Core portfolio: Sany Heavy Industry, Hengli Hydraulics, Eddie Precision, Zhejiang Dingli, Chunfeng Power, Jiejia Weichuang, Pioneer Intelligence, Guomao, Zhongmi Holdings, Baichu Electronics, Huafeng Measurement and Control, and Huace Testing Key Portfolio : Huarui Precision, Maiwei, Zhichun Technology, Construction Machinery, Zoomlion, Jack, Jereh, Hongya CNC, Topstar, Meiya Optoelectronics, Kelai Electromechanical, follow Oukeyi, Zhenbang Intelligence this week’s view: The credit cycle is an important forward-looking indicator, and the automation boom is expected to continue beyond expectations. The automation sector mainly includes industrial control, industrial robots, injection molding machines, laser processing, cutting machine tools, etc., which have obvious resonances in stock price performance and industry cycles. We explore indicators to measure industry prosperity from the perspective of credit cycles, including: 1) M1 Growth rate; 2) corporate financing capacity. At the current time, M1-M2 is still in the expansion period. Due to its significant leading significance, we believe that this round of automated boom cycle is expected to continue beyond expectations. Previously, the high point was expected to appear in 2021Q2. The unexpected driving force may come from: 1) This round of credit expansion cycle has a substantial tilt for entities, especially the manufacturing industry, which drives strong demand for automated transformation in the manufacturing industry; 2) The new crown epidemic has promoted the acceleration of unmanned and automated processing methods; 3) The overseas economy has recovered effectively, and the logic of export substitution by Chinese manufacturing companies is irreversible.
Suggested attention: Estun, Baichu Electronics, Yizumi.
The screening of mainstream small and medium-sized market capitalization targets and the adjustment of core assets have nurtured a new round of opportunities. Recently, due to the rising of risk-free interest rates, the market style has begun to switch from DCF valuation to traditional PEG valuation, focusing on the matching degree of growth rate and valuation, and small and medium machinery companies have become more concerned. We believe that there may be differentiation in the follow-up of the general rise of small and medium tickets. In the end, there is a high probability that the funds will choose mainstream small and medium market capitalization companies with excellent quality. After screening according to certain dimensions, 26 companies were finally selected from 300+ machinery companies, mainly including: Anhui Heli and Hangcha Group for forklift trucks; Jack shares for sewing machines; Haozhi Electromechanical, Guosheng Zhike, and Huarui Precision for CNC machine tools. , Oukeyi; and the invisible champions in various subdivisions Lingxiao Pump Industry, Huarong Shares, Yindu Shares, Microlight Shares and so on.
Construction machinery: According to CME observations, the sales volume of excavators in March was approximately +45.7% year-on-year, which exceeded market expectations: in March 2021, the domestic market for the excavator industry was estimated to sell 67,000 units, a year-on-year increase of approximately 43.75%, and the export market was estimated to sell 5,000 units. , The year-on-year growth rate is about 78.7%. Sales in the domestic market grew at a higher year-on-year growth rate in March, but the growth rate was significantly lower than the previous two months, mainly due to the peak sales in March 2020 and the impact of the two sessions and the rainy season at the beginning of March. The opening rate in various provinces and cities was generally low. . According to forecasts, sales of excavators from January to March 2021 are 119,906 units, a year-on-year growth rate of 74.71%, of which 107,588 units in the domestic market, a year-on-year growth rate of 75.57%; and 12,318 units in the export market, a year-on-year growth rate of 67.5%.
Investment advice: Focus on leading α, continue to recommend Sany, Zoomlion, Hengli Hydraulics, and Eddie Precision.
New energy equipment: Estimated annual average new installed capacity of photovoltaic and wind power during the 14th Five-Year Plan period. According to the 14th Five-Year Plan, by 2030, China's non-fossil energy will account for about 25% of primary energy consumption, and the total installed capacity of wind power and solar power will reach more than 1.2 billion kilowatts. We have calculated the average annual new installed capacity of photovoltaic and wind power during the 14th Five-Year Plan period. The calculation results show that in 2025 when non-fossil energy accounts for 19%, 20%, and 21%, respectively, the annual average new installed capacity of photovoltaic and wind power will be added. The quantities are: 80GW/34GW, 98GW/45GW, 115GW/57GW.
Suggested attention: Lithium battery equipment continues to focus on recommending leading intelligence, benefiting from the target Hangke Technology, and paying attention to the leading technology.
Risk warning: HJT's cost reduction is less than expected, downstream investment is less than expected, industry competition is intensified, raw material prices fluctuate, etc.
