Weekly performance of the sector: this week (2022 / 1 / 17-2021 / 1 / 21), the machinery sector fell by 2.5%. The top five sectors of fluctuation range are: Metallurgical and chemical equipment / abrasive tools / oil and gas equipment / lithium electric equipment / construction machinery, with fluctuations of 3.3% / 0.0% / – 0.3% / – 0.5% / – 0.8% respectively;
Sector valuation level: the median pettm of the machinery sector is 36x, of which the highest valuation is lithium battery equipment (109.0x) and the lowest valuation is construction machinery (16.1x). From the historical data within 10 years, the P / E ratio of the machinery sector is in the quantile of 26.61%;
Weekly tracking of individual stocks: the five stocks with the highest increase this week are Changsha Dialine New Material Sci.&Tech.Co.Ltd(300700) , Dalian Haosen Equipment Manufacturing Co.Ltd(688529) , Meter Instruments Co.Ltd(301006) , Zhejiang Supcon Technology Co.Ltd(688777) and Weibo hydraulic;
Industry highlights: CPI rose moderately in 2021, while PPI rose at a high level and fell back; In 2021, China’s total population will maintain growth and the level of urbanization will increase steadily; In the fourth quarter of 2021, the national industrial capacity utilization rate was 77.4%, and the annual industrial capacity utilization rate was 77.5%, an increase of 3PCT over the previous year; Contemporary Amperex Technology Co.Limited(300750) enter the power exchange, or become a core participant in the whole power exchange industry.
The mechanical sector after previous interest rate cuts. On December 20, 2021 and January 20, 2022, the central bank cut interest rates twice, and the one-year LPR was reduced by 5bp and 10bp respectively. From the perspective of LPR, China has experienced seven rounds of interest rate cuts from 2000 to 2021. The starting time points of each interest rate reduction period are: 1) February 2002; 2) September 2008; 3) June 2012; 4) November 2014; 5) August 2019; 6) February 2020; 7) December 2021. Taking Shenwan machinery and equipment index as the observation object, we investigated its rise and fall performance in different time periods after the beginning of each round of interest rate cut. We found that: 1) in the short term after the interest rate cut, the rise and fall of machinery and equipment sector did not show regularity; 2) In the year after the interest rate cut, except for 2002 and 2012, the remaining four increases exceeded 30% and performed well.
Large cap companies may perform better after the interest rate cut. (1) From the performance of the sector: Taking the mechanical equipment companies with the top 10% of the total market value of the industry at the time of previous interest rate cuts as the research object, we found that within the same year after the interest rate cuts, except 2012, the range of large market value companies rose or fell by more than 55% (weighted average according to the circulating market value), and there was a significant excess return relative to the mechanical equipment industry. Among them, the excess return in 2020 is the most obvious, which also shows that the market’s preference for industry leaders is increasing. (2) From the perspective of income: at the same time, we found that the average income of the machinery industry began to bottom up after 6-9 months of interest rate reduction, and in the upward cycle of revenue growth, the arithmetic average growth rate of large market value companies often far exceeded that of small market value companies. We believe that the main reason is the time lag effect of monetary policy and the competitive advantage of leading enterprises. Leading enterprises have stronger management ability, capital utilization ability and credit endorsement. While increasing market share, they increase R & D investment and repair profitability. It is suggested to continue to pay attention to the high-quality leaders of each subdivision track.
It is recommended to pay attention to:
(1) construction machinery: Sany Heavy Industry Co.Ltd(600031) (600031, not rated), Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) (000157, bought), Jiangsu Hengli Hydraulic Co.Ltd(601100) (601100, not rated), Shaanxi Construction Machinery Co.Ltd(600984) (600984, not rated), Yantai Eddie Precision Machinery Co.Ltd(603638) (603638, not rated); (2) Industrial equipment: Hangcha Group Co.Ltd(603298) (603298, Unrated), Anhui Heli Co.Ltd(600761) (600761, Unrated), Qinchuan Machine Tool & Tool Group Share Co.Ltd(000837) (000837, Unrated), Guangdong Yizumi Precision Machinery Co.Ltd(300415) (300415, Unrated), Estun Automation Co.Ltd(002747) (002747, Unrated), Guangdong Topstar Technology Co.Ltd(300607) (300607, Unrated); (3) Logistics automation: Nanjing Inform Storage Equipment (Group) Co.Ltd(603066) (603066, not rated), Noblelift Intelligent Equipment Co.Ltd(603611) (603611, not rated), Cimc Vehicles (Group) Co.Ltd(301039) (301039, not rated); (4) Energy equipment: Wuxi Lead Intelligent Equipment Co.Ltd(300450) (300450, not rated), Shenzhen S.C New Energy Technology Corporation(300724) (300724, not rated), Yantai Jereh Oilfield Services Group Co.Ltd(002353) (002353, not rated), Zhengzhou Coal Mining Machinery Group Co.Ltd(601717) (601717, not rated), Tiandi Science & Technology Co.Ltd(600582) (600582, not rated); (5) Rail transit equipment: Crrc Corporation Limited(601766) (601766, not rated), Guangdong Huatie Tongda High-Speed Railway Equipment Corporation(000976) (000976, not rated); (6) Service & Consumption: Shenzhen Anche Technologies Co.Ltd(300572) (300572, Unrated), Centre Testing International Group Co.Ltd(300012) (300012, Unrated), Jack Sewing Machine Co.Ltd(603337) (603337, Unrated), Zhejiang Jiecang Linear Motion Technology Co.Ltd(603583) (603583, Unrated), Changzhou Kaidi Electrical Inc(605288) (605288, Unrated), Hangzhou Youngsun Intelligent Equipment Co.Ltd(603901) (603901, Unrated).
Risk tips
The development of the epidemic is less than expected, the macro economy is less than expected, infrastructure investment is less than expected, raw material prices rise, and Global trade conflicts intensify.
