At today's Brokerage morning meeting, CITIC SEC believes that countermeasures against tariffs boost the prices of Shenzhen Agricultural Products Group, which directly benefits the planting chain; HAITONG SEC proposed a bullish view on the relative yields of the Banks Sector in April; Galaxy Securities stated that it focuses on Gold and countermeasures against rare earths.
On April 8th, Financial Associated Press reported that the market opened low and continued to decline throughout the day, with all three major indices falling collectively. The Chinext Price Index dropped by 12.5%, marking the largest single-day decline in history, while the Shanghai Composite Index fell below 3,100 points. Over 5,200 stocks in the All Market declined, with more than 2,900 stocks hitting the limit down. The total transaction amount in the Shanghai and Shenzhen markets was 1.59 trillion, increasing by 450.2 billion compared to the previous trading day. In terms of sectors, a few sectors like Agriculture rose, while sectors such as Battery, Consumer Electronics, Computer Equipment, and Zhipu AI had significant declines. As of yesterday's close, the Shanghai Composite Index fell by 7.34%, the Shenzhen Component Index fell by 9.66%, and the Chinext Price Index dropped by 12.5%.
At today's Brokerage morning meeting, CITIC SEC believes that countermeasures against tariffs boost the prices of Shenzhen Agricultural Products Group, which directly benefits the planting chain; HAITONG SEC proposed a bullish view on the relative yields of the Banks Sector in April; Galaxy Securities stated that it focuses on Gold and countermeasures against rare earths.
CITIC SEC: The counter-tariffs boost agricultural product prices, benefiting the planting chain directly.
CITIC SEC stated that under the counter-tariff measures, the Agricultural Planting Industry Chain is a scarce sector that will benefit directly. First, the current wave of tariffs highlights the extreme importance of food security. Self-controlled seed sources have become a top priority for ensuring national food security. The seed and grain planting sectors may receive strong policy support again. Second, agricultural product prices may rise, directly leading to expectations of performance growth for seed and planting companies; the Processing of Agricultural Products sector is also expected to present structural opportunities.
GF HAITONG SEC: Optimistic about the relative returns of the Banks sector in April.
GF HAITONG SEC indicated that during the tense period of China-US trade friction from 2017 to 2019, the Banks sector exhibited prominent risk-averse characteristics, which should apply this time as well. On the one hand, the impact of tariffs on banking operations is relatively indirect, as banks absorb the averages of social impacts and disperse uncertainties; on the other hand, with low valuations and high dividends, banks provide a margin of safety for investments. In the first quarter of 2025, the banking industry revenue growth will be under pressure, but the weak growth in Crediting, concentrated reflection of the interest margin year-on-year decline, and poor performance in non-interest income are all within expectations, with the bottom pricing being sufficient.
Galaxy Securities: Pay attention to Gold and countering rare earth elements.
Galaxy Securities stated that on April 3, the USA imposed equivalent tariffs, adding a 10% "minimum benchmark tariff" on trading partners and imposing additional tariffs on countries with significant trade deficits with the USA. The unexpected increase in tariffs by the USA, in the context of a recession, rising stagflation expectations, and a potential global trade war, has strategically enhanced the asset allocation in Gold. The global ICBCCS Gold ETF and central banks worldwide are accelerating their shareholding in Gold, which is expected to drive gold prices up further. Currently, the gold price has stabilized at $3000 per ounce, and it is very likely that the prices will continue to rise. If gold prices consistently maintain above $3000 per ounce in the future, the performance center for gold companies will be significantly elevated. A-share Golden Industrial Concept stocks, which are near the valuation bottom over the past decade, are likely to see value reassessment. Additionally, due to the substantial tariffs imposed by the USA on China, some rare metals in China, which have global competitive advantages, may be anticipated by the market to become countermeasures or negotiation weapons in the Sino-US trade war. For example, in China's countermeasures against the USA's tariffs announced on April 4, export controls were implemented on certain mid-heavy rare earths (such as Samarium, Gadolinium, Terbium, Dysprosium, Lutetium, Scandium, Yttrium, etc.), which will facilitate the rise in overseas rare earth prices and drive domestic prices up, as well as highlight that the appreciation of rare earth resources will enhance the valuation of rare earth assets, presenting opportunities for thematic investment.
