Summary of this issue

Key recommendations

Statistics Bureau: CPI increased by 1.7% year-on-year in September, and PPI decreased by 2.1% year-on-year

9 Monthly excavator sales increased by more than 60% year-on-year

Market Comments

Market Comments: The market has returned to range fluctuations, and it is advisable to flexibly control positions and strengthen band participation

Macro perspective: Central Bank: Inclusive small and micro loans are growing rapidly, and loan interest rates continue to fall

Construction machinery: New and old infrastructure efforts have extended the construction machinery boom, and industry valuations are expected to increase

Futures Information

Metal energy: gold 404.82, up 0.15%; copper 51290, down 0.10%; rebar 3578, down 0.61%; rubber 13325, up 0.04%; PVC index 6835, down 0.22%; Zheng Chun 2057, up 0.69%; Shanghai Aluminum 14485, up 0.10%; Shanghai Nickel 117830, up 1.05%; Iron Ore 777.5, down 2.26%; Coke 2076.0, down 0.24%; Coking Coal 1339.5, flat; Brent Oil 43.82, fell 0.90%;

Agricultural products: soybean oil 7018, down 0.68%; corn 2553, down 1.16%; palm oil 6090, down 1.39%; Zheng cotton 14370, up 1.38%; Zheng wheat 2688, down 0.26% ; White sugar 5272, up 0.21%; Apple 8234, up 1.17%; Red dates 10075, down 0.54%;

Exchange rate: EUR/USD 1.17, down 0.35%; USD/RMB 6.72, up 0.14%; USD /HKD 7.75, flat.

2. Key recommendations

1. Bureau of Statistics: CPI increased by 1.7% year-on-year in September, and PPI decreased by 2.1% year-on-year

Event: In September 2020, The national consumer price rose by 1.7% year-on-year. Among them, urban prices increased by 1.6% and rural areas increased by 2.1%; food prices increased by 7.9% and non-food prices remained unchanged; consumer goods prices increased by 2.6% and service prices increased by 0.2%. From January to September, the national consumer price increased by 3.3% compared with the same period last year. In September 2020, the national industrial producer price dropped by 2.1% year-on-year and increased by 0.1% month-on-month; the industrial producer purchasing price decreased by 2.3% year-on-year and increased by 0.4% month-on-month. On average from January to September, the ex-factory price of industrial producers fell by 2.0% compared with the same period last year, and the purchasing price of industrial producers fell by 2.6%.

Comment: CPI continues its previous downward trend. Against the background of the relative decline in pork prices and the high base of food prices last year, it is expected that the probability of subsequent low levels of CPI will be greater and inflationary pressure will be smaller. In terms of PPI, under the premise that the supply contraction is unsustainable and there is no stronger-than-expected policy stimulus on the demand side, PPI will continue the trend of low slope recovery. The current CPI and PPI performance are generally in line with expectations and are not expected to pose constraints on monetary policy.

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

2. Excavator sales increased by more than 60% year-on-year in September

Event: October 15 On the same day, industry statistics disclosed by the China Construction Machinery Industry Association showed that among the 25 mainframe manufacturing companies included in the statistics, a total of 26,034 units of various excavating machinery products were sold in September this year, a year-on-year increase of 64.8%. Among them, 22,598 units were sold in the domestic market, a year-on-year increase of 71.4%. Export sales were 3,436 units, a year-on-year increase of 31.3%. From January to September this year, a total of 236,508 units of various excavating machinery products were sold, a year-on-year increase of 32.0%. Among them, 212,820 units were sold in the domestic market, a year-on-year increase of 33.2%. Export sales were 23,688 units, a year-on-year increase of 22.2%.

Comment: Excavator sales increased more than expected in September. With the continued recovery of real estate and infrastructure investment and the demand for manual replacement, environmental protection and replacement, the high prosperity of excavators is expected to continue. At the same time, as the brand effects of leading companies further emerge, industry concentration will accelerate, with leading companies benefiting the most.

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

3. Market Comments

Market Comments: The market has returned to range fluctuations, and operations should be flexible Control positions and strengthen band participation

The major stock indexes continued to fluctuate and made slight corrections on Thursday, with a turnover of 764 billion in the two cities. Observed from the disk, the textile and clothing, coal, insurance and banking sectors were among the top gainers, while shipbuilding, gallium nitride, third-generation semiconductors, photovoltaics and other sectors were among the top losers. The speculation in industry sectors showed great differentiation. In terms of news, the central bank’s new stance allowed macroeconomics The periodic increase in the leverage ratio is conducive to continuing to consolidate the results of the national economy and creating conditions for the future. In addition, the expectation of RMB appreciation is still strong, and it is expected that the short-term stock index will continue to fluctuate slightly. In terms of operation, it is advisable to flexibly control positions and strengthen band participation. It is recommended to pay attention to: new energy, semiconductor, chemical industry, engineering machinery and other sectors on dips. 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: Central Bank: Inclusive small and micro loans are growing rapidly, and loan interest rates continue to fall

Event: The central bank released China’s inclusive finance indicator analysis report (2019) and mentioned that inclusive small and micro loans have grown rapidly, the coverage of supporting small and micro business entities has continued to expand, and loan interest rates have continued to decline.

Comment: As of the end of 2019, the balance of inclusive small and micro loans was 11.59 trillion yuan, a year-on-year increase of 23.1%, 7.9 percentage points higher than the end of the previous year. The annual increase was 2.09 trillion yuan, an increase of 852.5 billion year-on-year. Yuan, the news shows that the central bank's support for small and micro loans is obvious, and the data shows that it has been basically implemented and the results are obvious.

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

Construction machinery: New and old infrastructure efforts will extend the prosperity of construction machinery, and industry valuation is expected to increase

New and old infrastructure has made great efforts to extend the construction machinery boom, and urban rail approvals have been accelerated: In the face of sluggish external demand caused by the spread of overseas epidemics, new and old infrastructure will become the main source of growth. The development of infrastructure will directly drive the growth of demand for construction machinery. It is recommended to actively pay attention to the relevant beneficiary leaders in the industry.

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