Every reporter: Wang Yandan Every editor: He Jianling
Picture source: Photograph.com
After previous adjustments, today's coal and steel sectors are receiving funding attention again. Regarding the current round of resource stocks, the industry has even shouted the view that "prices will not stop, stocks will not stop". Although the market is still divergent, it is believed that the market is still not over under the background of low institutional allocation ratio and tight short-term supply and demand. So, how is the current round of resource stocks qualitative? How will sustainability be controlled?
On the afternoon of September 16th, China Merchants Fund balanced investment expert Li Ying was a guest. Every time through the APP "Haoge's Afternoon Tea" live broadcast room, he shared with investors the possible opportunities and risks in the future of the coal and steel sectors. .
Li Ying, a balanced investment expert of China Merchants Fund (picture source: provided by the interviewee)
The rise in steel, coal, and non-ferrous metals is mainly supported by three major logics
Li Ying pointed out that this round of steel, coal, The non-ferrous growth is mainly supported by the following three logics:
First, the supply-side structural reform after 2016 has solved some long-standing problems in the past. The so-called cyclical industries such as steel, coal, and non-ferrous metals have emerged in the past. Some very obvious changes, reflected in the report of listed companies, are the increase in profitability stability.
Second, after the 2020 epidemic, most of the world's monetary policy has adopted a loose state. Unlike the global easing of the 2008 financial crisis, when liquidity was basically accumulated in the financial system, this global monetary easing has effectively stimulated physical demand. This is the biggest difference from past monetary easing, and it is also the logic behind the biggest increase in commodity prices and the stock prices of related industries in this round.
Third, from the perspective of valuation, due to the cyclical weakening of coal, steel and other industries, and the increase in profitability, its net assets per share are also accumulating. In addition, taking steel stocks as an example, compared with more than ten or twenty years ago, the global competitiveness of my country's listed steel companies, especially leading companies, has been significantly enhanced. In this case, this year’s semi-annual report shows thatCoal, steel and other industries have experienced double lows of PB and PE, which is a rare investment opportunity.
The third-quarter performance of steel companies will be very good. The current valuation is still low
Li Ying also analyzed the latest data of the steel industry and the latest investment recommendations to investors.
He pointed out that from the overall output data of the iron and steel industry just obtained in August, the output of the iron and steel industry is declining both year-on-year and month-on-month. This shows that my country's current production restriction policy is relatively in place.
In terms of prices, the price drop of finished steel products is much smaller than that of upstream iron ore. According to the sales software APP of a leading steel company, the latest price of finished steel products has only slightly dropped from the first half of the year, but the price of iron ore has been cut in half. This is a situation that is more in line with national interests and industrial policies.
Therefore, Li Ying predicts that the profitability of major listed steel companies in the third quarter is still relatively good, and may exceed market expectations, because the market felt that the second quarter was the high point of this year's profitability of listed steel companies, and the third quarter would decline again.
He also emphasized that although the steel sector has risen, the PB level of the leading domestic steel companies is only about 1.2 times. It is unreasonable to give them such a low valuation for a long time. This is the bias of the market. Investment should break this prejudice and try to choose some all-round opportunities.
High coal prices cause serious losses in downstream thermal power. Risks may accumulate
But at the same time, Li Ying also pointed out that the logic of coal investment is different from that of steel. Generally speaking, steel actually belongs to the processing and manufacturing industry in the middle reaches, but coal is indeed resource-based, so the fundamental logic of investment between the two is not the same.
Specifically, after five or six years of supply-side structural reforms, the increase in the standardization of listed coal companies, the gap between supply and demand, and the relatively low superimposed valuation level are the basis for this round of increases.
In fact, in the context of the “dual-carbon” strategy, the coal industry’s capacity increase is limited. It may take more than five years for a coal mine from approval to commissioning. However, the demand for coal has been increasing slowly, such as electric vehicles, which require additional power support.Even if investment in new energy power is very hot, in general, new energy accounts for a small proportion of the power industry and is not as stable as thermal power. There is no doubt that "dual carbon" is a long-term long-term goal, but the current stage is still inseparable from the demand for thermal power.
He pointed out that, in general, coal valuation is similar to steel — it breaks the net for a long time and trades at a “bankruptcy price”. But in fact, in terms of profitability, some leading listed thermal coal companies have good profits and high dividends. Therefore, the previous rise of coal stocks can also be regarded as a return to reasonable value.
However, Li Ying emphasized that unlike steel, coal prices have reached a relatively high level. Judging from the current prices, the thermal power industry suffers more serious losses, and electricity involves people’s livelihood issues, so it will be difficult to continue this way. From this perspective, it is difficult to answer clearly whether the price of coal will continue to rise, and the risk of the coal sector may also gradually accumulate after the previous rise.
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