“Belt and Road” concept favored by capitals
Driven by bullish news, the “Belt and Road” concept has become the biggest market hotspot in the market. The stock price of China West Construction Group Co., Ltd. (002302.SZ) in the Xinjiang sector has surged by 54.88 percent since March 20, ranking first among all individual stocks except certain new shares. Sinoma International Engineering Co., Ltd. (600970.SH) and Jiangsu Lianyungang Port Co., Ltd. (601008.SH) also hiked over 35 percent. Based on the investment of margin capitals, infrastructure stocks with the name staring with China are favored by capitals again.
The margin balance of China State Construction Engineering Corporation Limited (601668.SH) has been increasing day by day since March 20 with a total net buy of 630 million yuan, ranking the second among all margin trading subject stocks flowing Industrial Bank Co., Ltd. (601166.SH) with 663 million yuan. Driven by margin capitals, the stock price of China State Construction Engineering has been hiking. It even surged by the daily limit of 10 percent driven by huge buyers on March 24 afternoon and closed 7.55 percent higher. Statistics show that the net margin buy amount of China State Construction Engineering has reached 362 million yuan. It witnessed a net margin buy amount of over 400 million yuan in a single day in the fourth quarter of last year. Correspondingly, the stock price of China State Construction Engineering soared 43.60 percent in the fourth quarter. Besides China State Construction Engineering, Sinoma International Engineering Co., Ltd. (600970.SH) and China Communications Construction Company Limited (01800.HK; 601800.SH) also recorded a net margin buy of over 200 million yuan since March 20.
Sinolink Securities Co., Ltd. (600109.SH) believes that as the Belt and Road Forum for International Cooperation will be held soon, the Belt and Road catches more attention currently. The construction industry will firstly benefit from the “Belt and Road” construction and listed companies in the industry are receiving more orders. As the core area along the Silk Road, advantageous industries in Xinjiang will benefit most. Investors are advised to pay attention to cement and energy industries in Xinjiang.
Margin investors concern about individual stocks with certain performance
499 margin trading subject stocks recorded net margin inflows since March, 31 of which have released the performance forecast for the first quarter of 2017 through various channels. 22 expected to see growth, 2 estimated to maintain growth and 2 will turn losses into profits. All these stocks are among those favored by margin investors and most of them are likely to see year-on-year growth in performance.
Beijing Sanju Environmental Protection & New Materials Co., Ltd. (300072.SZ) released the performance forecast on March 16, estimating that the net profit attributable shareholders of listed companies will reach 400 to 450 million yuan in the first quarter of 2017, representing an increase of 97.16 percent to 121.81 percent year on year. The increase is attributed to the orderly implementation of operating plans of the company during the period. Its businesses were under smooth progress and the business revenue and net profit maintained stable growth. The statistics on margin trading show that the margin balance of Sanju Environmental Protection saw continuous growth in March. The net margin buy amount has reached 697 million yuan from the beginning of March, increasing 28.58 percent. Driven by margin capitals, the stock price of Sanju Environmental Protection stood out in the environmental protection sector without highlights on the whole and recorded an increase of 28.73 percent in March.
In addition, ZTE Corporation (00763.HK; 000063.SZ), EVE Energy Co., Ltd. (300014.SZ) and Shenzhen O-film Tech Co., Ltd. (002456.SZ) have recorded a net margin buy of over 100 million yuan since the beginning of March and maintained year-on-year growth in the performance forecast for the first quarter. It is noteworthy that the stock prices of the above stocks also recorded high growth.
However, there are also exceptions. Wangsu Science & Technology Co., Ltd. (300017.SZ), which used to be a high quality stock on the ChiNext Board, has been disappointed recently. In the annual report released on March 13, the company estimated that it will record a net profit of 169,199,700 to 241,713,900 yuan in the first quarter of 2017, representing a decrease of 30 to 0 percent. It is mainly articulable to the decrease in the gross profit as a result of the declining market price caused by the intensified competition in the domestic CDN market. The decrease in net profit directly affected the stock price of the company. Its stock price plunged 9.91 percent on the day following the publication of the annual report and has plunged by 13 percent in the month. However, the falling decrease in the stock price attracted the attention of margin capitals. Wangsu Science & Technology has recorded a net buy of 1,081 million yuan in March. It recorded the highest growth in margin capitals on March 14 to 16 when the stock price saw the biggest declines. The move of margin investors is also worthy of attention.
[Investment opportunities]
“Belt and Road” conditions improved, Belt and Road Forum to bring more benefits in May?
Analysts estimate that the “Belt and Road” theme will continue booming. It will be a highly expected highlight in the stock market and real economies in 2017. The Belt and Road Forum in May will be a window period for investment.
Minsheng Securities Co., Ltd. believes that as the “Belt and Road” initiatives are under the construction of infrastructure in the early sage and it will focus on capacities cooperation in 2017, investors are advised to make investments on three key themes, namely the international facilities construction; secondly, domestic infrastructure construction and capacity chains; and thirdly, export trade chains. In addition, shipping and logistics industries may also be concerned.
China West Construction becomes top bullish stock, regional conditions may reappear
China Merchants Securities Co., Ltd. (600999.SH) advises to focus on the following sectors in choosing opportunities in local infrastructure. Firstly, provinces with higher growth in investment in fixed assets in 2017 compared with 2016 and those with less developed economies or significant declines in economic growth, such as Liaoning, Xinjiang, Heilongjiang, Fujian, Guangxi, Ningxia and Inner Mongolia, as proposed in the government work report. Secondly, provinces with an average growth of over 12 percent in recent four years (including the target growth in 2017), such as Henan, Guangdong, Hunan, Jiangxi, Yunnan and Chongqing. Thirdly, such provinces as Liaoning and Guangdong may have resonance effects with the supply-side reform and state-owned enterprises reform based on the current market conditions.
Keep constant attention to investment opportunities in industrial leaders and Belt and Road theme
The Belt and Road will remain a key theme in the capital market in short term, indicated Morgan Stanley Huaxin Funds. The introduction of the Belt and Road website and the opening of Boao Forum for Asia will continue to promote the booming of the theme. The Belt and Road Forum for International Cooperation will be held in Beijing in May, followed by the BRICS Summit. With the advancing the Belt and Road strategy, more orders will be placed in countries along the Belt and Road, which will promote the upgrading of theme investment to performance-driven investment in the region.
Institutes invest in paper-making industry, supply-side reform to benefit
Based on the annual report of Yueyang Forest & Paper Co., Ltd. (600963.SH), its stocks were bought by social insurance, public funds, securities companies and other institutes. Other paper-making companies were also increased by institutes. It shows that institutes are rosy about the paper-making sector.
Net value of “Belt and Road” theme funds surge and hot concept stocks are favored
With the publication of annual reports, the positions of “Belt and Road” theme funds are also disclosed. It is learnt that currently the minimum position of stock funds is 80 percent. The proportion investment in securities asset with the theme of the “Belt and Road” is no less than80 percent of the assets of non-monetary funds. The funds with flexible allocations are more diversified with a stock position of 0 to 95 percent. Such funds also stipulated certain proportions of investment in securities with the theme of the “Belt and Road”.
StarRock pointed out that agriculture will be another sector going out after the high-speed rail and other infrastructure. The agriculture in countries the Belt and Road is less developed with outdated water conservancy infrastructure and technologies. They have strong demands fro agricultural products, agricultural machinery, seeds, compound fertilizers and quarantine.
“Belt and Road” theme funds lead others in performance
Statistics show that the “Belt and Road” Index has surged over 15.58 percent this year while the CSI 300 Index just hiked 4.83 percent in the same period. Meanwhile, relevant theme funds also performed well. The “Belt and Road” theme fund saw a yield rate of 1.47 percent in the recent week, ranking top 8 percent among 157 categories of theme funds. Insiders estimate that funds will favor leading value stocks with stable growth, which will gradually invest in stocks with outstanding performance in the future.
As for the selection of relevant funds, investors are advised to consider the following two aspects: Firstly, the purity of the theme, which can be identified from the contract and the position; and secondly, the active management ability of fund managers, which can affect the yields of the funds compared with other funds with the same theme, indicated Lei Xin, a researcher at howbuy.com.
Translated by Star
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