, namely Henan (from 6% to 10%), Gansu (from 7% to 9%), Anhui (from 9% to 10%) and Sichuan (from 7% to 8%).

Social zero: a few provinces and cities failed to achieve the target in 2021, and the target in 2022 was lowered. 15 provinces and cities announced the target growth rate of total social consumer goods in 2021 and the actual growth rate in 2021. Among them, the actual growth rate of 11 provinces such as Tianjin, Hainan, Shanxi and Jiangxi reached the target at the beginning of the year, while Guangxi, Henan, Shaanxi and Yunnan failed to meet the target at the beginning of the year. Among the 16 provinces and cities that announced the target growth rate of total social consumer goods in 2021 and 2022, Liaoning, Guangdong, Jiangxi and Gansu raised the target growth rate by 0.5-1 percentage points; Hebei, Anhui, Chongqing, Tibet, Shaanxi and Ningxia remained unchanged, while Henan, Sichuan, Yunnan, Shanxi, Guangxi and Hunan lowered their target growth rate. The weighted average social zero target growth rate in 2022 is 0.5 percentage points lower than that in 2021.

Work increment: a few provinces and cities announced that Guizhou and Guangdong raised their target growth rate in 2022. 12 provinces and cities announced the target growth rate of industrial added value above Designated Size in 2021 and the actual growth rate in 2021. Among them, 10 provinces such as Heilongjiang, Jiangxi, Guangdong and Guangxi reached the target at the beginning of the year, and 2 provinces such as Liaoning and Henan failed to meet the target at the beginning of the year. Among the seven provinces and cities that announced the target growth rate of fixed asset investment in 2021 and 2022, Guizhou (from 8.5% to 10%) and Guangdong (from 5% to 5.5%) raised the target growth rate; Jiangxi (8.5% to 8%), Guangxi (8% to 7%), Liaoning (8% to 6%) and Tibet (12% to 10%) lowered the target growth rate; Henan (7%) maintained its target growth rate in 2021.

Summary: among the provinces and cities that announced the target growth rate and actual growth rate in 2021, most provinces and cities completed the preset targets of GDP, social zero and industrial growth at the beginning of the year, and half of them did not complete the fixed investment target. Due to the increasing downward pressure on the economy, the target GDP growth rate of all provinces and cities in 2022 has generally decreased. Among the 26 provinces and cities that have published the government work report, 21 provinces and cities have reduced the target GDP growth rate. The targets of fixed investment, social zero and industrial growth were differentiated. Four provinces and cities raised the target growth rate of fixed investment in 2022 and five provinces and cities lowered it; 4 provinces and cities raised the zero target growth rate of cooperatives and 6 provinces and cities lowered it; 2 provinces and cities raised the target growth rate of industrial growth, and 4 provinces and cities lowered it.

Review of interest rate bond market: in terms of capital this week, the overall easing was affected by the interest rate cut. The capital interest rate continued to hang upside down, and the institutional bond market and leverage rose enthusiastically. The issuing market of inter-bank certificates of deposit has cooled down, and the interest rates of inter-bank certificates of deposit for all periods have decreased. In the primary market, the supply of interest rate bonds decreased month on month, and the bidding sentiment increased. In the secondary market, the yields of treasury bonds and CDB bonds fell, and the term spread widened.

Risk tip: monetary policy has been significantly tightened, and the fluctuation of bond market has increased.

Release date: January 22, 2022

Report author: Zhou Yue, chief of Zhongtai solid income s0740520100003

Xiao Yu, Zhongtai fixed income analyst s0740520110001

fixed income

Zhou Yue: refinancing pressure from the difficulty of issuing bonds

The difficulty of issuing bonds can reflect the refinancing risk of enterprises to a certain extent. This paper measures it by comparing the data of canceling or delaying the issuance of bonds and issuing bonds with high coupon in 2020 and 2021, and analyzes the refinancing risk of enterprises in the current period for investors' reference.

We measure the ratio of cancelled or delayed issuance of bonds by calculating the proportion of cancelled or delayed issuance of bonds in the current month to the planned issuance of bonds in the current month. Generally speaking, the proportion of cancelled or delayed issuance of credit bonds in 2021 decreased slightly compared with that in 2020. Although the market anxiety increased to a certain extent in November 2020 or due to the impact of Yongmei incident, resulting in a sharp increase in the number of cancelled or delayed bonds in the current period, it has returned to the normal level since February 21, and the whole year showed a reverse fluctuation trend compared with that in 2020.

In terms of industrial bonds, the proportion of cancelled or delayed issuance of all ratings has increased to a certain extent compared with the previous year. The proportion of low rated bonds has an obvious upward trend. The proportion of AA - grade bonds has increased by 9.26% compared with the same period. The proportion of cancelled or delayed issuance of AA grade bonds is the highest, 22.33%, which has increased by 3.27% compared with 2020; From the attribute point of view, the proportion of local state-owned enterprises and private enterprises canceling or delaying the issuance has decreased.

The overall situation of urban investment bonds is better than that of industrial bonds. From the perspective of rating, the proportion of cancelled or delayed issuance of each rating has an obvious downward trend; From the perspective of administrative levels, the proportion of cancellation or postponement of issuance at district, county and county-level cities has decreased significantly; In terms of regions, the proportion of bonds cancelled or postponed in regions with relatively weak qualifications has increased relatively, of which Qinghai has the highest increase rate and proportion, which is 18.18%.

The level of coupon rate can reflect the recognition of investors to relevant subjects. Higher coupon rate means higher financing cost. The proportion of bonds issued with high coupon in 2021 showed a significant downward trend compared with that in 2020. The proportion of bonds issued in October 2020 decreased significantly. Then, the proportion of bonds issued with high coupon remained stable at about 25% until November 2021, rising to 34.92% at the end of 2021.

In terms of industrial bonds, the proportion of high coupon issuance decreased significantly compared with that in 2020, and the main body of medium and low rated bonds improved significantly. The proportion of AA grade decreased by 26%, and the decline of AA - grade was the highest, 46%; From the perspective of enterprise attributes, except for public enterprises, the proportion of high coupon bonds issued by other types of enterprises has decreased. The decline rate of central state-owned enterprises is 8.14%, that of local state-owned enterprises is 10.79%, and that of private enterprises is 6.25%.

In terms of urban investment bonds, the proportion of high coupon issuance of various ratings and administrative levels is lower than that in 2020, the financing cost of low and medium rating subjects has decreased significantly, and the decline is large in districts, counties and county-level cities. The difficulty of bond issuance increased slightly, and the proportion of high coupon issuance showed an obvious downward trend.

Credit market review: this week, the issuance scale of credit bonds decreased and the net financing amount decreased; This week, the net financing of urban investment bonds was -52.502 billion yuan, which continued to be negative; The net financing of industrial bonds was 157.514 billion yuan, a decrease from last week. The transaction activity of credit bond market increased this week; The yield of medium and short-term notes decreased; A total of 9 credit bond issuers were downgraded, and the main ratings of non credit bond issuers were upgraded.

Risk tips: 1) data update is not timely and extraction error; 2) Increased credit risk; 3) Changes in industry prosperity.

Release date: January 22, 2022

Report author: Zhou Yue, chief of Zhongtai solid income s0740520100003

bank

Dai Zhifeng: the policy is in advance, the banking sector leads the rise, and the northward capital continues to increase its holdings in banks

Calculation of the impact of LPR and MLF downward on the bank's net interest margin and pre tax profit in 2022. The winning interest rate of MLF this week was 2.85%, down 10 basis points; According to the latest LPR quotation, the 1-year LPR and 5-year LPR decreased by 10 / 5 basis points respectively compared with the previous month. It is estimated that the overall net interest margin of the bank in 2022 will be dragged down by 0.44bp and the pre tax profit by 0.4 percentage points. 2. The net interest margin between sectors shows differentiation. The net interest margin pressure of joint-stock banks and urban commercial banks with high proportion of non mortgage retail credit and high proportion of wholesale funds is less than that of other sectors. 3. At present, the restriction on bank valuation is more worried about the economic downturn and insufficient credit demand. The policy is loose to support the economy, and the fundamentals of the sector are expected to be better.

Asset side: in the first three weeks of 2022, the net financing of local bonds and government bonds widened, with a total net financing of 261.7 billion, an increase of 46.7 billion over the same period last year; Net financing of government bonds and local bonds increased slightly. In the first three weeks of January 2022, the net financing of local bonds was 234.7 billion, an increase of 22.2 billion over the same period last year, with a similar rhythm compared with December 21; The net financing of treasury bonds was 27 billion, 24.5 billion higher than the same period last year. In 2022, the financing volume of local bonds has increased and the issuance pace has accelerated. Next week, local bonds are expected to issue 402.149 billion yuan, far exceeding that of the same period last year and December. At present, 21 provinces and cities have disclosed the local bond issuance plan from January to March, with a total disclosure of 1232.4 billion yuan. 2. Liability side: in the third week of January, the net financing differentiation of interbank certificates of deposit was significant, its Chinese stock banks showed net repayment, and urban rural commercial banks were the main support for the financing amount. In the third week of January, state-owned banks and joint-stock banks continued their net repayment, while the net financing amount of inter-bank certificates of deposit of urban commercial banks and rural commercial banks was positive.

Price: monetary policy is moving forward, and interest rates at the negative end of assets are down. 1. Asset side: monetary policy tracking: since January, some funds have been recovered through open market operation, and the interest rate has been reduced to a certain extent. On December 15, 2001, the RRR reduction released nearly 1.2 trillion funds, with loose liquidity at the beginning of the month. The open market operation returned 660 billion in the first week of January. In the third week, the net investment was 450 billion yuan, and an additional 200 billion yuan was invested after the expiration of MLF, so as to maintain the overall reasonable and abundant liquidity. In terms of interest rate, the bid winning interest rates of MLF and Omo decreased by 10bp this week, and SLF also decreased by 10bps. This week, the central bank's open market showed large-scale operation. From the statement of the press conference on financial statistics held by the central bank, it can be seen that the central bank will be more active at the policy level, and clearly put forward "full force, accurate force and forward force". For the follow-up monetary policy, it is expected that the central bank will continue to make efforts to stabilize expectations, confidence and credit. 2. Debt side: the cost of active debt capital decreased. The cost of active debt capital of large banks and small and medium-sized banks decreased to varying degrees compared with last week.

Credit risk: in the first three weeks of January, there were 3 cases of credit debt default, mainly private enterprises. The industry is chemical industry and real estate development, with a total scale of 1 billion. The number of debt defaults showed a downward trend, but the number and amount of relevant credit debt defaults of real estate enterprises rebounded due to the tight financing environment. However, considering the marginal relaxation of the financing policy for real estate enterprises since November, and the current policy emphasizes that there is still room for monetary and fiscal policy under the expectation of "stable growth", we judge that the current credit market risk will be significantly repaired compared with the previous period, and there is no large credit risk as a whole, but individual regions and enterprises will be exposed to individual risks.

Investment suggestion: at present, the safety margin of the sector is relatively high, and the asset quality constructs the safety margin of bank stocks. 1. The core investment logic of bank stocks is macroeconomic. For details, see our relevant in-depth report "how do bank stocks perform when prices rise? - summary and comparison of multiple rounds of performance of bank stocks in China and the United States". We expect that the asset quality of listed banks will be stable in the next few years, which will build the safety margin of bank shares. 2. Banks have two main lines of stock selection. One is our long-term proposal to continue to embrace the core assets of banks: China Merchants Bank Co.Ltd(600036) , Bank Of Ningbo Co.Ltd(002142) , Ping An Bank Co.Ltd(000001) . Their performance is highly sustainable and scarce. The boom of high-quality banks is certain and long-term. First, these scarce high-quality banks have a "market-oriented gene" and "run to make money" in the industry of "lying to make money"; Therefore, in the era of banking differentiation, their growth can be valued continuously. Second, these banks occupy the sunrise track of the financial industry: wealth management and retail; Our in-depth report estimates that the growth rate of wealth management profits in the next decade will be 21% (see detailed calculation of income, profit and market value of "wealth management industry": the golden track with a market value of 10 trillion). The other is to choose banks with undervalued value, safe asset quality and expected successful transformation, and be optimistic about Postal Savings Bank Of China Co.Ltd(601658) , Bank Of Jiangsu Co.Ltd(600919) , Bank Of Nanjing Co.Ltd(601009) and Industrial Bank Co.Ltd(601166) .

Risk warning event: the economic downturn exceeded expectations. The impact of the epidemic exceeded expectations.

Release date: January 23, 2022

Report author: Dai Zhifeng, chief of Zhongtai banking s0740517030004

Deng Meijun, analyst of Zhongtai bank, s0740519050002

medicine

Zhu Jiaqi: the centralized collection scheme of growth hormone and blood products has been implemented, and the medical comfort window period has been actively grasped

Adjustment provides a good opportunity for layout, grasp the undervalued value and repair the market. Affected by the intensive purchase of growth hormone and the overall market style, the pharmaceutical sector made many adjustments this week. This week, the CSI 300 rose by 1.11%, and the pharmaceutical and biological industry fell by - 7.19%, ranking 28th among 28 primary sub industries, among which the biological products sub sector led the decline, with - 10.64%. At present, the premium rate of the pharmaceutical sector relative to all A-Shares (excluding the financial sector) has been at the lowest point since 2015. After the valuation digestion, the track leader gradually enters the adaptation range and overlaps into the performance forecast / express window period, which is expected to drive the overall good performance of the sector. In the follow-up, we continue to suggest to grasp two directions: fundamental improvement and valuation repair of undervalued sectors, such as traditional Chinese medicine, API, chain pharmacies, etc; High prosperity track after continuous adjustment, such as cro / cdmo, upstream of life sciences, medical services, vaccines, etc.

It is suggested to continue to focus on covid-19 therapeutic drugs and industrial chain investment opportunities. On January 20, the Geneva pharmaceutical patent pool (MPP) announced that it had signed non exclusive sublicense agreements with 27 generic pharmaceutical manufacturing companies to produce and supply high-quality and affordable molnupiravir generic drugs, an oral small molecule anti covid-19 drug, for 105 low - and middle-income countries or regions around the world; A total of 5 Chinese pharmaceutical enterprises were shortlisted for the license agreement: Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) , Brightgene Bio-Medical Technology Co.Ltd(688166) , Longze pharmaceutical and Desano were licensed to produce molnupiravir API and finished drug at the same time, and cdmo Langhua pharmaceutical under viabio was licensed to produce molnupiravir API. At the current time point, we believe that the follow-up catalysis of covid-19 therapeutic drugs is expected to continue. It is suggested to focus on three logics: Chinese R & D and innovation enterprises with high progress; Cdmo industrial chain of new drugs created by large overseas pharmaceutical enterprises; And generic API applications in other parts of the world. Such as Shanghai Junshi Biosciences Co.Ltd(688180) , Wuxi Apptec Co.Ltd(603259) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Porton Pharma Solutions Ltd(300363) , Zhejiang Tianyu Pharmaceutical Co.Ltd(300702) , Zhejiang Ausun Pharmaceutical Co.Ltd(603229) , Aurisco Pharmaceutical Co.Ltd(605116) , Zhejiang Hisun Pharmaceutical Co.Ltd(600267) , etc.

Centralized collection of 11 provinces in Guangdong: the selection rules of blood products are mild, and the decline of growth hormone is controllable in the short term. 1) Growth hormone: there are 6 growth hormone enterprises that have obtained the reported quantity this time. According to the grouping rules of purchase orders, Anhui Anke Biotechnology (Group)Co.Ltd(300009) , Kinsey pharmaceutical and United cel enter the a purchase order. The highest valid application price of water needle is about 70% lower than the online price. According to our calculation, the centralized purchase scale of Kinsey pharmaceutical and Anhui Anke Biotechnology (Group)Co.Ltd(300009) obtained the reported volume this time is 117 million yuan and 45.9 million yuan (calculated according to the online price), accounting for a small amount of revenue of the two companies (the revenue of Kinsey pharmaceutical and Anhui Anke Biotechnology (Group)Co.Ltd(300009) in 2020 is 5.8 billion yuan and 1.7 billion yuan respectively), which has a controllable impact on the short-term performance of the company. Considering the large price reduction, the possibility of price linkage inside and outside the hospital and the expansion of alliance procurement to the whole country, the centralized procurement still needs to continue to pay attention to the participation strategies and coping styles of growth hormone related enterprises, especially the three enterprises of Shuizhen. 2) Blood products: the winning rules are relatively mild. The quotation of the declared product regulations of enterprises only needs to be ≤ the low value between the highest valid quotation (P0) and the lowest price in the alliance area to enter the list of proposed winners. There is no limit on the number of winning enterprises; The selected enterprise obtains 100% of the first year's pre purchase volume of the enterprise in the alliance area and obtains incremental use. We expect that the price reduction range is limited: on the one hand, the government's guidance price is relatively loose. Most of the most effective declared prices of the five varieties are 30-40% higher than the online price, and the willingness of enterprises to reduce prices is limited. On the other hand, the indications for medical insurance coverage of blood products are relatively limited, and most of them are still in the out of hospital market not affected by the centralized collection policy. The import proportion of human albumin in China has been maintained at about 60% for a long time, and the proportion of import batch issuance will reach 68.4% in 2020. In particular, the use of imported human albumin products in class III hospitals is high. It is expected that this centralized purchase will promote the use of domestic human albumin in hospitals and further accelerate the substitution of domestic albumin.

Omicron became the mainstream strain, and enhanced vaccination was still effective. Omicron has spread rapidly since it was found. According to the data of who, as of January 4, Omicron strain had appeared in 128 countries and regions around the world. At present, Omicron has become the main strain, accounting for more than 80% in most countries. According to the research published by the national infectious diseases Medical Center (Huashan Hospital Affiliated to Fudan University) on emerging microbes & infections, the virus may still maintain a certain level of transmission after the third injection, but it will improve the group's protection against Omicron and still have the potential to significantly reduce the proportion of severe cases. Considering that the influenza trend of covid-19 epidemic is becoming more and more obvious, it is recommended to pay attention to covid-19 vaccine related development enterprises, including Chongqing Zhifei Biological Products Co.Ltd(300122) , Shenzhen Kangtai Biological Products Co.Ltd(300601) , Cansino Biologics Inc(688185) - u, Walvax Biotechnology Co.Ltd(300142) , etc. In the long run, each vaccine head enterprise has a large number of heavy varieties or is about to go on the market. With the increase of vaccination awareness under the covid-19 epidemic, we expect that the vaccination rate of large varieties is expected to continue to increase and gradually approach the level of developed countries. The class II vaccine industry is expected to achieve a compound growth of 20% - 30% in recent 3-5 years, and is optimistic about Chongqing Zhifei Biological Products Co.Ltd(300122) , Shenzhen Kangtai Biological Products Co.Ltd(300601) , Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) , Chengdu Kanghua Biological Products Co.Ltd(300841) , Hualan Biological Engineering Inc(002007) Changchun Bcht Biotechnology Co(688276) 。

Focus on the performance of individual stocks: in January, focus on: Yaoming biology, Wuxi Apptec Co.Ltd(603259) , Aier Eye Hospital Group Co.Ltd(300015) , Chongqing Zhifei Biological Products Co.Ltd(300122) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Pharmaron Beijing Co.Ltd(300759) , Hangzhou Tigermed Consulting Co.Ltd(300347) , Shanghai Junshi Biosciences Co.Ltd(688180) , Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) , Nanjing Vazyme Biotech Co.Ltd(688105) , Haisco Pharmaceutical Group Co.Ltd(002653) , Zhejiang Tianyu Pharmaceutical Co.Ltd(300702) , Zhejiang Gongdong Medical Technology Co.Ltd(605369) , Zhejiang Starry Pharmaceutical Co.Ltd(603520) , Aurisco Pharmaceutical Co.Ltd(605116) ; The average decline this week was 6.64%, outperforming the pharmaceutical industry by 0.55%.

One week market dynamics: Based on the analysis of the pharmaceutical sector from the beginning of 2022 to the present, the yield of the pharmaceutical sector is - 8.7%, the yield of CSI 300 in the same period is - 3.3%, and the yield of the pharmaceutical sector is - 5.4%. This week, CSI 300 rose by 1.11%, and the pharmaceutical and biological industry fell by - 7.19%, ranking 28th among 28 primary sub industries. Chemical pharmacy, biological products, medical devices, pharmaceutical commerce, traditional Chinese medicine and medical services all fell, with biological products falling first, at - 10.64%; Chemical pharmaceuticals had the smallest decline of - 5.06%.

Risk warning: the risk of policy disturbance, drug quality problems, and the risk of delayed information or untimely update of the public data used in the research report.

Release date: January 23, 2022

Report author: Zhu Jiaqi, chief of Sino Thai medicine s0740519040001

food and beverage

Fan Jinsong: Beer pays attention to the improvement of average price, and its performance slightly exceeds expectations

Baijiu week tracking: Kweichow Moutai Co.Ltd(600519) : channel feedback is now basically completed, and the winery requires the Moutai to be cleared at the end of January, and no notice is made for the payment in February. The dealer has not signed a contract, which is slightly slower than that in previous years. We expect that there may be changes in the marketing and price system in the future. Maotai 1935 press conference: this week we attended the Maotai 1935 press conference. Chairman Ding's speech mainly emphasized three points: first, the profound history since he won the special prize in 19 Second, the craft is inherited from Maotai liquor and the quality is guaranteed; The third is the Chinese red color matching, focusing on the needs of holidays and wedding banquets. In terms of output: the delivery volume varies from region to region. About 50 pieces of each series of wine dealer in Shanghai were delivered in the first batch, and slightly less in other regions. Considering the price control and capacity constraints, we expect that Maotai will not deliver goods every month in 1935. The delivery volume of Maotai in 1935 should be between 1000-1500 tons in 2022, and then gradually increase the volume every year. It is expected that the price and sales volume will have little impact on the competitive products at the price of 1000 yuan in the short term. Quality: Maotai 1935 combines the characteristics of Maotai liquor producing area and base liquor of series liquor producing areas. The smell is close to Feitian, the aroma of the wine is rich and balanced, the taste is slightly thinner than Feitian, and the overall quality is higher than that of Zunyi 1935. Price performance: Maotai delivered goods in batches after the first payment in 1935. At present, some channels are out of stock, resulting in the rapid rise of the wholesale price to 1600-1700 yuan. It is expected that it will fall down after the subsequent supply is sufficient.

The price difference between full container and bulk bottle Feitian narrowed, and the wholesale price of full container Feitian decreased slightly from 50 to 3180 yuan around the week. Bulk bottle Feitian was relatively stable. It was sold in full container Feitian in 2022, and the channel dynamic sales were still strong. Wuliangye Yibin Co.Ltd(000858) : at present, the delivery has been completed for about 2 months and the inventory is 1.5 months. The wholesale price of puwu is stable at about 965, and the classic Wuliangye Yibin Co.Ltd(000858) is stable at about 1800. It is expected that the dynamic sales of the Spring Festival is better than that of last year. Luzhou Laojiao Co.Ltd(000568) : some channels reported that the contracted volume in 2022 increased by more than 20% compared with that in 2021. At present, the delivery has been completed for about 2 months. The bid price is stable at 920-930 yuan. We expect that after the low-cost inventory is cleared, the bid price will have further upward space. Willing: after Fuxing became the owner, it has obvious empowerment for investment promotion and brand promotion. New big businessmen have strong distribution willingness and high retention. The channel profit is higher than Jiannanchun with the same price band, and there are still many blank areas that have not been developed. According to the channel feedback, the payment progress in 2022 is smooth, and the first quarter is expected to start well. Our view: after the recent adjustment of Baijiu sector, the value of high-end liquor has dropped to a low level. We are focusing on Moutai, Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) , the leading high-end and high-end, Jiangsu King'S Luck Brewery Joint-Stock Co.Ltd(603369) and the Yanghe River, which are affected by the epidemic situation and have low PEG.

Ligao Foods Co.Ltd(300973) : revenue was stable and profit performance slightly exceeded expectations. The company released the performance forecast for 2021. It is estimated that the company will achieve revenue of 2.78 billion yuan - 2.85 billion yuan in 2021, an increase of 53.6% - 57.5% at the same time; The net profit attributable to the parent company was 275-295 million yuan, an increase of 18.5% - 27.15% at the same time; Deduct non net profit of RMB 260 million to RMB 280 million, an increase of 15.1% - 24.0% at the same time. After adding back 35 million yuan of excess performance reward expenses and amortization expenses of share based payment, the net profit attributable to the parent company is expected to be 310-330 million yuan, an increase of 33.57% - 42.18% at the same time; Deduct non net profit of RMB 295-315 million, an increase of 30.63% - 39.48% at the same time. Among them, the revenue of 21q4 was 789-989 million yuan, an increase of 29.44% - 62.27% at the same time; Excluding the above effects, the deducted non net profit was 89-109 million yuan, an increase of 23.15% - 50.85% at the same time. Revenue maintained rapid growth, and the growth of frozen baking track showed toughness. In the whole year of 21, the company's frozen baking business maintained rapid growth, mainly due to the rapid growth of key customer Sam, and the rapid volume of single products such as cassava and frozen cake; Meanwhile, bakeries and catering channels still achieved steady growth under the condition of limited production capacity. The profit level slightly exceeded the market expectation. We believe that it is related to the contribution of doughnuts and other high gross margin products to the income after the company's Henan plant was put into operation. Looking forward to 2022, other customers in bakery channel, catering channel and supermarket channel are expected to maintain rapid growth after Henan factory releases production capacity.

Beer: the output will pick up in 2021, and we will continue to pay attention to the increase of average price. According to the National Bureau of statistics, the national beer output in 2021 was 35.624 million kiloliters, with a year-on-year increase of 5.6%, an increase of - 1.8% compared with 2019. Although the epidemic situation showed a normalization trend in 2021, especially in the second half of the year, the output of the beer industry maintained a good recovery trend. In December 2021, the output of beer industry was 2.358 million kiloliters, with a year-on-year increase of 10.9%, an increase of - 2.5% compared with the same period in 2019, which was mainly affected by the outbreak of epidemic in Shaanxi, Henan and other places. From the marginal point of view, the impact of repeated epidemic on the total amount of beer industry continues to weaken. The scene of home consumption of beer develops rapidly after the epidemic, and the total amount of beer industry is expected to stabilize or even continue to recover in the future. At the same time, we continue to emphasize that the promotion of average price to promote the release of profit elasticity is still the core investment logic of the beer sector. In 2022, through structural upgrading + high-end acceleration + direct price increase, the beer industry is expected to achieve strong ASP growth. It is suggested to actively pay attention to sector opportunities. According to the report of beer board, Wusu Beer issued a price adjustment letter. Due to the continuous rise in the prices of raw materials, labor and transportation, resulting in the continuous increase of costs, it decided to increase the price of 620ml red Wusu products from February 1, 2022. At the same time, recently Tsingtao Brewery Company Limited(600600) and Budweiser InBev also launched beer products with a price of 1000 yuan after China Resources snowflake, further leading the industry to develop in the direction of high quality and upgrading.

Dairy products: Jindian, anmushi and Chunzhen continue to promote innovation, and the liquid milk track has grown steadily under the high-quality development. According to the food industry news, Mengniu normal temperature sour milk brand Chunzhen launched a strategic new product - greedy yogurt, adding Tiao sugar, sea salt almond kernel, excellent crisp milk, freeze-dried red heart pitaya Ding, etc. Yili Normal Temperature sour milk brand amuxi launched 0 sucrose "amx Dandong strawberry yogurt", which contains 10% strawberry jam; Jindian, a white milk brand, launched the "new generation of" ultra-6 "ultrafiltration milk". The product is filtered by ultrafiltration process. After 0.2 seconds of ultra instantaneous temperature rise sterilization, it is concentrated with multiple times of raw milk to produce high times of protein milk. The calcium content per 100ml is 180mg and the fat content is 1.5g. We believe that the demand for white milk is rigid in the liquid milk track. Ultrafiltration milk has richer nutrition and longer shelf life than ordinary pasteurized milk. Such product iteration and upgrading can further meet consumers' demand for health and high nutrition. Yogurt has the attributes of dairy products and beverages, so leading enterprises can continue to promote new products to prolong the product life cycle and arouse consumers' freshness. The common high-quality development of white milk and yogurt enables the liquid milk industry to continue to grow steadily under a large volume.

China flying crane: the new Zhuo Rui is listed to enrich the xingfeifan product matrix. According to the news of Securities Daily, on January 20, at the fresh standard upgrade of Feihe milk powder and the launch conference of xingfeifan zhuorei, Feihe officially released a new product - xingfeifan zhuorei. This is the "third member" of the xingfeifan family after the classic xingfeifan and xingfeifan A2. The newly upgraded xingfeifan zhuorei took the lead in adding "lactoferrin + 10x probiotics", which is the first application of Feihe fresh infant formula standard system after upgrading. We believe that the listing of Zhuo Rui is an important embodiment of the "1 + n" matrix created by xingfeifan family. Under the background of longer launch time and larger volume of xingfeifan, the launch of new items can prolong the life cycle of items and contribute to the increment. At the same time, it can enrich the product price system, protect channel profits, and help Feihe steadily improve its share in the infant powder industry, Stabilize the leading position. At the same time, the layout of adult milk powder (Aiben Series) opens the second growth curve.

Promising portfolio in January: Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) , Chongqing Fuling Zhacai Group Co.Ltd(002507) , Juewei Food Co.Ltd(603517) , Luzhou Laojiao Co.Ltd(000568) . The combination logic has not been changed, so we continue to maintain the optimistic combination of last month. In January 2022, the optimistic portfolio and its rise and fall were Juewei Food Co.Ltd(603517) (- 15.54%), Chongqing Fuling Zhacai Group Co.Ltd(002507) (- 11.96%), Luzhou Laojiao Co.Ltd(000568) (- 6.70%), Kweichow Moutai Co.Ltd(600519) (- 3.17%), Wuliangye Yibin Co.Ltd(000858) (- 2.43%) respectively, and the portfolio yield was - 7.94%. Over the same period, the Shanghai Composite Index fell 3.22%, 4.72% higher than the Shanghai Composite Index.

Investment strategy: the layout is at the right time. Our optimistic main line mainly focuses on the following directions: (1) strong HENGQIANG's stable income company: optimistic about Maotai, Wuliangye Yibin Co.Ltd(000858) , Luzhou Laojiao Co.Ltd(000568) , China Resources beer, Tsingtao Brewery Company Limited(600600) , Foshan Haitian Flavouring And Food Company Ltd(603288) , Chongqing Brewery Co.Ltd(600132) , Chacha Food Company Limited(002557) , Chenguang Biotech Group Co.Ltd(300138) and other sub industry leaders; (2) high growth companies with fast expansion in the industry: good fortune in prefabricated food, quick frozen industry, sub high end Baijiu, cheese industry, Fu Jian Anjoy Foods Co.Ltd(603345) , Apple Flavor & Fragrance Group Co.Ltd(603020) , Ligao Foods Co.Ltd(300973) , etc. (3) Companies with cycle reversal and dilemma reversal: epidemic cycle recovery, optimistic about Juewei Food Co.Ltd(603517) , Chongqing Fuling Zhacai Group Co.Ltd(002507) , Sichuan Teway Food Group Co.Ltd(603317) , Haidilao, leading oil enterprises, leading meat products, etc. it is recommended to pay attention to Yihai International; After adjustment, it is expected to accelerate. It is optimistic about Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , Jonjee Hi-Tech Industrial And Commercial Holding Co.Ltd(600872) . It is recommended to pay attention to Anhui Yingjia Distillery Co.Ltd(603198) , Shede Spirits Co.Ltd(600702) , Zhou Heiya.

For detailed attention logic, please refer to strategy for 2022: price recovery is expected to accelerate the release of performance.

Risk tips: risk of global and Chinese epidemic spread, risk of large outflow of foreign capital, sauce and wine inventory and policy.

Release date: January 23, 2022

Report author: Fan Jinsong, chief of Zhongtai food and beverage s0740517030001

Xiong Xinxin, Sino Thai food and beverage analyst s0740519080002

light industry

Guo Meixin: the new atomization technology has been officially released, and the fundamentals and valuation can be repaired

Update of social housing and real estate data in December 2021: 1) real estate: in December 2021, the sales, newly started and completed areas of commercial housing in China were 174, 113 and 234 million m3 respectively, with monthly growth rates of - 19.4%, - 33.1% and + 0.8% (an increase of - 10.2%, - 29.1% and + 3.1% respectively compared with the same period in 2019). The cumulative growth rate from January to December was + 1.1%, - 10.9% and + 10.8% respectively (an increase of + 4.3%, - 12.6% and + 7.4% respectively compared with the same period in 2019). 2) Social retail: in December 2021, the retail sales of social retail, furniture and cultural office supplies in China increased by + 1.7%, - 3.1% and + 7.8% year-on-year (it is estimated that the CAGR in the two years is + 3.1%, - 1.4% and + 8.5% respectively); Cumulatively, from January to December 2021, the year-on-year growth rates of social accessories, furniture and cultural office supplies in China were + 12.5%, + 14.5% and + 18.8% respectively (it is estimated that the CAGR in the two years is + 4.0%, + 3.2% and + 12.1% respectively).

Home: continue to prompt home repair opportunities, and the leading target is in the long-term layout window.

\u3000\u3000 β Level: due to the joint efforts of multiple factors such as short-term interest rate reduction, consumption promotion and real estate policy, the channel for sector valuation repair has been opened. Under the tone of steady growth, there is room for further improvement in policy, which is expected to continue to catalyze the repair of sector Valuation: 1) this week, the central bank reduced the one-year and five-year LPR by 10 and 5 BP respectively on January 20, following the linkage reduction of 10 BP by MLF and Omo, emphasizing the initiative of the monetary policy toolbox to form a relaxed environment. 2) In January, the consumption promotion notice once again proposed to "effectively expand county rural consumption" and "promote the upgrading of rural durable consumer goods". Enterprises with weak service dependence and full sinking of channels and product matrix are expected to benefit first. 3) The real estate credit risk release is superimposed on the improvement of financing, and the real estate chain enterprise bill impairment and other expectations are fully implemented with the performance disclosure. It is expected to be light in 2022.

In the long run, low market share + category and channel expansion, leading enterprises are expected to cross the cycle. From the peak of sales in 2018 to the sharp decline of land acquisition in 2021, in the downward cycle of real estate in the past three years, the core competitiveness of leading enterprises such as brands and channels at the micro operation level has been continuously consolidated, driving the steady growth of business. Based on the category and channel extension dimensions, the long-term market share improvement path of head enterprises is clear, and the leading growth is expected to go through the cycle.

Investment suggestion: subject to β The undervalued target suppressed by factors is more flexible in this round of repair, and the leading target is in the long-term layout window. Combined with the growth and valuation level, 1) it is recommended to pay attention to the functional sofa leader [Minhua holdings], the elastic target of the continuous release of category channel dividends [ Zbom Home Collection Co.Ltd(603801) ], and [ Suofeiya Home Collection Co.Ltd(002572) ] with the expectation of management and operation improvement; 2) Long term optimistic about the household leader [ Jason Furniture (Hangzhou) Co.Ltd(603816) ] with the continuous consolidation of C-end core competitiveness and the ability to cross the cycle (the short-term shareholding reduction plan has been implemented, and the early share price suppression factor has been removed) [ Oppein Home Group Inc(603833) ], and the improvement of independent brand retail business under equity incentive, employee stock ownership and omni-channel promotion [ Xlinmen Furniture Co.Ltd(603008) ].

New type of tobacco: atomization fundamentals to build the bottom, and technical iteration to highlight the leading competitiveness. On January 21, SIMORE International released the performance forecast for 2021. According to the calculation of the forecast center, the company achieved an adjusted net profit of 5.44 billion yuan, an increase of 39.8%, Q4 achieved an adjusted net profit of 1.22 billion yuan, a year-on-year increase of - 14.4% and a month-on-month increase of - 2.3%, and the performance matched the expectation. Recently, the company officially released a new generation of atomization technology "feelm air" in London. It adopts bionic thin-film ceramic core to achieve the ultimate lightweight experience. At the same time, it has made great breakthroughs in harm reduction, taste and efficiency, leading the atomization technology into a new era and widening the technical gap with the same industry again. We believe that the global trend of new tobacco has become, the industry will continue to develop healthily under supervision, and the leading enterprises with product, technology and brand advantages will benefit. It is suggested to pay attention to the targets of HNB industrial chain [Huabao international], [ Shenzhen Jinjia Group Co.Ltd(002191) ], and the OEM leader of atomization industrial chain [SIMORE international].

Papermaking: pulp prices rise and fall, and pay attention to the high prosperity of special paper. The average price of coniferous pulp and broad-leaved pulp this week was 6225 and 5209 yuan / ton, with a month on week ratio of - 0.37 and + 1.11% respectively; The closing price of this week's main pulp futures contract (sp2205) was 6258 yuan / ton, up + 2.19% from last week. Under the catalysis of environmental protection policies such as consumption upgrading, domestic substitution and plastic restriction order, the demand for medium and high-end special paper for specific purposes is expected to further expand, and the prosperity of subdivided circuits is high. At the same time, because the special paper has the production characteristics of "small batch and customization", the direct sales mode is usually adopted, which reduces the links of channels, flexible quotation mode and better profit model. It is suggested to pay attention to the special paper leader [ Xianhe Co.Ltd(603733) ] with rich product matrix, high downstream prosperity, prominent manufacturing and management advantages, and rapid expansion of production capacity.

Looking forward to 2022, the profit and valuation of the light industry sector can be repaired. It is recommended to allocate growth tracks and individual stocks:

Household sector: focus on profit and valuation repair, leading stocks through the cycle. The positive contribution of completion is expected to run through the whole year of 2022, but due to the decline of new construction data, the marginal contribution is expected to weaken, and the bottom of the current real estate policy has been realized, or the policy catalysis may be additionally welcomed. Follow three main investment lines: 1) the domestic retail business line prefers the software sector with optimized pattern and stable demand, and is optimistic about the software leader with continuous consolidation of C-end core competitiveness and cycle crossing ability for a long time. Focus on core target: [ Jason Furniture (Hangzhou) Co.Ltd(603816) ] [ Xlinmen Furniture Co.Ltd(603008) ], it is recommended to focus on: [Minhua holdings]. 2) The customization sector focuses on the valuation and repair opportunities catalyzed by policies, and selects leading enterprises with competitive barriers in category expansion, supply chain management and channel extension. Focus on core target: [ Oppein Home Group Inc(603833) ] [ Zbom Home Collection Co.Ltd(603801) ] [ Suofeiya Home Collection Co.Ltd(002572) ]. 3) Under the influence of shipping, exchange rate and raw material price, the short-term export profit is under pressure, the external pressure factors are alleviated, the export chain profit is expected to repair and realize the bottom reversal, and the medium and long-term growth logic of the leading export chain enterprises with track growth and overseas operation advantages remains unchanged. Focus on core target: [ Loctek Ergonomic Technology Corp(300729) ], recommended focus: [ Keeson Technology Corporation Limited(603610) ] [ Healthcare Co.Ltd(603313) ].

Paper packaging: the cycle falls, and the boom track is preferred. At present, the paper industry has entered the passive inventory stage with limited demand side support. Next year, it will enter the centralized release period of production capacity, and the leading paper enterprises will lead the expansion of production capacity. In the long run, under the background of the promotion of double carbon policy and the clearing of foreign waste imports, the logic of industry concentration improvement will be deduced for a long time. Under the catalysis of environmental protection policies such as consumption upgrading, domestic substitution and plastic restriction order, the demand for medium and high-end special paper for specific purposes is high, and the profit model is better than that of bulk paper. With the decline of papermaking cycle and the stabilization of raw material prices, we believe that the leading packaging and printing companies have also ushered in a profit inflection point.

Focus on core subject: [ Shandong Sun Paper Co.Ltd(002078) ] [ Xianhe Co.Ltd(603733) ] [ Shenzhen Yuto Packaging Technology Co.Ltd(002831) ].

Required consumption: the rise of C-end domestic products, focusing on demand repair and individual stock growth. In 2021, mass consumption is weak as a whole, the transmission of upstream cost pressure is blocked, and corporate profits are under pressure. Looking forward to next year, the marginal impact of the epidemic on consumption is weakened. Since November, the ppi-cpi scissors gap has narrowed, and the cost pressure has slowed down. Under the background of clearing the midstream pattern and repairing the downstream demand, the sector profit is expected to be repaired. At present, leading stocks are at a low valuation, and they are optimistic about the repair of sector valuation and the growth of C-end leaders for a long time. Focus on core object: [ Shanghai M&G Stationery Inc(603899) ] [ Chongqing Baiya Sanitary Products Co.Ltd(003006) ].

New type tobacco: the trend has become and has entered a new stage of benign development. Overseas: the transformation strategy of international tobacco giants to "new tobacco" is firm. Driven by the giants, the global new tobacco market has penetrated rapidly, and the new tobacco trend has become a trend. China: 1) atomization: the e-cigarette regulatory policy is intensively released, and the stricter regulation is expected to promote the benign development of the industry. Under the implementation of the policy, the margin of uncertainty is weakened, and the leading enterprises with product, technology and channel barriers benefit. 2) HNB: with the implementation of e-cigarette policy, the sector is expected to usher in a new round of policy catalysis, and the opening of HNB tobacco market is also expected to speed up. It is suggested to actively pay attention to the industrial chain opportunities led by China tobacco. It is suggested to pay attention to: [Huabao international] [ Shenzhen Jinjia Group Co.Ltd(002191) ] [smore international].

Risk tips: the risk of sharp rise in raw material prices, the risk of decline in the prosperity of real estate, the risk of changes in international trade policies, and the risk of deviation of calculation results

Release date: January 23, 2022

Report author: Guo Meixin, head of Zhongtai light industry s0740520090002

military industry

Chen Dingru: the performance forecast is mixed. On the whole, the high prosperity of the industry has been reconfirmed

1. Market review this week

This week, the Shenwan national defense industry index fell 5.61%, the Shanghai Composite Index rose 0.04%, the gem index fell 2.72%, the Shanghai and Shenzhen 300 index rose 1.11%, and the national defense industry sector ranked 27th among the 28 Shenwan level industries.

2. The performance of upstream components continued to exceed expectations, and the prosperity of the industry was reconfirmed

This week, many companies released performance forecasts or performance letters for 2021. The performance of the main targets of the upstream components sector continued to grow high, and the performance growth of some targets continued to exceed expectations. Among them, the performance of Unigroup Guoxin Microelectronics Co.Ltd(002049) increased by 136% - 160%, the performance of China Zhenhua (Group) Science & Technology Co.Ltd(000733) increased by 123% - 156%, and the performance of Fujian Torch Electron Technology Co.Ltd(603678) increased by 57.51% - 67.35% year-on-year. The performance growth of the above targets continued to exceed market expectations, The high prosperity of the military industry was reconfirmed. In the midstream manufacturing sector, Avic Heavy Machinery Co.Ltd(600765) performance increased by 153.05% year-on-year. As the core target in the aviation manufacturing field, its performance continued to exceed market expectations, which fully verified that the scale effect brought by the high prosperity of the aviation manufacturing industry and the release of downstream demand is becoming increasingly significant. With the orderly transmission of industry prosperity from top to bottom, the performance growth of middle and lower cursors is expected to accelerate. During the 14th Five Year Plan period, the prosperity of the industry continued to improve, and the trend remained unchanged. It is suggested to focus on and allocate high-quality growth targets that have been wrongly killed recently.

3. The performance of some targets of the aviation department is lower than expected, resulting in short-term disturbance, and the general development trend of the industry remains unchanged

Aviation listed companies represented by Avic Shenyang Aircraft Company Limited(600760) and Avic Electromechanical Systems Co.Ltd(002013) also released performance forecasts this week. In Avic Shenyang Aircraft Company Limited(600760) 2021, the net profit attributable to the parent company was 1.696 billion yuan, a year-on-year increase of 14.56%; Avic Electromechanical Systems Co.Ltd(002013) in 2021, the net profit attributable to the parent company was 1.259 billion yuan, a year-on-year increase of 17.18%. The performance is significantly lower than the market expectation, resulting in pressure on the military industry sector. The lower performance is related to the increase of R & D expenses. We believe that the lower performance of some enterprises is only a short-term disturbance. According to the previously announced contract liabilities, production expansion plan and the performance of upstream supporting enterprises, the great development of aviation manufacturing industry in the 14th five year plan has a stable foundation, The high prosperity of the industry is also conducted from top to bottom, and the performance can be realized. The general development trend of the industry remains unchanged. From the medium and long-term perspective, the aviation manufacturing industry chain still has great investment opportunities.

4. Focus this week

1) focus on military electronic components with low valuation and high performance flexibility: China Zhenhua (Group) Science & Technology Co.Ltd(000733) , Zhuzhou Hongda Electronics Corp.Ltd(300726) , Beijing Yuanliu Hongyuan Electronic Technology Co.Ltd(603267) .

2) focus on midstream aviation manufacturing targets with gradual scale effect and significant improvement of comprehensive supporting capacity: Avic Heavy Machinery Co.Ltd(600765) , Chengdu Ald Aviation Manufacturing Corporation(300696) , Chengdu Haoneng Technology Co.Ltd(603809) , Anhui Yingliu Electromechanical Co.Ltd(603308) .

3) focus on the overall and key systems of weapons and equipment with monopoly and scarcity and huge long-term growth space: Avic Shenyang Aircraft Company Limited(600760) , Aecc Aviation Power Co Ltd(600893) , Avicopter Plc(600038) , Aecc Aero-Engine Control Co.Ltd(000738) and Wuhan Guide Infrared Co.Ltd(002414) .

4) it is suggested to pay attention to the beneficiary objects of the mixed reform of state-owned enterprises: Chengdu Spaceon Electronics Co.Ltd(002935) , Aerospace Ch Uav Co.Ltd(002389) , Avic Xi'An Aircraft Industry Group Company Ltd(000768) , Avicopter Plc(600038) , Guizhou Space Appliance Co.Ltd(002025) and Sun Create Electronics Co.Ltd(600990) .

Risk warning: the release and delivery of military orders are not as expected; Performance growth is less than expected; The reform of state-owned enterprises did not advance as expected.

Release date: January 23, 2022

Report author: Chen Dingru, chief of Sino Thai military industry s0740521080001

steel

Guo Hao: the steel market tends to be light

Investment strategy: near the Spring Festival, the trading of steel market tends to be light. Recently, the price of iron ore is relatively strong, the steel price rises slightly driven by the cost, and the profit of steel smelting shrinks. On the whole, the market is still trading, and the steel enterprises resume production. Hot metal production has been on the rise since the end of last year, with the share of extruded electric furnace steel and the profit per ton of steel declining. The Winter Olympics after February may lead to the phased strengthening of production restriction in North China, which may be conducive to the stabilization of the profit per ton of steel, but the supply policy will face uncertainty again after March. At that time, the profit of steel will depend on the steady growth demand pulse and the loosening of the supply side. Overall, this year's steel profit is expected to be a lower level than last year. It is suggested to look for opportunities in the growing new material industry and pay attention to Zhejiang Yongjin Metal Technology Co.Ltd(603995) , Zhangjiagang Guangda Special Material Co.Ltd(688186) , Fushun Special Steel Co.Ltd(600399) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) , Yongxing Special Materials Technology Co.Ltd(002756) , etc.

One week market review: this week, the Shanghai Composite Index rose 0.04%, the Shanghai and Shenzhen 300 index rose 1.11%, and the Shenwan steel sector fell 0.24%. This week, the main contract of rebar closed at 4711 yuan / ton, with a week-on-week increase of 47 yuan / ton, a range of 1.01%; the main contract of hot rolled coil closed at 4822 yuan / ton, with a week-on-week increase of 50 yuan / ton, a range of 1.05%; The main iron ore contract closed at 756.0 yuan / ton, with a week-on-week increase of 34 yuan / ton, an increase of 4.64%.

The trading volume decreased significantly: the weekly average of the national construction steel trading volume this week was 56400 tons, with a month on month decrease of 62700 tons. The social inventory of the five varieties was 9.702 million tons, an increase of 547000 tons month on month. This week, the downstream of building materials basically had a holiday, the trading volume decreased significantly, and the price of construction steel was consolidated. Next week is the last week before the Spring Festival, and there is still room for downward trading volume. In terms of inventory, with the weakening of market trading sentiment, the pace of steel outsourcing slowed down, the self storage of steel mills increased, and the factory warehouse was switched to the cumulative warehouse state.

Significant differentiation of blast furnace and electric furnace: this week, the blast furnace operating rates of 247 Mysteel steel enterprises and Tangshan Steel Plant were 76.25% and 54.76% respectively, with a month on week increase of + 0.48pct and flat; This week, the blast furnace capacity utilization rates of 247 Mysteel steel enterprises and Tangshan Steel Plant were 81.08% and 71.84% respectively, with a month on week increase of + 1.19pct and + 1.22pct.

The operating rate of 71 home appliance arc furnaces this week was 25.52%, with a month on week ratio of -11.17pct; The capacity utilization rate was 29.02%, up from -9.93pct last week. In terms of blast furnace this week, the resumption and increase of production continued, and the output of molten iron continued to increase; In terms of electric furnace, in the case of loss in electric furnace steel production, the short process steel plant chose to take a holiday in advance, and the shutdown time was earlier than the same period last year. In terms of overall output, the output reduction caused by the shutdown of electric furnace steel is greater than the increment of blast furnace steel, and the output drops.

Steel price fluctuated in a narrow range: myspic comprehensive steel price index increased by 0.34% on a weekly basis, including 0.32% for long materials and 0.38% for sectors. Shanghai rebar 4730 yuan / ton, a decrease of 20 yuan / ton on a week-on-week basis, an increase of 0.42%. Shanghai hot rolled coil 4950 yuan / ton, an increase of 10 yuan / ton on a weekly basis, an increase of 0.20%. The demand for steel has entered the traditional off-season, and it is impossible to judge the trend of steel price from the perspective of supply and demand. At present, the steel price mainly depends on the market's expectation of the market after the festival.

The ore price rose slightly: this week platts62%133.65 US dollars / ton, the weekly ring ratio increased by 6.9 US dollars / ton, and the price difference between high and low products expanded. Last week, the shipment volume of Australia and Brazil was 20.724 million tons, an increase of 851000 tons month on month, and the arrival volume was 11.862 million tons, a decrease of 269000 tons month on month. The latest steel mill imported ore inventory days are 30 days, unchanged from the last time. Tianjin Zhunyi metallurgical coke was 3210 yuan / ton, unchanged from last week. Scrap 3190 yuan / ton, 20 yuan / ton less than last week. The price of iron ore rose slightly this week. The ore price has rebounded significantly since November, which is related to the recovery of demand, inventory cycle and winter storage. The sustainability of these factors is limited. In the medium and long term, the ore price is expected to fluctuate downward.

Downward profit: the profit of mainstream steel has been declining for more than months. According to the steel data we simulated, the billet cost further increased during the week driven by the rising prices of coke, iron ore and ferroalloy at the raw material end. The price of finished timber end is still dominated by shock. At present, the profit per ton of steel squeezed by the cost continues, in which the gross profit of hot rolled coil (3mm) is reduced by 23 yuan / ton, and the gross profit margin is reduced to 8.53%; The gross profit of cold rolled sheet (1.0mm) is reduced by 77 yuan / ton, and the gross profit rate is reduced to 3.31%; The gross profit of deformed steel bar (20mm) is reduced by 52 yuan / ton, and the gross profit margin is reduced to 8.31%; The gross profit of medium and heavy sector (20mm) is reduced by 23 yuan / ton, and the gross profit margin is reduced to 4.58%.

Risk tip: the sharp decline of macro economy leads to pressure on demand; The pressure at the supply end continues to increase.

Release date: January 23, 2022

Report author: Guo Hao, chief of Zhongtai iron and steel s0740519070004

coal

Chen Chen: the price continues to rise, the performance of coal enterprises breaks out, and the sector market is expected to continue to deduce

This week, coal prices continued to rise. Near the Spring Festival, some coal mines have stopped production, and the supply side continued to tighten; The downstream is worried about the impact of factors such as coal mine holidays and transportation bottlenecks. The goods are actively prepared, there are many coal mine transportation vehicles, and the upward trend of price continues. Recently, with the steady recovery of the inventory of Indonesia's state power company and terminal power plants, the government has lifted the export ban on 139 coal producers. As of January 18, a total of 48 coal ships in Indonesia have been allowed to leave the port. It is expected that the international coal supply will improve. We still need to pay attention to the follow-up measures of the Indian government. Last week, many coal enterprises disclosed the performance forecast for 2021, Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) realized a net profit attributable to the parent company of 4.87 billion yuan (+ 4.6 times), Shanxi Coal International Energy Group Co.Ltd(600546) 4.5-5 billion yuan (+ 4.4-5.0 times), Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) 2.15-2.45 billion yuan (+ 4.7-5.5 times). The significant release of coal enterprise performance and the full release of superimposed coal price risk are conducive to the continuous catalysis of the sector market. In the medium and long term, under the background of lack of planned investment, the constraints on the coal supply side are strong. Under the background of small annual growth in demand, coal will be a scarce resource in the next few years, and the stock capacity or high profits. The increase of the benchmark price of the annual long-term association also ensures the ability of the industry to maintain high profitability. Under the dual carbon goal, coal enterprises urgently need to transform, invest in energy Yankuang, Shenhua, Gansu Jingyuan Coal Industry And Electricity Power Co.Ltd(000552) , Shanxi Meijin Energy Co.Ltd(000723) and others mainly focus on new energy operation and hydrogen energy. The coal industry has the advantages of strong cash flow and rich land resources in new energy operation, and has the ability and willingness. The transformation of new energy direction is conducive to improving the overall sector valuation level, and the coal assets need to be repriced, Continue to be optimistic about the investment value of the sector. Thermal coal stocks are recommended to pay attention to: Shaanxi Coal Industry Company Limited(601225) , Yanzhou Coal Mining Company Limited(600188) , China Shenhua Energy Company Limited(601088) , China Coal Energy Company Limited(601898) , power investment and energy, Beijing Haohua Energy Resource Co.Ltd(601101) . Metallurgical coal stocks are suggested to pay attention to: Shanxi Lu'An Environmental Energydev.Co.Ltd(601699) , Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Shanxi Coking Coal Energy Group Co.Ltd(000983) , Huaibei Mining Holdings Co.Ltd(600985) , Jizhong Energy Resources Co.Ltd(000937) , Shanxi Coking Co.Ltd(600740) . Anthracite recommended attention: Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) . Coke stocks are suggested to pay attention to: Shanxi Meijin Energy Co.Ltd(000723) , Jinneng Science&Technology Co.Ltd(603113) , China Xuyang group, Kailuan Energy Chemical Co.Ltd(600997) , Shaanxi Heimao Coking Co.Ltd(601015) .

Summary and Prospect of thermal coal: near the Spring Festival, the downstream continues to replenish the reservoir, and the coal price continues to rise. This week, the price of 5500 kcal thermal coal produced in QinGang Shanxi was 1000 yuan / ton, up 55 yuan / ton on a weekly basis, continuing the rise. In terms of supply, near the Spring Festival, some small mines stopped production and had holidays, and most of the coal mines in production were in normal production, so the supply continued to be slightly tight; The downstream replenishment is active, the queue of hauling vehicles is common, and the price of pit mouth has increased. In terms of import, traders are cautious about the current coal import transactions in China, and the transactions are concentrated in overseas markets; According to the importer, Indonesian coal is being released in batches, and some pallets are expected to arrive at the end of January and February. In terms of demand, affected by the Winter Olympic Games and the shutdown and holiday near the Spring Festival, the downstream terminal has a positive demand for goods preparation in the near future, mainly the phased replenishment demand of chemical non electric enterprises. Overall, the coal supply continued to be slightly tight this week, the Indonesian export ban was relaxed, the overseas market demand was strong, and the downstream staged replenishment continued, providing strong support for the coal price. Follow up attention was paid to the demand in the peak season and Indonesia's arrangements.

Summary and Prospect of coking coal: both supply and demand are weak, mainly stable. As of January 21, the price (including tax) of Shanxi main coke coal depot in Jingtang Port has been increased by 2830 yuan / ton. In terms of supply, coal mines in some areas of Inner Mongolia and Shanxi stopped production and had holidays, and the supply side decreased. In terms of import, due to Mongolia's private change of closed-loop mode, the Chinese side suspended the accounting and testing of Mongolian drivers on the 18th. On the 19th, there was no customs clearance at Ganqi Maodu port. On the 3rd of this week, the average daily customs clearance was 92 vehicles (week on week - 6 vehicles). Mongolia's coal resources are very limited. In terms of demand, the coke inventory of steel mills is high, the production restriction policy has gradually begun, the coke market sentiment has weakened, and the demand is weak. On the whole, both supply and demand are tightened, the short-term market is mainly stable, and follow-up attention is paid to the implementation of limited production.

Coke summary and Outlook: the balance between supply and demand will be maintained before the festival. As of January 21, the price of secondary metallurgical coke in Tangshan was 3200 yuan / ton, up 140 yuan / ton on a weekly basis, and the national average profit per ton of coke was about 183 yuan / ton. In terms of supply, the market was temporarily stable after the fourth round of increase. With the recovery of coke enterprises' profits, the construction of coke enterprises picked up steadily. However, with the approaching of the Winter Olympic Games, coke enterprises in some regions received the notice of production restriction, and the shipment of some coke enterprises was blocked due to the weather and epidemic situation. In terms of demand, the production restriction policy of the Winter Olympic Games has gradually become clear, the procurement of downstream steel mills has slowed down, and the weather and epidemic situation have led to poor arrival of some steel mills, affecting market sentiment. On the whole, coke supply tightened, demand weakened, the market gradually stabilized, and follow-up attention was paid to the shipping situation and the production restriction policy of the Winter Olympic Games.

Power coal: the price of port coal rises, and the port inventory increases. (1) As of January 21, the price of 5500 kcal Shanxi thermal coal in Qinhuangdao port was 1000 yuan / ton, up 55 yuan / ton on a weekly basis.

(2) As of January 20, the price of power coal in Newcastle was US $227.21/ton, up 4.9% week on week. (3) As of January 21, the transfer in volume of Qinhuangdao port railway was 484000 tons, an increase of 84000 tons on a weekly basis. (4) As of January 21, the inventory of Qinhuangdao port was 4.1 million tons, an increase of 50000 tons on a weekly basis. The coal inventory in the Yangtze River Estuary was 3.23 million tons, with a decrease of 170000 tons on a weekly basis.

Coking coal: the price of coking coal in China has risen, and the inventory of coking plants has increased month on month. (1) As of January 21, the price increase (including tax) of the main coking coal depot produced in Shanxi of Jingtang Port was 2830 yuan / ton, unchanged on a week-on-week basis. (2) As of January 20, the price of hard coking coal in Fengjing mine was US $446.50/ton, up 5.43% on a weekly basis. (3) As of January 21, the total inventory of coking coal of China's independent coking plants (100) was 13.58 million tons, an increase of 694200 tons on a weekly basis.

Coke: the price rose month on month, and the operating rate of coking plant increased. (1) As of January 21, the price of secondary metallurgical coke in Tangshan was 3200 yuan / ton, up 140 yuan / ton on a weekly basis. (2) As of January 21, the coke oven productivity of China's independent coking plants (100) was 76.70%, with a week on week increase of 2.41%. (3) As of December 24, the national blast furnace operating rate was 45.99%, with a decrease of 0.42% on a weekly basis. (4) As of January 21, the total coke inventory of three types of coking enterprises (production capacity 2 million tons) was 737000 tons, with a decrease of 65800 tons around the ring.

Review of industry highlights: (1) the national Standing Committee: maintain normal coal production and give priority to ensuring coal transportation for power generation and heating; (2) SASAC: by the end of last year, the inventory of power coal of central power generation enterprises had reached 95.69 million tons; (3) Shanxi's medium and long-term coal contract signing reached a new high in 2022; (4) IEA: the increase in demand led to a record high carbon emission of the power industry in 2021 (5) Indonesia lifted export ban on 139 Coal Enterprises

Risk warning: the economic growth rate is lower than expected; Excessive policy regulation; Renewable energy substitution, etc; Coal import impact risk.

Release date: January 23, 2022

Report author: Chen Chen Zhongtai coal analyst s0740518070011

chemical

Xie Nan: Wanhua established Penglai Co., Ltd. to develop green chemical industrial park

Since the beginning of the year, the sector has slightly lagged behind the market: this week, the chemical (Shenwan) industry index fell by - 4.32%, the gem index fell by - 2.72%, the Shanghai and Shenzhen 300 index rose by 1.11%, the Shanghai Composite Index rose by 0.04%, and the chemical (Shenwan) sector lagged behind the market by 4.36 percentage points. Since the beginning of 2022, the chemical (Shenwan) industry index has increased by - 7.57%, the gem index by - 8.67%, the CSI 300 index by - 3.26%, the Shanghai Composite Index by - 3.22%, and the chemical (Shenwan) sector lags behind the market by 4.35 percentage points.

Event: Wanhua Chemical Group Co.Ltd(600309) Wanhua Penglai Co., Ltd. was established to develop a green chemical industrial park. Enterprise investigation shows that on January 17, Wanhua Chemical Group Co.Ltd(600309) (Penglai) Co., Ltd. was established with a registered capital of 1 billion yuan. The company is jointly held by Wanhua Chemical Group Co.Ltd(600309) and Ningbo Zhongtao.

Comments:

1) build 900000 tons of propylene and downstream projects, with obvious location advantages in front of port and back of plant. According to Penglai municipal government, Wanhua Penglai phase I project covers an area of about 2.2 square kilometers with a total investment of 21 billion yuan. It mainly constructs 900000 tons of propylene and downstream related projects, and the benefit is expected to reach the post production output value of 23 billion yuan. According to our analysis, Wanhua Penglai is expected to build another set of PDH device and build Wanhua Penglai high-end new material low-carbon industrial park. Penglai Beigou has obvious regional advantages. The former port and the latter factory facilitate the transportation of raw materials and products, further expand the production scale of Wanhua C3 industrial chain, and promote the transformation and upgrading of polyolefin industrial chain.

2) the petrochemical sector aims at high-end and further improves its market competitiveness. In the year of 21, the ethylene phase I unit was put into operation, the volume and price of petrochemical products increased simultaneously, and the profitability of the sector increased significantly. The new renewable energy and raw material energy will not be included in the total energy consumption control. We analyze that the second phase of ethylene is expected to accelerate. Poe products have excellent performance. We expect that in 2025, China's Poe demand is expected to exceed 900000 tons, and Wanhua's sales volume is expected to reach 200000 tons. The demand for POE photovoltaic materials is growing rapidly. At the same time, we analyze that Poe is expected to drive the coordinated development of PP and other polyolefins and enhance the competitiveness of Wanhua Poe modified PP and other high-end polyolefin industries.

Product prices rose and fell with each other: the products with the highest price increase include 107 glue (Xin'an chemical) (22.09%), vitamin B5 (calcium pantothenate, 98%) (19.64%), octanol (13.62%), maleic anhydride (12.98%) and butyl acrylate (12.59%).

The products with the highest price decline include isobutyraldehyde (- 22.74%), dichloromethane (- 10.81%), Henry hub Futures (- 8.19%), butadiene (- 6.56%) and ethylene oxide (- 5.48%).

Risk warning events: macroeconomic downside risk, crude oil price fluctuation risk and enterprise operation risk.

Release date: January 23, 2022

Report author: Xie Nan, chief of Zhongtai chemical s0740519110001

environmental protection and public

Wang Lei: the implementation plan for promoting green consumption will be implemented, and the green electricity consumption mechanism will be fully established

Market review: this week, the public utilities (Shenwan) industry index fell 0.68%, underperforming the Shanghai and Shenzhen 300 index by 1.79%, and the performance of the sector was weaker than the market. The environmental protection industry and fine-grained industries showed a downward trend, with a large decline in monitoring & detection. Among the sub sectors of the public sector, thermal power and hydropower led the increase.

Special research: the national development and Reform Commission and other departments issued the implementation plan for promoting green consumption, proposing to improve the market mechanism of green power consumption, and the payment mechanism of green power (green certificate) consumption will be fully established to help implement the "double carbon" target policy. The demand for green power (or green card) will increase significantly, and the green power premium is expected to increase. After clarifying the power carbon development mechanism, we can realize the effective transmission of green power value.

Industry dynamics: according to the data of the national energy administration, in 2021, China's newly installed photovoltaic capacity was 53gw, showing an increasing trend. Among them, distributed PV added about 29gw, accounting for about 55% of the total newly added PV installed capacity, reflecting the rapid growth trend of distributed PV installed capacity. With the rapid growth of the installed scale of distributed photovoltaic, the superposition of the mode of "spontaneous self use and surplus power on the Internet" of distributed photovoltaic has a higher rate of return, which is optimistic about the investment opportunities of distributed photovoltaic operators.

Investment suggestion: the "14th five year plan" period is the key time window for reaching the peak of carbon, the intensity of carbon control and emission policy is expected to exceed expectations, and the environmental protection public utility industry will usher in development opportunities. The promotion of carbon neutralization policy has opened up new growth space and brought incremental income sources for the development of environmental protection industry, and grasped the four investment directions of low-carbon development on the supply side, electrification on the consumer side, infrastructure of carbon trading, and incremental income of CCER caused by carbon trading. It is recommended to pay attention to Pony Testing International Group Co.Ltd(300887) , China Building Material Test & Certification Group Co.Ltd(603060) , Centre Testing International Group Co.Ltd(300012) , Grandblue Environment Co.Ltd(600323) , Chongqing Sanfeng Environment Group Corp.Ltd(601827) , Shanghai Environment Group Co.Ltd(601200) , Shandong Intco Recycling Resources Co.Ltd(688087) . The implementation of the sixth national plan brings opportunities for post-processing industrial chain. It is suggested to pay attention to Wuxi Longsheng Technology Co.Ltd(300680) , Jiangsu Lopal Tech.Co.Ltd(603906) . Waste recycling brings new market opportunities. It is suggested to pay attention to the rapid and large-scale recycling of organic residue Road Environment Technology Co.Ltd(688156) .

Low carbon transformation of energy structure is a key measure to achieve carbon neutrality. Fengguang new energy operation welcomes development opportunities. It is suggested to pay attention to Huaneng Power International Inc(600011) , Huadian Power International Corporation Limited(600027) , China Resources Power, and new energy power generation. It is suggested to pay attention to Fujian Funeng Co.Ltd(600483) , China Three Gorges Renewables (Group) Co.Ltd(600905) , Longyuan power, Cecep Wind-Power Corporation(601016) , Jilin Electric Power Co.Ltd(000875) , Zhejiang Sunoren Solar Technology Co.Ltd(603105) . Meanwhile, the installed capacity of gas and electricity is expected to continue to increase in the future, and the demand for natural gas market will continue to improve. It is suggested to pay attention to Enn Natural Gas Co.Ltd(600803) with outstanding advantages in the integrated layout of the industrial chain and Top Resource Conservation & Environment Corp(300332) with the continuous growth of natural gas business brought about by the transformation and development of Shenan line. The operation of Shenan power line brings Top Resource Conservation & Environment Corp(300332) for the continuous growth of natural gas business. The Hangzhou Shenhao Technology Co.Ltd(300853) , Zhiyang Innovation Technology Co.Ltd(688191) , Suwen Electric Energy Technology Co.Ltd(300982) of intelligent operation inspection standards in the power industry. Industrial temperature control expert, promising target of energy storage and heat management Guangdong Shenling Environmental Systems Co.Ltd(301018) . The power shortage and the continuous widening of the price difference between peak and valley have promoted the demand for enterprise energy consumption control. It is suggested to pay attention to the enterprise microgrid integrated energy management solution supplier Acrel Co.Ltd(300286) .

Risk warning: the project progress is not as expected; Intensified market competition; The public data used in the research report may have the risk of information lag or untimely update.

Release date: January 23, 2022

Report author: Wang Lei, public principal of Zhongtai environmental protection s0740521070002