Financial sector website news This week's cyclical stocks continued to shine, causing strong market attention. The Essence Strategy and the various cycle research groups held the first conference call "The follow-up interpretation of the current time at this moment" after the closing of yesterday, which was enthusiastically participated by investors. Hereby, the minutes of the conference call will be sorted out to readers.

Participating guests (in order of speech): Chief Analyst of Strategy Team (Chen Guo), Chief Analyst of Coal Team (Zhou Tai), Chief Analyst of Nonferrous Group (Qiding), Chief Analyst of Chemical Team (Yuan Shanzhen), Chief of Mechanical Team Analyst (Wang Shuwei), chief analyst of the light industry team (Zhou Wenbo), chief analyst of the Agriculture, Forestry, Animal Husbandry and Fishery Team (Li Jiafeng). Moderator: Lin Rongxiong (Anxin Strategy)

1. Strategy (Chief: Chen Guo): The core of the current stage is the cycle

In the near future, we continue to emphasize that the market has entered a staged offensive mode. The cyclical stocks are the core, and the sorting of coking coal and steel is colored, and the logic continues to be verified. In the offensive period, the selection section looks at the positive logic. From profitability to valuation, the current cycle sector has the most positive logic. Therefore, we continued to be optimistic about the cycle at the end of August to usher in a wave of continued market. At this stage, we believe that the negative logic of cyclical stocks - policy adjustments at the supply end and significant downwards at the demand side will not occur in September. In terms of policy, in the medium term, it is expected that reducing the asset-liability ratio of the upstream industry is the core goal without affecting the exit of key enterprises in the midstream industry. This means that even if there is a policy adjustment in the future, at least before the promotion of refinancing, the upstream earnings will remain high, and the corresponding valuation is still attractive. On the demand side, the mid-view data in August indicates that the peak season is about to start, and the inventory is still at a low level. In the A-share market attack period, the rise in spot futures prices will push the cyclical stocks up. The decrease in the cycle asset-liability ratio led to the continued appreciation of the bank's valuation, which led to the index, risk appetite and brokerage stock market. But the cycle is still the core logic. Comprehensive price trends and stock reaction expectations, focusing on coking coal, steel, electrolytic aluminum, rare earth, chemical, financial, the preferred broker at this stage.

Risk warning: supply side policy adjustment

2. Coal (Zhoutai): The supply-side reform was completed in stages, and global demand improved to boost coking coal

The supply-side reform was completed in stages, the global demand improved to boost the price of coking coal, and the price elasticity performance elasticity double-drive superimposed low valuation. The key recommendation was 潞 环 环 601 601699, diagnostic stock , Pingmei 601666, diagnostic stock , Xishan Coal and Electricity 000983, consultation stock . At present, the supply-side reform of coal has been completed in stages in the first half of the year. Under the background that the whole industry is in a state of full production, and there is little room for capacity contraction or release, global demand improvement has boosted the price of coking coal. Domestically, demand remained high. Steel production in the first half of the year increased by 5% year-on-year, and in July it increased by 10% year-on-year. It is expected to be flat in August. In foreign countries, in order to make up for China's steel export gap, overseas steel production is expected to increase month by month from August to the next six months. In 2015 and 2016, China's annual export of steel products is about 120 million tons. The global steel production (excluding China) is about 800 million tons. China's exports account for 15% of the world's other countries' consumption (about 900 million tons). In the first half of 2017, China's exports plummeted, falling 30 million tons, down 50% in July, and is expected to decline gradually in August and September. Faced with the supply gap caused by the sharp decline in China's exports, overseas blast furnace production has driven overseas raw materials, coking coal and iron ore prices soared by 50% in two months. Since the end of June, China's CIF price has risen from US$146 to US$216. Coking coal is reduced from 200 yuan per ton to 300 yuan per ton. In the context of China's high dependence on coking coal imports (20%), the price inversion has led to a decline in imports, driving domestic prices of coking coal prices to rise sharply. The price elasticity and performance elasticity drove the net profit of Lu'an Huaneng by 1.5 times in the first half of the year. The annualized valuation in the first half of the year was 13 times, and the second half was about 5 times. The low valuation was superimposed on performance growth and the allocation value was highlighted. It is recommended to focus on the coking coal standard of Chun'an Huaneng, Pingmei Coal and Xishan Coal.

The future price of thermal coal is not enough, but considering the current low inventory level, the price in the off-season does not fall. Earnings stability exceeds market expectations, there is a valuation repair market, which can focus on Shaanxi coal industry 601225 with better future cash flow performance, diagnostic stock , China Shenhua 601088, and stocks .

Risk warning: The macroeconomic downturn, coal prices fell sharply, and the improvement of Shanxi was lower than expected.

3. Non-colored (Qiding): September is firmly optimistic about electrolytic aluminum and lithium, cobalt, long-term optimistic about all varieties

In the long run, almost all of the colored varieties have gone through the inflection point. Due to the upward nesting inventory cycle of the production cycle, they will enter the long-term process of rising at the bottom of 5-6 years. Mainly optimistic about three types of varieties, first, strong demand pull, mainly lithium, cobalt, magnetic materials driven by the new cycle of new energy vehicles; second, strong supply contraction, mainly electrolytic aluminum, rare earth; third, global weak supply contraction + weak demand The recovery is mainly copper and small metal varieties. In the short term, in September, we are optimistic about the strong supply of contracted electrolytic aluminum and lithium and cobalt that are strongly demanded.

In terms of electrolytic aluminum, the supply side production reduction is the core. The low alumina inventory and the high performance elasticity are the accelerators. The key recommendation is Chinalco 601600, the medical stock , Yun Aluminum shares 000807, and the stock . Next week, the central inspection team will go to the local to supervise the production of illegal production capacity. The production capacity will not be shut down before 9.15, which will accelerate the shutdown, resulting in a rapid decline in monthly production and a marked downward turning point in inventory. Different from the slow decline in production and the accumulation of spot stocks since April, the second wave of the inflection point will be brought about by the reduction of production. The futures may break above 18,000, and the related varieties also have upward support. In addition, the previous period of electrolytic aluminum production led to inventory sales, the current alumina inventory is basically in place, the price began to rebound in 2300-2400, compared with the national average cost line 2200-2300, the adjustment space is small, it is recommended that the alumina self-sufficiency is high, with monopoly ability Manufacturers China Aluminum (200%), Yun Aluminum (60%); prebaked anode supply shrinkage, aluminum alloy performance elasticity, good self-sufficiency rate of China Aluminum (100%), cloud aluminum (80%) Recommended Shenhuo shares 000933, diagnostic stocks , coal and electrolytic aluminum two-wheel drive superimposed low valuation, but the increase in alumina prices led to a decline in its performance elasticity; focus on the future equity production capacity is expected to increase the Zhongfu Industry 600595, diagnostic stocks .

Lithium cobalt, the new energy supply pull superimposed high concentration of lithium cobalt long-term profile value is very large, concerned about the high growth, monopoly improve resource stocks, recommended continued attention lithium Ganfeng Lithium 002,460, clinic shares, Tian Qi Li industry 002466, diagnosis stock , Rongjie shares 002192, diagnostic stock ), cobalt Huayou cobalt industry 603799, diagnostic stock , Hanrui cobalt industry 300618, diagnostic stock , Luoyang molybdenum industry 603993, diagnostic stock , Pengxin resources 600490, diagnosis stock , road Technology 300,409, diagnostic stock ). On the demand side, new energy vehicle sales, downstream battery output and supply margins strengthened in August, laying the foundation for lithium cobalt price increases. On the supply side, lithium maintained a tight balance in 2017-2018. In the short term, the shutdown of lithium carbonate plants led to an effective supply of lithium ore. In terms of cobalt, environmental supervision led to a decrease of 200 tons per month in the production of cobalt in Shandong Dachang; The quarterly elections have led to turbulence and uncertainty in the Congo’s supply; The increase in demand and the contraction of supply have led to the exhaustion of domestic stocks, and the domestic and international spreads have gradually tightened.

Risk warning: new energy vehicle demand is less than expected, supply growth rate exceeds expectations

4. Mechanical Group (Wang Shuwei): The demand for construction machinery has fully recovered, focusing on leading and importing alternative enterprises.

Mechanical engineering, PP P fueled by demand for a full recovery, concerns and do import substitution leading core components of the company, recommended Sany Heavy Industry 600031, clinic shares, Zoomlion 000157, attending stocks, Hengli hydraulic 601,100, diagnosed shares . Since the second half of last year, the PPP model has led to an increase in fixed asset investment. The cumulative investment growth rate in the first six months of this year was 22.26%, driving the demand for construction machinery. Excavators belong to the leading indicators of various categories of construction machinery. The cumulative sales volume from January to July this year was 75,000 units, an increase of 104.2%. The current industry recovery trend is being transmitted from the front-end engineering machinery to the back-end concrete and other mechanical equipment, and the industry's warming trend continues to strengthen.

In the case of a substantial increase in revenue, companies in the industry began to improve asset quality in a timely manner, such as Sany Heavy Industry and Zoomlion. From the semi-annual report, asset quality and cash flow have improved significantly; this is in line with the logic of cycle product recovery. First, the repair of the balance sheet will be beneficial to the long-term development.

We believe that the future investment in the construction machinery industry will focus on two main lines: First, the industry will return to normal development after five years of deep adjustment. The market position of leading enterprises will be further enhanced, and the situation of “strong and strong” will be strengthened. One heavy industry, Zoomlion, and the second is to focus on the industry to promote the import of core parts and replacements, recommend Hengli hydraulic.

In the three sub-sectors of coal mining machinery, container and metallurgical equipment, the downstream benefits from de-capacity, prices continue to rise, the economic benefits of downstream enterprises continue to improve, and equipment renewals generate concentrated demand for renewal.

Coal machine: The performance of coal enterprises reversed. The peak of coal machinery purchase last year was around 2011-2012. According to the service life of 5-8 years, starting from 2017, the demand for renewal will be released. Judging from the semi-annual report disclosed by coal mining enterprises, we have sufficient orders in hand, we recommend Tiandi Technology 600582, medical stock , Zheng coal machine 601717, medical stock .

Containers: Standing in the global market, the container industry is experiencing a cycle of recovery. Recommended CIMC Group 000039, diagnostic stock

Metallurgical equipment: steel prices continue to rise, steel companies improve economics; at the same time, the state strictly checks the "land-regulating steel" to adjust the use of scrap steel structure, scrap growth is on the right track, scrap processing equipment ushered in historic opportunities. Recommend Huahong Technology 002645, the stock , pay attention to Tianqi shares 002009, the stock .

Risk warning: the growth rate of fixed asset investment slows down, downstream demand fluctuates, and exchange rate fluctuates.

5. Chemical Group (Yuan Shanzhen): Optimistic about environmentally friendly dyes, carbon black, pesticides, rubber additives, PVC and additives, potassium sorbate, etc.

Dyes: The probability of rising again is expected to be large.

We have been repeatedly reminding us of major changes in the dye industry. “Disperse dyes started from 22,000 and went up to 2000/2000/4000/5000/5000 yuan/ton, reaching 40,000 yuan/ton”. Bauxite announced on August 23, our exclusive comment "We tracked and found that several executives including 阮加春 increased their holdings by more than 7 million shares around the beginning of 2016, and the price was around 18 yuan. The company disclosed in August 18 The newspaper is currently in the window of “reduction of the window” and continues to focus on the recommended sectors. Here, we again highlight that the disperse dye is expected to raise the offer again. 600352 Zhejiang Longsheng, attending shares, 002,440 shares leap soil, attending stocks, Anoky 300067, consultation shares owned 14,11 disperse production capacity and 3.5 million tons, up 1000 yuan per disperse bring annualized EPS upgraded to 0.03, 0.1 and 0.04 yuan. In addition, the reactive dyes have recently increased by more than 10,000 yuan/ton under the raw material, and the production capacity of Longsheng, Bauxite and Anuoqi is 7/4/1.5/1.5 million tons respectively, which also brings certain profit elasticity.

Carbon black:

Cabot raised the carbon black N330 price from 200 yuan to 6600 yuan / ton, the current supply of carbon black in Shandong is relatively tight, individual holders' intentions increase 800-1000 yuan / ton, overseas Ou Lilong raised from September 1 The US market carbon black is priced at $110/ton.

We have always believed that the supply side will see the carbon black industry's 2013 trough, the industry's de-capacity will have improved significantly in 2016, while environmental protection is tightening, small capacity is expected to accelerate, and industry consolidation is accelerating. The province of Hebei Province, Hebei Province, surrounded by the Beijing-Tianjin-Hebei smog area, the environmental protection supervision and limited production is the first to bear the brunt, and some leading enterprises in only some regions can only start 50%, and the small capacity will not open for a long time.

Continue to focus on Black Cat stock 002068, the stock , the company's carbon black production capacity of 1.08 million tons, 200 yuan price increase will bring the company annual profit of about 150 million yuan.

Glyphosate: supply and demand resonance prices are rising, continue to be optimistic about glyphosate

The price of glyphosate reappears. Recently, the price of Fuhua glyphosate in Shanghai has risen by 500 yuan to 2.55 million yuan. At present, the mainstream transaction price of glyphosate is 2.35-24,000, up 500 yuan from last week, up 2,500 yuan from the beginning of August, which is higher than the price in June. 4000 yuan / ton. The environmental protection has started to decrease. Sichuan's regional environmental supervision led the lower start of Fuhua and Bang, and Zhejiang glyphosate enterprises also overhauled. Baichuan data showed that the operating rate in Central China, East China and Southwest China fell to 45%, 20%, and 30%, and hit a new low for the year. The cost drive is easy to rise and fall. As the main producing area of ​​glycine in Hebei Province is the key area of ​​environmental protection, the export of glycine by-product hydrochloric acid is difficult. The daily output of the national enterprise has dropped from 900 tons/day to 400 tons/day, and the price of glycine is 14,000 yuan. Doubled, the price of yellow phosphorus has also risen from 11,000 yuan in September 2016 to nearly 15,000 yuan/ton. The US hurricane affected the raw materials, the US Hurricane Harvey landed in the US Gulf, the US Gulf was the main petrified area, and the raw material glacial acetic acid methanol caustic soda production capacity was affected. The supply of glyphosate in the United States is also likely to be passively tightened. Optimistic about the arrival of the future demand season and supply of glyphosate caused by compression resonance, recommended Xingfa Group 600141, diagnostic stocks (equipment 98,000 tons), Xinan shares 600596, diagnostic stocks (80,000 tons), Jiangshan shares 600389, diagnostic stocks (70,000 tons)

The industrial chain of pesticides is long, and environmental problems in each link will affect prices. In addition to glyphosate, Yangnong and Huifeng will continue to be recommended.

Yanggu Huatai 300121, diagnostic stock :

The promoter ns newly signed a single price increase of 5,000 to 35,000 yuan, the price trend of the accelerator is consistent, the company has 20,000 tons of ns and 10,000 tons of cbs capacity. Before the price increase, the company's net profit of 200 million in 17 years, and the increase of 5,000 yuan for the promoters brought about 100 million annual net profit elasticity.

The promoter market is relatively scattered, water pollution is serious, and the proportion of leading enterprises is less than 20%. It is mainly concentrated in Shandong/Henan/Tianjin/Inner Mongolia and other areas, and is a key area for environmental verification. Yang Valley uses a new solvent method to reduce wastewater discharge by 90%, which is a significant benefit.

We tracked the company's basic January 1 signing, so all will be executed at the new price in September.

PVC: At present, the operating rate of the industry is over 80%, and it is difficult to effectively improve. The industry stocks are low. In the short-term, it is subject to environmental protection in Xinjiang and the 70th anniversary of Inner Mongolia. The price increase is expected to exceed expectations. Affected by the post-real estate cycle, it is expected that the industry boom cycle will be maintained. The PVC price center is expected to remain at a higher position of 6300-6400. The target is recommended by Zhongtai Chemical 002092, the diagnostic stock , Xinjiang Tianye 600075, and the stock , focusing on Tianyuan Group 002386. , the diagnosis of stocks .

Vinegar shares 603,968, diagnostic stocks : environmental protection brings supply contraction, potassium sorbate industry boom is expected to rise

On July 21, Ningbo Wanglong received the administrative penalty issued by the Environmental Protection Bureau. On July 31, Shandong Yuda Biological showed that the production was stopped on the information of the Environmental Protection Bureau (28th is also normal production), Wang Long, Yuda potassium sorbate capacity distribution For the 60,000 tons and 30,000 tons, the industry accounts for 24% and 12%. The Central Environmental Protection Inspector Group is about to go to Shandong and Zhejiang provinces. We believe that the environmental incidents of the two companies are expected to continue to ferment. The current production capacity of sorbic acid potassium is 38,000 tons, and the market price is 28,000 yuan/ton. We estimate that the price of potassium sorbate increases by 1,000 yuan, which can increase the annual EPS of the company by 0.14 yuan. We upgraded the company's EPS for 2017-2019 to 1.11, 1.38 and 1.64 yuan, maintaining a Buy-A rating, with a 6-month target price of 33.3 yuan, corresponding to 30 times PE in 17 years.

Risk warning: product price decline risk, environmental protection is lower than expected risk

6. Agriculture, Forestry, Animal Husbandry and Fishery (Chief: Li Jiafeng): The situation in the pig market is uncertain and does not rule out the possibility of exceeding expectations.

The pig price cycle is different from the traditional one. It is not excluded that the pig price will exceed expectations in the next year. The neutral optimism will be maintained. The focus will be on the production capacity in the second half of the year and the pig price verification in the off-season next year. This round of pig cycle is different from the past. In 2015-2016, the price of pigs rose from 10-12 yuan to more than 20 yuan, an increase of nearly 100%. Since 2016, it has been in a downward channel. So far, the price has been around 15 yuan. Different from the past, the production capacity has not recovered significantly. The number of able-to-feed sows announced by the Ministry of Agriculture is still declining. Our first-line survey also shows that the sows are in a low position. From the second half of 2016 to the first half of 2017, the industry is in a slightly replenished state. It is expected that the pig price will not rise sharply in the second half of the year to the first half of 2018, and inflation pressure will not be great. At the same time, the low cost of breeding sows leads to lower cost of pig price breakdown. It is expected that the future price will be between 13-16 yuan, which is higher than the cost of farmers 11-12 yuan. In addition, the decline in profitability and the combination of environmental factors will lead to the closure of some pig factories and the decline in the enthusiasm of farmers. If the environmental protection production limit exceeds expectations in the second half of the year, the lack of a large number of eliminations will result in a sharp drop in production capacity, driving the pig price to rise more than expected in the second half of next year. Affected by multiple factors such as the strong growth cycle characteristics of the pig market, inflation expectations, environmental factors and excessive pessimistic expectations, the stock price of Makino rose more than expected, while the performance of other stocks generally indicated that the market did not form a consensus on pig prices. At present, we are neutral and optimistic about pig prices. We do not rule out the possibility of exceeding expectations. We will focus on the production capacity in the second half of the year and the verification of pig prices in the off-season next year. The downturn in the stock market in the previous period has led to a lower risk of stock price decline, and if there is a higher than expected factor in the later stage, it will have a greater impact.

Risk warning: the progress of environmental protection is less than expected

1.7. Light Industry Group (Chief: Zhou Wenbo): Copperplate, offset and white card entered the peak season in September, the first push of Bohui Paper 600966, the stock

In terms of price trends, the copper plate, offset plate and white card entered the peak season in September. The window of price increase was nearly half a year. It is expected that the growth rate will exceed 10% during the year; the price of box and corrugated paper will remain high, and the follow-up will follow the price of waste paper. In the previous report, "Welcome to the arrival of the paper industry," the paper mentioned that the paper has a clear season and the wood pulp is the raw material. The copper plate, offset plate and white card are the peak season from January to May, and the off season from June to August. In September, I entered the peak season again. The copper plate, offset plate and white card announced the price increase in September. We believe that the current price increase is at the beginning stage, and the next half year is the price increase window. We judged that the price increase during the year was between 600 and 700, reaching around 10%. Boxboard and corrugated paper, this year's restriction on waste paper import policy pushed up the price of domestic waste paper. Since February, it has risen from 1,800 yuan to 2,300-2,400 yuan, reaching the highest point in history. The cost-end drive box board and corrugated paper prices have risen to the highest level in history. The follow-up is expected to continue to follow the trend of waste paper and maintain a high overall growth. In summary, the price increase of these varieties of wood pulp has just begun, and it will rise to the next three to five months, with a time span of nearly half a year, and the range will be 10% within the year; the price of box and corrugated paper will remain high, and follow-up will follow the waste paper. Prices continue to rise.

From the perspective of supply and demand, the demand is stable, and the new projects on the supply side are less incremental. It is expected that the 2018 board and corrugated paper will remain relatively high overall in 2018, and the copper plate, offset plate and white card will be better. On the demand side, paper has the attributes of domestic consumption, and the demand is relatively stable, with an average annual growth rate of 3-5 points. On the supply side, from the data we tracked, there are not many new projects in 2016, and there will be a slight increase in 17-18 years, which will have little impact on the overall supply and demand. The structure of the boxboard and corrugated paper is mostly, copper plate, offset plate and white card. There are few new projects, but some of the board and corrugated products will be put into production in the second half of 2018. It is expected that the whole board and corrugated paper will maintain a relatively high level next year, and the copper plate, offset plate and white card will be better.

Profitability, product prices, high endogenous growth rate underestimate the value of overlay, white card recommended Bohui Paper, Sun Paper 002 078 Fine paper is recommended, and consultation shares Chenming Paper 000488, attending stocks, wrapping paper recommended Eagle Paper industry 600567, diagnostic stock . The copper plate, offset plate and white card are currently increasing between 400 and 500. Considering that the price will be raised by 600-700 during the year and the price of wood pulp rebounds, we will judge the overall profit to be 600-700. Most paper companies will have an endogenous growth of 30-40 next year. The current industry leader is 10-13 times, and is expected to be 8-10 times next year. This year, the supply of tight-selling boxboard and corrugated paper has the highest income. Considering the 6% supply of factory relocation, next year, the White Card will be the most demanding variety, the first to promote Bohui Paper; the cultural paper recommended Sun Paper and Chenming Paper , wrapping paper recommended Shanying Paper.

Risk warning: demand is less than expected