Introduction: Which industries and companies had a higher winning rate in July? What is the support of fundamental logic behind it? Which of these areas are worth focusing on? See the report for details:
1. Which industries and companies have a higher winning rate in July? Historically, the industries with higher winning rates and odds in July are mainly concentrated in the chemical, nonferrous metals, electric power, aquaculture and military industries. Comparing the excess winning rate and excess return rate of various industries in July in the past ten years, the direction of higher winning rate and odds is mainly concentrated in chemical industry, non-ferrous metals, electric power, aquaculture and military industry; From the perspective of specific subdivided industries, broiler breeding, polyurethane, coal chemical industry, precious metals, ground equipment, nitrogen fertilizer and special steel have reached 80% in July in the past ten years.
From the perspective of specific companies, CITIC Special Steel, Wanhua Chemical, AVIC Heavy Machinery, Hualu Hengsheng, Zhengbang Technology and Yunnan Copper and other companies had a relatively high excess winning rate in July. Among them, CITIC Special Steel, Wanhua Chemical, AVIC Heavy Machinery and Hualu Hengsheng have an excess winning rate of more than 90% in July in the past ten years.
2. What is the support of fundamental logic behind the industry with a high probability of rising in July?
Behind the industry with a high probability of rising in July, there are actually two fundamental logic supports:
On the one hand, July is the most effective month for transactions during the peak season of the year. In the third quarter, as production, construction, and summer consumer demand began to enter the peak season, the market's peak season trading sentiment will gradually increase. Judging from the stock price performance in the past ten years, July is the most significant month for the industry's annual excess returns in the peak season.
The chemical, non-ferrous metals, electric power and aquaculture with higher odds of winning in July all ushered in the peak season in the third quarter, and the marginal improvement of the demand side will give the industry a comparative advantage in the boom:
- First of all, the peak season of "Golden September and Silver October" is approaching, and the demand for stocks in chemicals, copper and aluminum, as well as cement, glass, steel and other industries in the real estate infrastructure chain is usually relatively strong. Judging from this year's situation, these varieties have gone to the warehouse in the past two years, and most of them are currently in a state of low inventory levels, tight supply and shrinking production capacity, and the improvement of demand in the peak season may further exacerbate the supply tension and catalyze price increases.
- Second, during the peak period of electricity consumption in summer, the power industry, especially the more seasonal hydropower, will significantly increase the power generation. This year, in the context of abundant water supply and increased hydropower output, the certainty of profit growth in the peak season of hydropower is still relatively strong.
- Finally, consumer demand in hogs, broilers, aquaculture and other industries will also usher in a seasonal recovery. With the transmission of production capacity to the reduction of supply, the price of live pigs has started a new round of upward cycle since the second quarter, and the price level of broilers and aquatic products is also expected to rise under the boost of the seasonal rebound in demand in the third and fourth quarters.
On the other hand, July is one of the most performance-oriented months of the year, and the market will pay more attention to trading realities and pay attention to the realization of fundamentals. According to the statistics of the correlation between the ranking of the market rise and fall and the ranking of performance growth rate in each month of the year, July is one of the months with the highest degree of market attention to performance, second only to April (the disclosure window of annual report and quarterly report), and this is mainly due to the intensive disclosure period of interim performance forecasts in July, and the disclosure rate of interim performance forecasts is usually higher, guiding the market to focus more on fundamentals and pay attention to trading reality.
Combined with our combing of the performance prospects of various industries ("It's time to look at the performance: what directions to focus on?") The direction of the dominant performance in the report will most likely be concentrated in the price increase chain, export chain and TMT:
- Price chain: non-ferrous metals (industrial metals, precious metals), petroleum and petrochemical (petroleum exploitation), basic chemicals (fluorine chemicals, TMA, tires, civil explosives, etc.) that benefit from rising prices;
- Export chain: export boom-supported machinery and equipment (general machinery, shipbuilding, etc.), household appliances (white electricity, clean appliances), textiles and apparel (textile manufacturing) and other directions;
- TMT: Benefiting from the high prosperity of the global AI industry, the recovery of consumer electronics demand, and the direction of electronics (consumer electronics, semiconductors, storage, panels, etc.), communications (optical modules), and computers (AI servers, computing power chips) supported by domestic substitution in the mainland.
- Others: In addition, the performance of public utilities (thermal power, hydropower), transportation (shipping, express delivery), non-bank finance (insurance) and other industries in the second quarter is also expected to be supported by the good economy.
Therefore, for the industry allocation in the coming period, it is recommended to focus on the fundamentals and follow the two boom clues of the peak season and the interim performance: on the one hand, focus on the peak season trading opportunities in the chemical, nonferrous metals, electric power, aquaculture and other industries; On the other hand, combined with the performance forward-looking, we are looking for the direction of the excellent performance in the report, mainly focusing on the price increase chain, export chain and TMT.
Risk Warning
Indicators are not well represented, historical experience is invalid, and the economy changes beyond expectations.
Note: The report in this article is excerpted from the research report published by the Industrial Securities Institute of Economics and Finance, and the specific report content and related risk warnings are detailed in the full report. Securities Research Report: Which Industries and Companies Have Higher Winning Rates in July? 》Released on July 2, 2024
Report Issuer: Industrial Securities Co., Ltd. (Licensed by the China Securities Regulatory Commission for Securities Investment Consulting Business) Analyst of this report:
Zhang Qiyao SAC Practising Certificate No.: S0190521080005
陈禹豪 SAC执业证书编号：S0190523070004
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