The Prev opened slightly lower on July 13, but rose higher as financial stocks rebounded, rising nearly 2 per cent above 3450 in the afternoon. Shenzhen Composite Index, gem refers to maintain a strong upward trend. As of the close, the Prev index was up 1.77 per cent at 3443.29, the Shenzhen Composite Index was up 3.5 per cent at 14149.14, and the gem index was up 3.99 at 2889.43. The total turnover of the two cities is 1.67 trillion. On the disk, the agricultural sector broke out, the water conservancy construction plate rose sharply, and the food and beverage and pharmaceutical sectors showed a strong trend. Specifically:
1. Agricultural plate
The agricultural sector broke out in intraday trading today, with the seed industry and pork stocks performing brightly. By the end of the day, Dakang Agriculture, New Wufeng, Hefeng Animal Husbandry, Dabei Nong, Su Ken Nong Fa, Jinjian Rice, Jin Xinnong, Tiankang Biology, Snow Banyan Biology, Beidahuang, etc., had risen by the daily limit of nearly 30 stocks.
On the news side, recently, there has been continuous heavy rainfall in many parts of the south, resulting in the re-spread of non-plague epidemic, resulting in a slowdown in the progress of pig rearing. In addition, last week, the General Administration of Customs found novel coronavirus in the Chinese and foreign packaging of frozen shrimp in three enterprises in Ecuador. At present, China has suspended the import of products from 23 overseas meat enterprises, including Tunes in Germany, Tyson in the United States, Agra in Brazil, and Tulip in the United Kingdom. It is expected that imports of pork and related substitutes will significantly decrease in the second half of the year, and the supply of meat will be tight.
Founder Securities believes that the core logic of this cycle lies in the reshaping of the industrial structure brought about by African classical swine fever. In the context of the normalization of non-plague epidemic, pig prices are expected to remain at a high level. Companies with a sound epidemic prevention system and strong cost control capabilities will continue to enjoy a high profit period and achieve rapid expansion. Since the second quarter, the head enterprises have begun to gradually increase their volume, and in the third quarter, the growth rate of the column volume will be more obvious. Focus on the recommendation of Muyuan shares, New Hope, recommend Wen's shares, Zhengbang Technology, Tiankang Biology, Tianbang shares and so on.
For the seed sector, Tianfeng Securities pointed out that the seed industry may usher in an inflection point in 2020; the national policy on genetically modified seeds is being liberalized, especially in the context of insect pests and food security concerns, the policy on genetically modified seeds is expected to accelerate, promote the technological upgrading of the entire industry; if the genetically modified seed policy hits the ground: on the one hand, it will greatly enhance the value of seeds; on the other hand, it will enhance industry barriers and accelerate industry concentration. Key recommendations: Longping Hi-Tech (rich in GM technology reserves and 25% stake in Hangzhou Ruifeng), Dabei Nong (China's leading GM breeding enterprise), followed by Tsuen Yin Hi-Tech (backed by Sinochem and Syngenta) and Denghai seed industry (the leader of corn seed industry).
2. Water conservancy construction
The water conservancy construction sector rose higher in intraday trading today. by the close, Guotong shares, Azure Dragon management industry, Qianjiang water conservancy, Xinjiang Tianye, Anhui Construction Engineering, three Gorges Water Conservancy, Longquan shares, and New Territories pump industry rose by the daily limit.
On the news side, Xi Jinping, general secretary of the CPC Central Committee, state president, and chairman of the Central military Commission, gave important instructions on further doing a good job in flood prevention and relief work. Xi Jinping pointed out: recently, the Yangtze River, Huaihe River and other basins, Dongting Lake, Poyang Lake, Taihu Lake and other lakes are at the over-warning water level, and serious floods have occurred in Chongqing, Jiangxi, Anhui, Hubei, Hunan, Jiangsu, Zhejiang, and other places, resulting in casualties and property losses, and the situation of flood control is very grim.
In addition, Premier Li Keqiang of the State Council presided over an executive meeting of the State Council on July 8 to further do a good job in flood control and disaster relief and promote the construction of major water conservancy projects. Centering on flood control and disaster reduction, optimal allocation of water resources, and protection and restoration of water ecology, the meeting studied the construction arrangements of 150 major water conservancy projects this year and its follow-up, calling for stepping up construction, promoting the expansion of effective investment, and strengthening the ability to prevent flood and drought disasters.
Guohai Securities pointed out that since the beginning of this year, the accumulated precipitation in the country has been significantly higher than that in the same period of the normal year, and most of the rainfall has been concentrated in the Yangtze River basin. The Ministry of Water Resources has upgraded the emergency response to water disaster prevention to level II, and the south has entered the main flood season in an all-round way. On the one hand, it is suggested that attention should be paid to the opportunities of hydropower generation brought about by the advance of flood season and too much water, on the other hand, the demand for flood control and flood discharge for the construction of water conservancy facilities is greatly increased. the investment demand for river dredging and dredging, drainage network encryption, sponge city and wetland construction, which is conducive to water conservation, urban waterlogging and improving drainage efficiency, is expected to increase after the flood season.
3. Food and beverage
Food and beverage sector rose sharply in intraday trading today, as of the close, Dongling International, miss you, Jindawei, Angel yeast, Laifen, Keming Noodle, Longda Meat, Guanghong Holdings, Chengde Lulu, Bao Lingbao and so on.
In this sector, open source securities said that it is expected that the reported results of most Volkswagen companies can be improved month-on-month. The logic behind is that the first quarter was disturbed by the epidemic, consumer demand decreased, and production resumption and logistics and distribution were affected. The opening of compensatory consumption in the second quarter, while replenishing inventory through channels, is likely to accelerate the revenue of Volkswagen enterprises, and leading enterprises in the dairy products, condiments, cereal and other industries are expected to benefit.
Bank of China Securities believes that in the context of the epidemic, the demand of food and beverage companies is relatively less affected, at the same time, there is more room for channel mobility, strong resilience in reporting performance, and clear logic for long-term growth, so it is easier to obtain capital preference. Food and beverage valuations are currently on the high side. Pay attention to the improved varieties in the second quarter in the short term, and stick to the good companies with outstanding competitive advantages for a long time. (1) pay attention to the varieties that have fully reflected the impact of the epidemic in the first quarter, and there are expected to be improved quarter-on-quarter, such as Yili shares, Zhongju Hi-tech, Jinhui Liquor, Yili, Tsing Tao Beer and Guyue Longshan. (2) ignore short-term fluctuations, hold excellent companies with clear trend and clear growth logic for a long time, and recommend Shanxi Fenjiu, Guizhou Moutai, Yili shares, Anjing Food and negotiation Food. At the same time, pay attention to the continuous reform of Guyue Longshan, Tsing Tao Beer, Guangzhou Restaurant.
4. Medicine plate
The pharmaceutical sector was active again in intraday trading today. as of the close, Zetong Pharmaceutical rose by the daily limit, Shenlian Biology and Haohaishengke rose by more than 11%. Kangzhi Pharmaceutical, Yu Heng Pharmaceutical, Huluwa, Brothers Science and Technology, Xintian Pharmaceutical, Hainan Marine Pharmaceutical, Jianmin Group and so on.
Tianfeng Securities pointed out that as of July 11, a total of 71 companies in the pharmaceutical and biological sector have issued performance notices with excellent overall performance. Some testing, protection, antiviral related enterprises, as well as some API enterprises benefit from the epidemic and other factors are expected to achieve high growth in semi-annual performance. In addition, the damage targets of some outbreaks are also expected to improve significantly in the second quarter. Investors are advised to look for the main line of reported performance and the related targets of high growth and significant improvement in the second quarter compared with the previous quarter. Under the epidemic, the industries driven by the epidemic are expected to achieve good performance: 1, the field of medical devices, especially those related to COVID-19 testing and protection; it is recommended to pay attention to Mindray Medical, Antu Biology, Mike Biology, Wanfu Biology, Haier Biology, Ogilvy Medical, Yuyue Medical and so on. 2. Innovative drug industry chain, under the background of COVID-19 epidemic situation, the orders of overseas customers are obvious, but the first quarterly report is affected by the domestic epidemic situation, but the impact is gradually eliminated, the future trend of domestic innovation industry is determined, and the innovative drug industry chain is expected to continue to benefit. The performance of the new drug industry chain plate in the second quarter is expected to be good. It is recommended to pay attention to Wuxi Apptec, Pharmaron Beijing Co., Ltd.*, Kailiying, Tigermed and so on. 3. Consumer track, especially vaccine, growth hormone and so on. The big consumption track was affected by the epidemic in the first quarter, but in the long run, due to its great development potential and relatively rigid demand, it is expected to achieve a good performance recovery in the second quarter. It is suggested to pay attention to the vaccine track: Watson Biology, Zhifei Biology, Kangtai Biology, etc.; the field of growth hormone pays attention to Changchun Hi-tech, Anke Biology and so on. 4. Driven by the epidemic situation, the demand for related products (antibiotics, antivirus, chronic disease) has increased significantly in the API race track. At the same time, under the background of globalization, the competitive advantage of China's API industry chain has been further reflected. At the same time, under the background of domestic collection, the right to speak has increased, and the demand has increased significantly. At present, it is disclosed in the second quarter that Pulo Pharmaceutical and Fuxiang Pharmaceutical have achieved good performance. It is suggested to pay attention to the high-quality companies in the industry, Huahai Pharmaceutical Co., Ltd., Pulo Pharmaceutical Co., Ltd., Fuxiang Pharmaceutical Co., Ltd. In addition, the follow-up pharmaceutical investment strategy will focus on the idea of new pharmaceutical infrastructure, focusing on the direction of cyclical benefits after the epidemic, while maintaining the long-term logic of pharmaceutical consumption to screen targets.