Summary of this issue

Key recommendations

Shanghai Stock Exchange: Deepening key institutional reforms such as registration system, delisting, and long-term investors

10 my country's power battery output in August totaled 9.86GWh, a year-on-year increase of 47.9%

Market Comments

Market Comments: The market is in shock. In terms of operation, do not chase the rise and kill the fall. It is better to control the rhythm and strengthen Band participation

Macro perspective: October financial data is released, M2 growth rate is 0.4 percentage points lower than the end of last month

Chemical industry: The economy is recovering moderately, stick to targets with moats

Futures Information

Metal energy: gold 397.44, down 0.08%; copper 51870, up 0.14%; rebar 3760, down 0.29%; rubber 14520, up 3.31%; PVC index 6985, up 0.07%; Zheng Chun 2187 rose 0.74%; Shanghai Aluminum 15170, rose 1.85%; Shanghai Nickel 118940, rose 0.47%; Iron ore 814.5, rose 0.18%; Coke 2360.0, fell 1.28%; Coking coal 1361.5, rose 2.79%; Bren Special oil, %;

Agricultural products: soybean oil 7390, down 0.14%; corn 2573, up 0.82%; palm oil 6520, up 0.62%; Zheng cotton 14295, down 0.14%; Zheng wheat 2693, down. 0.11%; white sugar 5142, up 0.29%; apple 7323, up 1.38%; red dates 9950, down 0.15%;

Exchange rate: EUR/USD 1.18, up 0.23%; USD/RMB 6.61, down 0.29% ; USD/HKD 7.75, down 0.01%.

II. Key recommendations

1. Shanghai Stock Exchange: Deepen the reform of key systems such as the registration system, delisting, and long-term investors

Event: The Shanghai Stock Exchange stated that it will strengthen reforms System integration to effectively implement various tasks of comprehensively deepening the reform of the capital market. Focusing on the outline of the country’s “14th Five-Year Plan” and the long-term goals for 2035, we will further clarify the roadmap for building a world-leading exchange, unswervingly promote the construction of the basic system of the capital market, deepen the registration system, delisting, long-term Reform of key systems such as investors, actively implement the "Three-Year Action Plan to Improve the Quality of Shanghai-listed Companies", enhance the strength of high-end elements, and actively create a standardized, transparent, open, dynamic and resilient capital market.

Comment: With the advancement of the registration system and the continuous improvement of the delisting system, the capital market will further form a normal state of "in and out". In the future, the structural differentiation of the market will further intensify. Focus on fundamentals. Investment will become increasingly important.

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

2. In October, my country’s power battery production totaled 9.86GWh, a year-on-year increase of 47.9%

Event: The latest new energy vehicle battery production, sales and vehicle installation data released by the China Automotive Power Battery Industry Innovation Alliance in October 2020 show that my country’s power battery production in October totaled 9.86GWh, a year-on-year increase of 47.9%, and a month-on-month increase of 47.9%. An increase of 14.5%. Among them, the output of ternary batteries was 5.5GWh, accounting for 56% of the total output, a year-on-year increase of 39.6%, and a month-on-month increase of 16.1%; the output of lithium iron phosphate batteries was 4.3GWh, accounting for 43.8% of the total output, a year-on-year increase of 63%, and a month-on-month increase of 12.6%.

Comment: As domestic new energy vehicle production and sales have recovered significantly, power battery production has also experienced high year-on-year growth. In the medium and long term, the country will vigorously promote the improvement of new energy vehicle infrastructure and introduce relevant supporting policies. The production and sales of new energy vehicles will continue to increase. This will drive the power battery industry to maintain rapid growth in the medium and long term, and the leader will continue to benefit.

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

3. Market Comments

Market Comments: The market is volatile, and in operation, do not chase the rise and kill the fall. , it is advisable to control the rhythm and strengthen band participation

Major indexes were mixed on Thursday. The Shanghai Composite Index opened higher and moved lower, and mainly maintained a volatile consolidation throughout the day. On the market, beverage manufacturing, aquaculture, tourist attractions, port shipping, etc. were the top gainers, while park development, banking, plantation, etc. were the top losers. As of the close, the Shanghai Composite Index closed at 3338.68 points, down 3.52 points, or 0.11%. The turnover was 286.9 billion. The Shenzhen Component Index closed at 13,792.07 points, up 71.90 points, or 0.52%, with a turnover of 421.2 billion. The total transaction volume of the two cities was 708.1 billion. The GEM index closed at 2,700.51 points, up 18.99 points, or 0.71%, with a turnover of 184.4 billion. The total inflow of northbound funds on that day was 1.393 billion yuan. Sectors continue to show differentiation, and the market has a strong wait-and-see sentiment. It is expected that the market will still be volatile in the short term. In terms of operation, it is better not to chase the rise and kill the fall, but to control the rhythm and participate.

The stock selection ideas focus on the following three aspects. First, standard allocation of cyclical stocks with low valuations; second, tracking industries with relatively good prosperity, such as new energy and new energy automobile industry chains; third, related factors in domestic consumption. Variety, home appliances and automobiles, etc. 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: Financial data released in October M2 growth rate was 0.4 percentage points lower than the end of the previous month

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Event: Data show that at the end of October, the balance of broad money (M2) was 214.97 trillion yuan, a year-on-year increase of 10.5%. The growth rate was 0.4 percentage points lower than the end of last month and 2.1 percentage points higher than the same period last year; narrow money (M1) balance was 60.92 trillion yuan, a year-on-year increase of 9.1%, and the growth rate was 1 percentage point and 5.8 percentage points higher than the end of last month and the same period last year respectively.

Comment: Data show that at the end of October, the balance of broad money (M2) was 214.97 trillion yuan, a year-on-year increase of 10.5%, and the growth rate was 0.4 percentage points lower than the end of last month. Overall, new credit showed a seasonal decline in October, but continued to expand year-on-year. Analysts believe that currently, monetary policy has returned to normalization, and monetary policy is expected to continue to remain prudent during the year. In terms of liquidity policy, it is expected that liquidity will continue to be maintained at a reasonable and sufficient level. Judging from the analysis of the news, it is neutral to slightly positive.

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

Chemical industry: The economy is recovering moderately, stick to targets with moats

The impact of the epidemic on the chemical industry The severe test of the epidemic will slow down the development speed of small businesses and foreign companies, accelerate the increase in the market share of China's leading companies, and the impact of the epidemic will have a medium- and long-term impact on the industry's competition pattern. Under the circumstances that the overall valuation is not expensive, persist in continuing Companies that create value for shareholders and have deep moats are selected, and leading companies with clear growth paths and low dynamic valuations in the next three years are selected.

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