(February 17 Online Live Broadcast)
Morning Market News
Today's Focus
1. Tightening of liquidity as three factors push up money market rates
Content: The central bank implemented a positive repo operation of RMB 1 billion for a 91-day term on Thursday, with a winning bid rate of 3.16%, and continued to suspend the issuance of central bank bills. Data shows that this week, there is RMB 7 billion in expiring funds in the open market. On Tuesday and Thursday, the central bank conducted positive repo operations totaling RMB 1.6 billion, achieving a net withdrawal of RMB 900 million in funds. Last week, the central bank achieved a net withdrawal of RMB 4.4 billion through positive repo operations.
Commentary: This weakens market expectations for easing of monetary policy.
2. A 40% drop in restricted shares available next week
Content: Statistics show that next week, there will be 1.243 billion shares of restricted stock from 10 listed companies being released, which represents a 41.21% decrease compared to this week. If calculated based on yesterday's (February 16) closing price, the market value of the restricted shares being released is RMB 30.337 billion, representing an 84.34% increase.
Commentary: The decline in the volume of releases benefits the market to a certain extent.
Industry News
1. Seven Ministries jointly issue documents requiring financial support for tourism
Content: The People's Bank of China, National Development and Reform Commission, National Tourism Administration, China Banking Regulatory Commission, China Securities Regulatory Commission, China Insurance Regulatory Commission, and State Administration of Foreign Exchange recently jointly issued "Several Opinions on Financial Support for Accelerating the Development of Tourism" to strengthen and improve financial services for the tourism industry and support and promote the rapid development of tourism.
Commentary: Tourism is a steadily developing industry with the improvement of people's living standards. Due to holiday and climate conditions, the tourism market exhibits obvious seasonal factors. There is usually a wave of speculative activity before May Day and National Day. However, the policies introduced at this time have minimal impact on tourism stocks.
2. MIIT strengthens the "Broadband China" strategy
Content: At the "2012 Broadband China Strategy Service Information Promotion Conference" held on February 16, relevant leaders of the MIIT indicated that the "Broadband China" strategy would be strengthened throughout the "12th Five-Year Plan" period. The government will promote informatization and broadband development through broadband strategies, broadband special funds, universal service funds, investment and financing policies, etc., aiming to achieve urban family bandwidth of over 20 Mbps by the end of 2015, rural families at over 4 Mbps, and provincial capital cities in developed areas in the east at over 100 Mbps.
Commentary: Industry insiders pointed out that the above-mentioned statement by the MIIT means that the "Broadband China" strategy has been strengthened at the MIIT and national levels. Compared to the document issued by seven ministries including the NDRC in 2010, the goals are more ambitious. In terms of benefiting companies, broadband equipment providers such as FiberHome should benefit first, while broadband application industries represented by LeTV will ultimately benefit.
Company News
1. Profit Distribution Plans
1) Yu Yin Shares (002177 Valuation, Evaluation, Market Conditions, Information, Major Player Trading) announced its 2011 annual report on the evening of February 16. During the reporting period, the company realized operating revenue of RMB 741 million, an increase of 58.36% compared to the same period last year. It realized net profit attributable to listed company shareholders of RMB 178 million, an increase of 90.13% compared to the same period last year. Basic earnings per share were RMB 0.52. Additionally, the company's 2011 annual profit distribution plan is based on a total share capital of 344.43 million shares as of December 31, 2011, proposing to distribute cash dividends of RMB 0.50 (tax included) per 10 shares. Based on a total share capital of 344.43 million shares as of the end of 2011, it is proposed to convert capital reserve into additional shares at a ratio of 7 shares for every 10 shares.
2) Bai Li Lian (002601 Valuation, Evaluation, Market Conditions, Information, Major Player Trading) disclosed its 2011 annual profit distribution plan on the evening of February 16. The company's 2011 annual profit distribution plan proposes to use the total share capital of 94 million shares as of December 31, 2011 as the base, distributing cash dividends of RMB 7.00 per 10 shares (tax included) to all shareholders; simultaneously converting capital reserve into additional shares at a ratio of 10 shares for every 10 shares.
3) Bao Li Asphalt (300135 Valuation, Evaluation, Market Conditions, Information, Major Player Trading) disclosed its 2011 annual performance fast report on the evening of February 16. During the reporting period, the company realized operating revenue of RMB 1.13 billion, an increase of 6.57%; net profit attributable to listed company shareholders of RMB 58.7946 million, a decrease of 23.44%; basic earnings per share were RMB 0.46. The company disclosed its 2011 annual profit distribution plan, proposing to use the total share capital of 160 million shares as of December 31, 2011 as the base, distributing cash dividends of RMB 2.00 per 10 shares (tax included) to all shareholders; simultaneously converting capital reserve into additional shares at a ratio of 10 shares for every 10 shares.
4) Sheng Nong Development's net profit increased by nearly 70%, planning to distribute RMB 300 million in cash dividends.
Driven by the general rise in agricultural product prices, Sheng Nong Development's 2011 performance grew significantly. The company today released its annual report, showing that its 2011 operating revenue exceeded RMB 3.1 billion, growing by 50%, realizing net profit attributable to listed company shareholders of RMB 468 million, increasing by 68.46%. With significant growth in benefits, the board plans to distribute RMB 300 million in cash dividends.
2. Instrument Electric Holding makes a large purchase of Fei Le Shares to strengthen control over its subsidiaries
Fei Le Shares released a rights change report today, stating that from November 11, 2011 to February 14, 2012, Instrument Electric Holding cumulatively purchased 36.9474 million shares of Fei Le Shares through securities exchange transactions, accounting for 4.9% of the total number of shares. As of now, Instrument Electric Holding holds 135 million shares of Fei Le Shares, accounting for 17.82% of the total number of shares. Calculated using the weighted average price of RMB 4.816 from November 11, 2011 to February 14, 2012, this purchase cost a total of RMB 1.78 billion.
Market Prediction for Today: Last night, the dollar index chose to move downward at the 40 moving average line, the euro surged, and the US NASDAQ index hit a new high again. Regarding the continuous fluctuations of the Shanghai Composite Index near the 120 moving average line, there is no need to worry excessively. Currently, the main force has not absorbed enough chips, and utilizing adjustments to absorb chips is necessary. Short-term adjustments are opportunities, and breaking upward later is a high-probability event. High-level leaders continue to express that the A-share market has extremely high investment value, so investment must follow the party's guidance!
9:35 Both the Shanghai and Shenzhen markets opened higher. After continuous increases, market fatigue continues to emerge. Investors are advised to pay attention to overall positions and individual stock selection, avoiding already elevated stocks while focusing on underperforming stocks still at lower positions.
9:45 From a technical perspective, the market's fluctuations around the 2400-point area are of a washing-out nature. Therefore, the current strategy remains one of positioning low.
9:57 Banks' lack of funds may pressure the Shanghai-Shenzhen indices. Looking at the interbank lending market's funding rates, they generally show an upward trend. To alleviate the tightness of interbank funds, the central bank extended the trading hours of the interbank market. This situation also occurred on January 17. Subsequently, the central bank chose to conduct a large amount of reverse repurchase. If the central bank conducts a similar large-scale reverse repurchase as before, the market's tight funding situation might change; but we'd have to wait until next Tuesday unless the reserve requirement ratio is cut or targeted reverse repurchases occur, otherwise, the interbank funding situation won't see significant improvement.
10:08 Previously recommended to everyone, 002225 Puhai Stock experienced a gain exceeding 3 points today. Investors who bought can find a high point to sell these days.
10:18 Technically, the stock index faces pressure from the 120-day moving average and wedge upper rail, supported below by the 5-day and 10-day moving averages. The narrowing wedge pattern on the daily chart suggests a short-term direction change.
10:25 The market lacks mainstream bullish sectors. Investors who have emptied their positions can wait for further entry opportunities after a pullback.
10:40 Short-term attention should be paid to the support role of the 10-day moving average.
10:50 As expected, the market made a direction choice, and a short-term pullback is normal. As mentioned earlier, the main force hasn't absorbed enough chips, so further suppression is necessary. Only then can they collect cheaper chips. However, the mid-term bullish view remains unchanged.
11:00 Real estate sales performance generally declined, causing sluggish performances in real estate stocks early in the session.
11:06 The two markets showed a high opening followed by a low walk trend. Fund flow data shows eight sectors abandoned by over RMB 100 million in funds: electronic components (-RMB 267 million), pharmaceuticals (-RMB 166 million), information electronics (-RMB 158 million), agriculture, husbandry, feed, fishing (-RMB 143 million), cement building materials (-RMB 132 million), communications (-RMB 130 million), cultural media (-RMB 125 million), automobile (-RMB 105 million).
11:20 This week, phenomena of turning crises into safety multiple times appeared, whether it was Monday breaking the 5-day line upon opening, the next day's index closing between the 5-day and 10-day lines, or Wednesday opening near the 10-day line. In fact, while the market seems to be rising slowly, a large drop becomes more difficult.
11:38 In the morning session, both markets overall showed a high-open-low-walk trend. After the opening, travel, lithium batteries, and other small-cap stocks were briefly active. Around 10:10 AM, various sectors began accelerating downward, with the index oscillating downward. The Shanghai Composite Index broke the 5-day line and found strong support near the 10-day line, stabilizing somewhat. Approaching noon, brokerages, banks, and oil sectors lifted the index together, reducing losses. Travel, insurance, and other few sectors remained red, with insurance, banks, brokerages, and oil sectors relatively strong, providing some support. Small-cap stocks fell generally, and the two markets' trading volumes were significantly smaller than yesterday. Morning live broadcast ends here, see you this afternoon.
13:10 Under favorable conditions, the index high-opened and low-walked, showing signs of major force distributing at high positions. The index broke the support of the lower rail of the wedge, showing technical breakage signs. The market lacks mainstream hotspots, with the number of green stocks increasing dramatically. Bullish momentum shows weakening signs. Investors can pay attention to the gains and losses at 2350 points. Once effectively broken, short-term risks need to be guarded against. Falling down is an opportunity to position, no need to overly worry about the market.
13:20 For today's highlights, the lithium battery sector surged sharply in the morning, related to the recent recovery in lithium carbonate prices. The travel sector also performed well. Market hotspots are continuously switching and rotating. Pay attention to technology stocks when buying low.
13:33 Observing the index movement, both markets stabilized at the ten-day moving average. The Small and Medium Enterprise Board and Growth Enterprise Market indices are experiencing their first pullback after continuous pushes recently. The expected fall space is limited.
13:40 The color metal and coal sectors accelerated upward attacks, with both market indices reversing to red. The travel, insurance, and brokerage sectors led in gains, while power, Internet of Things, and environmental protection sectors fell.
13:51 Multiple locations initiated water price adjustments, appropriately paying attention to related stocks like 000598 Xingrong Investment.
14:00 From a weekly line perspective, if it doesn't fall today, the index will show five consecutive weekly gains, a rather rare strong trend in stock market history. This strength indicates that this rebound is clearly different from each previous rebound of about 200 points since the fall from 3067 points, with ample momentum, also showing that the possibility of a large pullback in the short term is small.
14:12 Fund flow data shows six sectors with over RMB 100 million in net inflows: brewing (RMB 374 million), banking (RMB 362 million), brokerage (RMB 258 million), travel hotels (RMB 176 million), transportation equipment (RMB 130 million), insurance (RMB 110 million).
14:25 Volume shrank significantly, lacking upward momentum. Handle individual stocks differently.
14:36 Both market indices consolidated, with the Shanghai Composite Index returning above the 5-day line. The travel, insurance, and brokerage sectors led in gains, while the Internet of Things, agriculture, forestry, animal husbandry, fishery, and power sectors fell.
14:48 Since the rebound from 2132 points, it has lasted for over a month. Generally, the bottom will experience a deeper retracement, followed by a process of raising lows sequentially. Currently, the market lacks sufficient momentum to continue attacking, and a retracement will appear. The pullback is an opportunity to select individual stocks and position low, preparing for the next wave of ascent.
14:58 Stock selection ideas can focus on those with good annual report performance, strong theme stimulation, explosive technical patterns, and historically active stock characteristics. Such stocks have greater potential to stand out later.
15:08 In the afternoon session, the index accelerated upward under the rotation pulling of banking, real estate, oil, and other weight sectors, successfully turning red. Subsequently, the index narrowly fluctuated near the daily moving average until the close. Insurance, banking, and brokerage sectors became the main forces supporting the market, while most small-cap stocks fell. Internet of Things, education media, and other theme stocks continued to adjust and fell. The two markets' trading volumes were smaller than yesterday. Today's live broadcast ends here, see you next week.