Summary of this issue

Key recommendations

Li Keqiang: Economic growth is not unimportant, development is the key and foundation for solving all problems in China

Excavator sales continue to rebound, and the industry leader is worth looking forward to

Market Comments

Market Comments: The market is mainly driven by fluctuations, so frequent operations should not be carried out, and stock selection should focus on performance fundamentals

Macroscopic perspective: 11 financial reform measures will be implemented in the near future, focusing on the two main allocation lines

Environmental protection utilities: sewage outlet inspections have begun, focusing on long-term investment opportunities in Yellow River management

Futures information

Metal energy: gold 394.00, up 0.49%; copper 43700, down 0.32%; rebar 3459, up 0.29%; rubber 10525, flat; PVC index 6005, down 0.74%; Zheng Chun 1723 , up 0.82%; Shanghai Aluminum 13040, up 1.40%; Shanghai Nickel 100680, up 0.13%; Iron Ore 701.0, up 1.96%; Coke 1852.0, down 0.30%; Coking Coal 1156.5, up 0.26%; Brent Oil 37.69, up 3.01%; Zhengyou 6969, up 3.23%; rubber sheet 213.90, up 9.16%;

Agricultural products: soybean oil 5560, up 0.65%; corn 2072, up 0.78%; palm oil 4746, up 1.89%; Zheng cotton 11645, down 0.72%; Zheng wheat 2497, up 0.48%; white sugar 4989, up 0.10%; apple 8736, down 1.61%; red dates 10145, down 0.64%; rapeseed 4682, up 3.77%;

2. Key recommendations

1. Li Keqiang: Economic growth is not unimportant, development is the key and foundation for solving all problems in China

Event: Premier Li Keqiang of the State Council When attending a press conference on the afternoon of May 28, he said that China’s economy has been deeply integrated into the world economy and it is impossible to stay outside. Therefore, we have not determined a quantitative indicator for GDP growth this year, which is also pragmatic. However, we have determined the goals and tasks of the "six guarantees" such as ensuring residents' employment, basic livelihood, and market entities, which are directly related to GDP economic growth. Economic growth is not unimportant. What we do is actually to allow the people to have a more direct experience of economic growth and to make economic growth have a higher quality. Development is still the key and foundation to solve all problems in China.

Comment: Affected by the epidemic, global economic growth has declined significantly, and it is expected that there is a high probability of negative growth throughout the year, which will also bring certain challenges to China's economic growth this year. However, with the introduction of a series of hedging policies and the first full resumption of work and production, China's economy has obvious comparative advantages over other major economies. The current valuation of major stock indexes is still at a relatively low level, coupled with loose liquidity and stable fundamentals, it is expected that the market will have a higher probability of maintaining structural performance.

(Investment consultant Zhong Yanling’s registered investment consultant certificate number: S0260613020024)

2. Excavator sales continue to rebound, and the industry leader is worth looking forward to

Event: According to China Engineering According to statistics from the Machinery Industry Association, in April 2020, the 25 excavator manufacturing companies included in the association's statistics sold 45,400 excavators of various types, a year-on-year increase of 59.9%. This is also the first time after 13 months that the year-on-year growth rate of excavator sales has returned to above 50%. Previously, data from the China Construction Machinery Association showed that total excavator sales in March were 49,400 units, a year-on-year increase of 11.59%, setting a monthly record high.

Comment: In response to the economic downward pressure brought by the epidemic, infrastructure investment may increase this year. Countercyclical infrastructure investment is expected to drive upward construction machinery sales, and construction machinery leaders are expected to continue to benefit. The current valuations of major leading companies are not high, and there is room for further improvement in the future.

(Investment Consultant Zhong Yanling’s registered investment consultant certificate number: S0260613020024)

3. Market Comments

Market Comments: The market is mainly volatile and it is not suitable to operate frequently. , stock selection focuses on performance fundamentals

The three major A-share indexes had mixed gains and losses on Thursday, and stock index fluctuations intensified throughout the day. As of the close, the Shanghai Stock Index rose slightly by 0.33% to close at 2846.22 points; The index fell 0.27% to close at 10653.49 points; the GEM index fell 0.80% to close at 2054.96 points. The total turnover in the two cities was 578.3 billion yuan, and the sectors were still clearly differentiated. Affected by the news of 11 financial reform measures released by the Financial Commission, financial stocks such as diversified finance, banks, insurance, and securities companies performed actively. Relatively speaking, the performance of popular stocks with small market capitalization in the early stage has cooled down, and corrections have generally occurred. The net inflow of northbound funds throughout the day was 4.192 billion yuan.

If there is no more substantial positive news, it is expected that the market will continue to fluctuate in the short term. In terms of operation, it is recommended to pay attention to the rhythm of participation, and it is not suitable to operate frequently. The stock selection should focus on the good varieties with certain performance fundamentals. In addition, you can also actively focus on the stock selection. The targets for foreign capital holdings increase are carefully screened and laid out. There are risks in the stock market, so investment needs to be cautious.

(Investment consultant? Gu Zhixiong? Registered investment consultant certificate number: S02606611020066)

Macro perspective: 11 financial reform measures will be implemented in the near future, focusing on the two main lines of allocation

Event: On the news, the Office of the Financial Stability and Development Commission of the State Council announced on the 27th that according to the unified deployment of the Financial Commission of the State Council, members of the National Development and Reform Commission, the Ministry of Finance, the People's Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange and other financial commissions Based on in-depth research, the unit will launch 11 financial reform measures in the near future in accordance with the principle of "launching one after each maturity".

Comment: The 11 financial reforms will enhance the ability of financial support entities, especially the support for small, medium and micro enterprises, and will also help restore the economy and stabilize employment. The industry boom is running at a low level, and extremely low valuations indicate that the downside space for the sector is extremely limited. There are two main lines of allocation that can be focused on individual stocks: 1) Alpha logic, that is, banks with unique business models can actively allocate after the recent correction; 2) Beta logic, That is, low-valuation and highly elastic varieties that benefit from the restoration of industry risk expectations can also be focused on.

(Investment consultant? Gu Zhixiong? Registered investment consultant certificate number: S02606611020066)

Environmental protection utilities: sewage outlet inspection begins, pay attention to long-term investment opportunities in Yellow River management

The Yellow River Basin has more than 30% of the country’s permanent population, but the water quality in the basin and the sewage and solid waste treatment rate in some areas are lower than the national average, and there is still room for improvement in pollution control facilities. With reference to the great protection of the Yangtze River and the battle for governance of the Bohai Sea, the governance of the Yellow River Basin is expected to enter an accelerated stage of policy release. It is recommended to pay attention to the long-term investment opportunities of ecological governance in the Yellow River Basin, and pay attention to the governance pattern in the basin and the catalytic effect of large governance orders on investment.

(Investment consultant Gu Zhixiong registered investment consultant certificate number: S02606611020066)