This article is excerpted from Shenwan Hongyuan Strategy's report published on March 3, 2022, "What is the impact of the Russian-Ukrainian conflict on various industries?" How sustainable is the high dividend strategy? ——Shenwan Hongyuan Key Hypothesis Table Adjustment and Communication Essence (March 2022).
On February 28, 2022, the Institute held a monthly exchange of views on system synergy in March 2022, which specifically discussed what impact the escalation of the Russian-Ukrainian conflict will have on various industries from the cost side and the trade side. In addition, has infrastructure and property investment stabilized? When will domestic wide credit be effective, and when will the economic bottom appear? Finally, what is the performance outlook for the growth sector in the first quarter? Is it currently price-effective? The highlights of this exchange and the main points of view in each field are as follows:
Domestic Economy: When exactly will the economy bottom? There are differences between macro credit release and mesoscopic data verification in both infrastructure and real estate
First of all, as the infrastructure investment with the highest short-term expectations for stable growth, infrastructure analysts believe that the stable growth expectations have indeed been accelerating, but the micro feedback that the implementation of some major projects has not yet started substantially, and the constraints or more are limited project flexibility rather than cost upward suppression. Macro analysts believe that the low operating rate of rebar does reflect that the implementation of traditional infrastructure is lower than expected, behind which is the trade-off of fiscal efficiency. Everyone has no disagreement about the pace of infrastructure construction throughout the year, and the project completion in the first half of the year is basically no disagreement, and the growth rate of traditional infrastructure throughout the year is expected to be 3%.
However, it was pointed out that the financial side is more active in infrastructure loans, and it is only a matter of time before the physical workload is implemented. In addition, real estate development loans have not yet improved.
Macro analysts believe that the real estate sales data after the Spring Festival is weak, and the effect of the policy side may need to wait until after Q2, when the sales data is expected to gradually improve, and the pressure on 3 and 4-tier cities is greater.
Strategists believe that the household savings rate has begun to marginally improve since Q3 of 21, and the substantial increase in the purchasing power of real estate is often more lagging behind, perhaps until around Q3 of 22 years.
Real estate analysts believe that the current policy easing point is more lagging behind expectations at the end of 21 years, and the intensity is more moderate. The low inventory on the supply side is the core constraint of the significant relaxation of the demand-side policy, and the intensive release of financing policies such as the "three red lines" on the supply side after the two sessions is worth looking forward to. Real estate data still needs to be further comprehensively lowered, focusing on when the land acquisition and construction data stabilize, and the fundamentals are likely to bottom after Q2 of 22 years.
Building materials analysts have reported that the actual inventory and price of cement and glass are weaker than expected, and the operating rate of infrastructure is better than that of real estate. The annual real estate rhythm judgment is consistent with that of real estate analysts.
Mechanical analysts verify that in terms of real estate infrastructure chain investment, excavator data has not yet seen signs of improvement.
The situation in Russia and Ukraine: What impact does the escalation of the conflict have on various industries from the cost side? Are there pressures on imported inflation?
On February 24, Putin authorized the Russian military to carry out special military operations in the Donbass region, and the tension between Russia and Ukraine escalated, Western sanctions intensified, and expectations of high global inflation heated up.
Macro analysts believe that the impact of the Ukraine event on oil prices is temporary, maintaining the judgment that crude oil prices are down during the year. Pay attention to the impact of OPEC+May production increases and weak demand after interest rate hikes in Europe and the United States on oil prices.
From a macro perspective, the rise in oil prices may lead to a high PPI of 8.7% in February. Overseas new energy analysts believe that the dependence of mainland natural gas on foreign countries is 45%, and the Russian-Ukrainian conflict has led to high oil and gas prices, which is relatively favorable to low-cost gas source companies, but the rising cost has a greater impact on the domestic pipeline network.
Shipping analysts believe that the short-term black sea cargo volume decreased, and the superimposed risk appetite declined BDI fell. The Baltic and Black Seas account for about 10% of the total cargo volume on the European route, and the main contradiction is the occurrence of embargo extremes
Which factor dominates the pressure on cargo volume and the efficiency loss caused by congestion on the European line terminals. In the medium term, if there is no extreme inflation, the increase in the distance brought about by the restructuring of the cargo flow structure will bring incremental demand for bulk cargo and oil tankers. If extreme inflation occurs, it will be difficult for shipping to be left alone under the impact of the global economy.
Auto analysts suggest that the Russian-Ukrainian conflict has a certain impact on automobile exports, and in 2021, China's exports to Russia and Ukraine will be about 13w units, with a relatively high growth rate of about 60 to 80%. In addition, Russia plays an important role in the export of raw materials for fuel vehicles, such as neon gas (which accounts for 70% of global exports), palladium (40%) and platinum (10%).
Agricultural analysts pointed out that 1/3 of the mainland corn imports come from Ukraine, and the ongoing conflict in Ukraine will bring about a supply shock. Electronic analysts believe that the Impact of the Russian-Ukrainian conflict on semiconductors is limited, and international manufacturers tend to replenish inventories to 6 to 8 months under the background of 21 years of shortages. In addition, 90% of the neon gas in the United States is supplied by Ukraine, and South Korean semiconductor companies such as Samsung and LG have previously built factories in Russia on a large scale, focusing on the opportunities brought about by the transfer of orders from the United States and South Korea to the country.
High Dividend Strategy: What are the high dividend sections of each industry? How sustainable is the high dividend market?
Coal analysts believe that under the support of the hedging attribute since the beginning of the year, the dividends of coal stocks are relatively clear, especially the dividend yield of Hong Kong stocks is more attractive. Shipping analysts believe that strong fundamentals are the core of the high dividend strategy, ports with price increase advantages and shipping high dividend logic with stronger cyclical attributes are smoother, while the high-speed operating life has declined, and market attention has weakened accordingly.
Home appliance analysts also suggested that although the home appliance target has the advantage of dividends, the pressure on industry costs (aluminum, steel) is still large, the superimposed demand side is weak, and the dividend logic may not be established. Pharmaceutical analysts believe that the industry's high dividend strategy can focus on the Traditional Chinese medicine sector and companies operating medical supplies in the early stage. Education analysts cautioned that the market was skeptical that education companies would be able to cash out their dividends, and to pay attention to cash dividends during the April interim results release period.
A quarterly report forward: has the growth style fallen out of the cost performance?
Food and beverage analysts believe that the epidemic has not had much negative impact on the sales of famous wines, and the first quarter of famous wines can still be expected. Continue to be optimistic about varieties that have the ability to continue to grow, continuously promote nationalization and high-end, and improve management and accelerate growth. The reversal of the Q2 report of mass products is already a consensus expectation, the current focus on peak season demand and price increase effect, Spring Festival demand is relatively flat, for the cost has been determined to decline, profit elasticity is larger and the valuation of reasonable varieties, recommended layout;
Pharmaceutical analysts believe that the upstream company's quarterly performance is expected to be better, including APIs, specialized and new, independent and controllable, etc., especially prompting that CXO's current layout is more cost-effective. The midstream performance outlook is relatively neutral, and the downstream consumer medical demand has not yet picked up;
Media analysts are pessimistic about the first quarterly report of games and advertising companies, while Internet companies still need to be patient and wait for the policy inflection point to appear, optimistic at the beginning of the second quarter, pessimistic at the end of the fourth quarter;
Military analysts believe that the industry's first quarterly performance is likely to meet expectations, and pay attention to the rebound opportunities of main engine factories and electronic supporting categories.
Mechanical analysts believe that the 1 quarter report will still absorb the higher raw material costs of 21 years. With the slowdown in the upward price of raw materials, especially for domestically replaced components, the improvement in profits will gradually be reflected in the next 3 quarters.
This article originated from the financial world