Key recommendations

Ministry of Water Resources: From 2020 to 2022, we will focus on promoting the construction of 150 major water conservancy projects

In June, the number of breeding sows on hand will be 27 months Year-on-year growth for the first time

Market Comments

Market Comments: The index has reached a new high, do not blindly chase the rise

Non-ferrous metal industry: Lithium salt prices have stopped falling, cobalt prices have Price rise

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Futures Information

Metal Energy: Gold 430.56, up 0.12 %; Copper 52750, up 0.74%; Rebar 3745, up 0.27%; Rubber 10640, up 0.28%; PVC index 6750, up 1.2%; Zheng Chun 1814, up 0.83%; Shanghai Aluminum 14730, up 0.55%; Shanghai Nickel 110000, up 2.06%; iron ore 837.5, up 2.32%; coke 1918, up 0.60%; coking coal 1203.5, down 0.12%; crude oil 308.3, down 0.13%;

Agricultural products: soybean oil 5826, up 0.38% ; Corn 2149, up 0.33%; Palm oil 5088, up 1.72%; Cotton 12120, down 0.08%; Zhengmai 2519, down 0.20%; Sugar 5228, down 0.19%; Apple 7779, down 2.87%;

(The above futures data come from Shanghai Futures Exchange, Dalian Commodity Exchange, Zhengzhou Commodity Exchange)

Key recommendations

1. Ministry of Water Resources: 2020- In 2022, the construction of 150 major water conservancy projects will be focused on Project construction mainly includes five categories: flood prevention and disaster reduction, optimal allocation of water resources, irrigation water conservation and water supply, water ecological protection and restoration, and smart water conservancy, with a total investment of 1.29 trillion yuan.

Ye Jianchun emphasized that major water conservancy projects are important infrastructure for ensuring national water security, and are also an important area for making up for shortcomings in national infrastructure. "Judging from this year's flood control practice, (major water conservancy projects) have played an important supporting role in water security."

Ye Jianchun said that in the next step, the Ministry of Water Resources will work with relevant departments and localities to take strong and effective measures , to accelerate the construction of major water conservancy projects.

Comment: With the improvement of flood control emergency response level, the water conservancy infrastructure sector showed a fully active trend on Monday, with many stocks reaching their daily limit. News that the construction of major water conservancy projects is expected to be accelerated will still stimulate further activity in the water conservancy infrastructure sector. It is recommended to hold shares in the short term, and be cautious when pursuing large positions.

(Investment consultant? Cai Jin? Registered investment consultant certificate number: S0260611090020)

2. In June, the number of breeding sows increased year-on-year for the first time in 27 months

According to the Ministry of Agriculture and Rural Affairs, the relevant person in charge of the Animal Husbandry and Veterinary Bureau of the Ministry of Agriculture and Rural Affairs said that since October last year, the number of reproductive sows has increased month-on-month for nine consecutive months, an increase of 28.6% compared with September last year. Among them, the most prominent sign is that the number of reproductive sows began to increase year-on-year in June. The number of breeding sows in June increased by 3.6% year-on-year. This is the first year-on-year growth since April 2018 and is an important turning point. Overall, the recovery rate of production capacity is better than expected. The rise in pork market prices since June is consumption-driven.

Comment: With the rapid recovery of pig production capacity, the number of reproductive sows has reached an important turning point. It is expected that the profits of pig feed, animal vaccines and other industries in the pig breeding industry chain will also enter a period of growth. Related stocks The market outlook is expected to achieve good performance.

(Investment Consultant? Cai Jin? Registered Investment Consultant Certificate No.: S0260611090020)

Market Comments

1. Market Comments: The index has reached a new high, do not be blind Chasing the gains

The market indexes in the two cities oscillated higher on Monday, and the trading volume was slightly larger than last Friday. The total turnover in the two cities was 1,672.4 billion yuan. Specifically, the Shanghai Stock Exchange Index rose 1.77% to close at 3443.29 points; the Shenzhen Component Index rose 3.5% to close at 14149.1 points; the ChiNext Index rose 3.99% to close at 2889.43 points.

On the market, agricultural stocks, non-ferrous metal stocks, chip semiconductor concept stocks and lithium battery concept stocks collectively rose sharply, while financial stocks and tax-free concept stocks went out of differentiation. Judging from the trend, the Shenzhen Component Index and the ChiNext Index accelerated their rise, and the Shanghai Composite Index also hit a new high in this round of market conditions. It is expected that the market outlook is more likely to oscillate higher.

In terms of operation, although the index has reached a new high, individual stocks have fluctuated violently during the day. It is not recommended to continue to chase high-level popular stocks with large cumulative gains. It is recommended to pay attention to stocks with promising performance expected in the interim report, as well as food and beverage, Investment opportunities for high-quality varieties in the consumer electronics and new energy industry chain and chip semiconductor sector.

(Investment consultant? Yang Dong? Registered investment consultant certificate number: S0260615080007)

2. Non-ferrous metal industry: lithium salt prices have stopped falling, and cobalt prices have risen

In terms of lithium, the price of domestically produced 56.5% lithium hydroxide this week was 50,000 yuan/ton, which was the same as the previous month. The price of domestically produced 99.5% battery-grade lithium carbonate was 40,000 yuan/ton, which was the same as the previous month. In terms of cobalt, the price of cobalt No. 1 this week was 247,000 yuan/ton, a significant increase of 1.65% month-on-month. On the supply side, in terms of cobalt, this week's news of confirmed cases in mining areas in the Democratic Republic of the Congo may provide support for short-term cobalt prices. In terms of lithium, as the price of lithium carbonate has been falling, upstream mines have frequently reduced supply through production cuts and maintenance. We believe that the current price of lithium carbonate may be close to the cash cost of upstream mines, and the price of lithium carbonate is expected to stop falling. On the demand side, my country's monthly production of new energy vehicles was 102,000 units and sales were 104,000 units in June 2020, a significant month-on-month increase of 21.3% and 27.3% respectively. In June, the number of new energy vehicle registrations in Germany, France, the United Kingdom, Norway, Portugal, Sweden, and Italy in June 2020 was 73,000, a year-on-year increase of 103% and a month-on-month increase of 106%. Europe plans to introduce a series of policies to stimulate the development of new energy vehicles. At the same time, the demand for new energy vehicles suppressed by the epidemic is expected to stabilize and rebound.

Comment: The mid- to long-term growth trend of upstream resources will not change, and we will focus on the resumption of work in the upstream and downstream of the industrial chain and the dynamics of overseas resource exports. It is recommended to pay attention to the lithium and cobalt magnetic material standards in the upstream of lithium batteries.

(Investment consultant Yang Dong? Registered investment consultant certificate number: S0260615080007)