Core view
This week, the size and market value of A-Shares differentiated significantly. The Shanghai stock index and CSI 300 closed slightly red, the gem composite and CSI 1000 closed green, and the ranking performance of the machinery industry was poor. We believe that in the first quarter of 2022, the pressure on China’s economy to maintain growth continued to increase, and the performance of export-oriented manufacturing industry was better than expected, but the boom fell month on month. From the perspective of fundamentals, in 2022, we need to pay close attention to digitization and intelligence, double carbon goal and greening, internal circulation construction and supply chain reconstruction, which are three clear major trends at present and in the future. We focus on China’s new infrastructure of digital economy and advanced manufacturing special equipment such as new energy and semiconductors The performance recovery exceeded expectations and the targets related to the localization of alternative basic parts continued to be strengthened in the 14th five year plan.
This week is the third week of January 2022. Coal, computer, banking, food and beverage, architectural decoration and other sectors performed best, while medicine and biology, national defense and military industry and basic chemical industry performed worst. Among the concept sectors, big data, financial technology, operating system, coal mining and other sectors performed best, mainly stimulated by the government’s digital economy news; In vitro diagnosis, medical devices, prefabricated vegetables and photoresist and other sectors performed the worst, which may be mainly due to the excessive rise and fall in the early stage.
The real estate industry chain, which was better performing last week, was still good, with the financial and non banking sectors showing Baijiu, and the liquor sector rebounded. Related to the recent hyperinflation of the epidemic, in vitro testing, vaccines and prefabricated vegetables made up for the decline, while the new energy, military industry and semiconductor sectors, which have continued to decline recently, fell sharply again; The market still shows the trend of rapid rotation of rise and fall, killing fall over rise and making up rise over fall, which is expected to continue.
Short term capital behavior does not change the medium-term trend. Investors should choose appropriate strategies and investment cycles according to the nature of funds. January is still a relatively empty window period, and the news was originally relatively flat, but various industrial policies and news have become the largest variable in the market. China’s green development concept and strategy are determined, followed by the implementation of the dual carbon strategy in all parts of the industrial and energy system. Dual carbon is still the focus of the capital market, and the relevant benefit tracks will still be the focus of capital allocation. Commodity prices have stabilized, liquidity is expected to improve, market risk appetite is good, and market activity continues.
We believe that the downside systemic risk of the market next week is still limited, but the sustainability of the main line of recent market hot spots remains to be observed. If the sector rotation is too fast, we should control the position to defend and counterattack. The fundamental principle is that the old hot spots do not catch up, the new hot spots participate as soon as possible, and the band thinking operation. For fundamental investment, we still suggest that those specialized special new sub industries with 20-year performance exceeding expectations and 21-year industry prosperity should be preferred for allocation over the medium term. Focus on allocating oversold stocks with good fundamentals, and pay attention to sectors with strong certainty and reasonable valuation. In the medium term, we will still focus on the growth technology manufacturing enterprises matching the growth and valuation and the new high-quality track sector under the dual carbon background. We will continue to optimize the investment logic related to the import substitution logic of relevant advanced manufacturing sectors such as aerospace military industry sector (civil military participation, missile), new energy (wind power, energy storage, hydrogen energy and nuclear energy) supported by performance or growth expectations, At the same time, we will continue to moderately hold the targets of the science and technology sector (third-generation semiconductor, big data, automotive intelligence, miniled and VR) at the inflection point of prosperity.
Relevant targets include: Guoanda Co.Ltd(300902) , Jade Bird Fire Co.Ltd(002960) , Zhejiang Fenglong Electric Co.Ltd(002931) , Chengdu Shenleng Liquefaction Plant Co.Ltd(300540) , Sichuan Crun Co.Ltd(002272) , Chengdu Leejun Industrial Co.Ltd(002651) , Kunshan Kinglai Hygienic Materials Co.Ltd(300260) , Tongyu Heavy Industy Co.Ltd(300185) , Shanghai Hugong Electric Group Co.Ltd(603131) , Sinoseal Holding Co.Ltd(300470) , Dongfang Electric Corporation Limited(600875) , Lanzhou Ls Heavy Equipment Co.Ltd(603169) , Houpu Clean Energy Co.Ltd(300471) , Anhui Yingliu Electromechanical Co.Ltd(603308) , Zhonghang Electronic Measuring Instruments Co.Ltd(300114) , China Oilfield Services Limited(601808) , Jiangsu Hengli Hydraulic Co.Ltd(601100) , Wus Printed Circuit (Kunshan) Co.Ltd(002463) , Shenzhen Fastprint Circuit Tech Co.Ltd(002436) , Suzhou Chunqiu Electronic Technology Co.Ltd(603890) , Shanghai Baolong Automotive Corporation(603197) , etc.
Market performance
This week, the Shanghai stock index rose 0.04%, the Shanghai and Shenzhen 300 rose 1.11%, the gem composite fell 3.09%, and the China Securities 1000 fell 3.73%. The wind tertiary industry index machinery industry fell 3.30%, ranking 48 / 62 in the industry growth week, outperforming the Shanghai Composite Index by 3.34 percentage points.
In the machinery industry of the wind tertiary industry index, the top five stocks with weekly gains were Changsha Dialine New Material Sci.&Tech.Co.Ltd(300700) , Dalian Haosen Equipment Manufacturing Co.Ltd(688529) , Shanghai Guao Electronic Technology Co.Ltd(300551) , tier laser and Jack Sewing Machine Co.Ltd(603337) , with gains of + 37.34%, + 17.63%, + 15.25%, + 10.14% and + 9.56%. The top five stocks with declines were Jiangsu Skyray Instrument Co.Ltd(300165) , Hunan Yujing Machinery Co.Ltd(002943) , Zhejiang Canaan Technology Limited(300412) , Maider Medical Industry Equipment Co.Ltd(688310) and Zhejiang Chunhui Intelligent Control Co.Ltd(300943) , with declines of – 28.79%, – 28.63%, – 28.20%, – 28.04% and – 20.98% respectively.
The market index fluctuated slightly this week, and the performance of the machinery sector was poor. The top four companies rose by more than 10%, and the top ten companies fell by more than 10%. Individual stocks in the industry rose less and fell more as a whole.
Industry dynamics
\u3000\u30001. Ministry of industry and information technology and other three departments: by 2025, the output value of environmental protection equipment manufacturing industry will strive to reach 1.3 trillion yuan (Financial Associated Press)
\u3000\u30002. The total investment of 3 trillion yuan in the power industry is gradually implemented, and the construction of UHV is the top priority (high-tech lithium battery)
Risk tips
The promotion and implementation of industrial policies are lower than expected, the change of market style has brought down the valuation center of the machinery industry, the pressure on profitability caused by rising costs, and the systemic risk caused by the spread of epidemic abroad.
