Hong Kong Stock Concept Tracking | Two major central enterprises were approved to issue 500 billion yuan special bonds and the equipment manufacturing sector is developing steadily (with concept stocks)

With the approval of the State Council and the arrangement of the State Assets Administration Commission, China Guoxin issued 300 billion yuan of special bonds for steady growth and expansion of investment, and China Chengtong issued 200 billion yuan of special bonds for steady growth and expansion of investment, all of which focus on supporting investments in “double” and “two new” projects, mainly including investment in major equipment renewal and technological transformation, investment in major scientific and technological innovation projects, and investment in major strategic emerging industries, etc., to promote the high-quality development of central enterprises and help the sustainable and healthy development of the national economy.

On November 21, the People's Bank of China, in conjunction with the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the Ministry of Finance, the Ministry of Agriculture and Rural Affairs, the Ministry of Transport, the State Council's State-owned Assets Administration Commission, and the General Administration of Financial Supervision, held a conference to promote scientific and technological innovation loans.

The conference pointed out that since the introduction of the relevant policies, local authorities, departments, and financial institutions have improved working mechanisms, strengthened coordination, refined work measures, and accelerated the achievement of “full coverage” of enterprises and project financing on the list. The scale of loan signing and investment has continued to expand, and implementation of the policy has achieved phased results. As of November 15, banks had signed loan contracts totaling nearly 400 billion yuan with 1,737 enterprises and projects, which strongly supported initial loans for technology-based enterprises in the start-up and growth stages and large-scale equipment upgrades in key areas.

The Zhitong Finance App learned that J.P. Morgan published a research report saying that the mainland government recently introduced a series of measures to boost the economy and exceed market expectations. The bank pointed out that the government has introduced actions to help growth, but there is still uncertainty about the effects of the policy. Investors are advised to increase their holdings in high-quality industrial capital goods companies, especially those with strong debt sheets and cash production capacity.

The Morgan Stanley Fund published an article stating that to some extent, equipment companies have a slight sense of “recession,” and the equipment manufacturing industry is under pressure on the performance level due to continued prudence in downstream production expansion. Looking forward to the future, we will focus on the progress of interest rate cuts. The export chain clearly fell sharply in the early stages. If interest rate cuts begin, it may be expected that recession transactions will move from recession transactions to interest rate cut channel transactions. Overall, the equipment manufacturing sector is currently still centered on stable and highly deterministic assets, including the shipbuilding sector, rail transit sector, and construction machinery sector. Follow-up suggestions continue to focus on the field of equipment renewal, especially in the field of subsidies where funds have been implemented, the field of equipment renewal for central enterprises, and the field of new productivity technology and robots in the future.

Industrial chain related to equipment renewal:

Rail transit sector: CRRC (01766), China Express (03969), etc.;

Construction machinery sector: Zoomlion Heavy Industries (01157), China Longgong (03339), First Tractor Co., Ltd. (00038), Sany International (00631), Zheng Meiji (00564), Sinotruk (03808), Weichai Power (02338), etc.