The Zhitong Finance App learned that Cinda Securities released a research report saying that the State Council issued the “Action Plan to Promote Large-scale Equipment Renewal and Consumer Goods Trade-In”, focusing on promoting new industrialization, with energy saving and carbon reduction, ultra-low emissions, safe production, digital transformation, and intelligent upgrading as important directions, focusing on key industries such as steel, non-ferrous, petrochemicals, chemicals, building materials, electricity, machinery, aviation, ships, textiles, electronics, etc., to vigorously promote the renewal and technological transformation of production equipment, energy use equipment, power transmission and distribution equipment, etc.
In terms of individual stocks, the bank suggests focusing on:
1) The machine tool industry has opportunities for upgrading: it is recommended to focus on Neway CNC (688697.SH), Haitian Precision (601882.SH), Guosheng Intelligent Technology (688558.SH), etc.
2) The 2024 Central Committee Document No. 1 proposed “vigorously implementing actions to repair shortcomings in agricultural machinery equipment and improving agricultural machinery purchase and application subsidy policies. China's agricultural machinery industry has significant replacement needs. It is recommended to focus on: Yituo Co., Ltd. (601038.SH), Weima Agricultural Machinery (301533.SZ), etc.
3) Domestic construction machinery has replacement needs: it is recommended to focus on Sany Heavy Industries (600031.SH), Xugong Machinery (000425.SZ), Liugong (000528.SZ), etc.
4) In terms of new productivity, focus on robot industry chain opportunities under the trend of machine replacement and domestic substitution: Eston (002747.SZ), Huichuan Technology (300124.SZ), Tuopu Group (601689.SH), etc.
5) Other industries are booming, or there are alpha stocks: AGCO Technology (688092.SH), Honghua Digital (688789.SH), Jerry Co., Ltd. (002353.SZ), etc.
The main views of Cinda Securities are as follows:
Core views:
On March 13, the State Council issued the “Action Plan to Promote Large-scale Equipment Renewal and Consumer Goods Trade-In”, which proposes “by 2027, the scale of investment in equipment in the fields of industry, agriculture, construction, transportation, education, cultural tourism, medical care, etc. will increase by more than 25% compared to 2023; the energy efficiency of major energy equipment in key industries will basically reach energy efficiency levels, and the production capacity ratio of environmental protection performance to level A will increase dramatically; the penetration rate of digital R&D design tools and key processes in industrial enterprises above scale will exceed 90% and 75%, respectively.” It takes energy saving and carbon reduction, ultra-low emissions, production safety, digital transformation, and intelligent upgrading as important directions, focusing on key industries such as steel, non-ferrous, petrochemicals, chemicals, building materials, electricity, machinery, aviation, shipping, textile, electronics, etc., and vigorously promoting the renewal and technological transformation of production equipment, energy use equipment, power transmission and distribution equipment, etc.” Recommended attention:
1) The machine tool industry has opportunities for upgrading: it is recommended to focus on Neway CNC, Haitian Precision, Guosheng Intelligent Technology, Huazhong CNC, Kode CNC, etc.
2) The 2024 Central Committee Document No. 1 proposed “vigorously implementing actions to repair shortcomings in agricultural machinery equipment and improving agricultural machinery purchase and application subsidy policies. China's agricultural machinery industry has extensive replacement needs. It is recommended to focus on: Yituo Shares, Weimar Agricultural Machinery, etc.
3) Domestic construction machinery has replacement needs: it is recommended to focus on Sany Heavy Industries, Xugong Machinery, Liugong, etc.
4) In terms of new productivity, focus on machine replacement and robot industry chain opportunities under the domestic substitution trend: Eston, Huichuan Technology, Tuopu Group, Sanhua Intelligent Control, Double Ring Drive, Hengli Hydraulic, Green Harmonic, etc.
5) Other industries are booming, or there are alpha stocks: AGCO Technology, Honghua Mathematics, Jerry Shares, Emerging Shares, Planet Graphite, Weichuang Electric, CIMC Group, Howson, Sifang Technology, etc.
Investment in manufacturing and infrastructure remains resilient, and real estate remains under pressure:
The cumulative total amount of fixed asset investment completed in the manufacturing industry increased by 9.4% year-on-year in January-February 2024, and the increase increased, maintaining strong resilience. Domestic infrastructure fixed asset investment grew 8.95% year-on-year in January-February 2024, and infrastructure construction investment (excluding electricity) grew 6.3% year-on-year, continuing to improve; in January-January, the year-on-year growth rate of real estate investment completed was -9.0%, and the decline was narrower than in the full year of 2023. Considering the significant volume of special bonds issued since August '23, trillions of treasury bonds have been issued one after another. The central bank continued to invest 150 billion dollars in January after adding 350 billion PSL loans in December. We judge that domestic sales of excavators are expected to continue to improve; the impact of the high export data base is gradually weakening, and the construction machinery industry can be expected to recover. CME estimates that excavator sales will be around 25,000 units in March 2024, down 2.26% year on year, and the decline improved significantly from month to month. Its estimated sales volume in the Chinese domestic market was 14,800 units, up 6.48% year on year, and the market resumed positive growth.
Risk Factors:
The recovery in demand fell short of expectations, and there is a risk of fluctuations in raw material prices.