Second tier blue chips need to be further explored in three major sectors
http://www.sina.com.cn 08:40, January 5, 2007 Daily Economic News
On the first trading day of 2007, the market got off to a good start. However, the market rose and fell, and the polarization of individual stocks was obvious. Industry insiders pointed out that in the process of continuous rise of the market, the main institutions are actively adjusting their positions, reducing their holdings of individual stocks with high valuations, and increasing their positions of second tier blue chips such as electricity, automobiles and highways.
Operationally, investors need to look for second tier blue chips with better growth through the current index illusion to make rational investment. The leading stocks of several second tier blue chip sectors, such as power, automobile and cement, deserve special attention.
Power sector: focus on high growth stocks of installed capacity
Haitong Securities pointed out that since the end of June 2006, "coal power linkage", the profitability of the power sector has rebounded. From the situation in the first three quarters of 2006, the gross profit rate of the power sector reached 23.6%, higher than 22.2% in the same period of 2005. At the same time, the net profit increased by 13.9% year on year, and the prosperity of the industry rebounded significantly.
However, throughout 2006, the performance of the power sector lagged far behind the market, and there was a large demand for replenishment. With the formation of coal and electricity price linkage mechanism, the blue chip power companies that have entered the peak period of production of some units will face significant growth in performance, such as Huaneng International 、 Huadian International 、 Guodian Power All of them deserve special attention.
Cement sector: focus on regional leading stocks
Guojin Securities believes that, according to the data published in 2006, the production and sales of cement across the country grew rapidly, the price recovered steadily in the first three quarters, accelerated in the fourth quarter, and the profitability of the industry rebounded significantly. The industry has walked out of the cyclical trough in 2005.
In terms of stock selection ideas, it is suggested to focus on the absolutely large Conch cement Leading cement enterprises in regions where fixed asset investment will maintain rapid growth, and individual stocks with mergers and acquisitions.
Auto sector: focus on leading stocks conforming to policy guidance
Shenyin Wanguo Securities pointed out that recently, the National Development and Reform Commission issued the Notice on the Opinions of the National Development and Reform Commission on the Restructuring of the Automotive Industry, clearly encouraging the development of energy-saving and environment-friendly vehicles and self owned brand products, promoting the joint restructuring of automobile manufacturers and other policy orientations, and large automobile groups will benefit from the above policies.
In the secondary market, since August 2006, the auto sector index has risen by less than 37%, more than 25% behind the market, and there is a huge demand for additional growth. With the sound development of the fundamentals of the automobile industry and the huge development space of the automobile industry in the future, as a typical second tier blue chip plate, this plate is still expected to continue to rise, and the leading stocks among them need special attention. Yu Chunmin Daily Economic News
Sina statement: The content of this article is purely the author's personal view, only for investors' reference, and does not constitute investment advice. Investors operate accordingly at their own risk.
