Non-ferrous metal industry deleveraging is still on the way, high beta property continues, macroeconomic expectations and liquidity fluctuations on the plate still have a greater impact. Continue to recommend electrolytic aluminum, lithium resources and One Belt And One Road plate.
First, usher in the value of configuration
Non - ferrous metal plate deleveraging is still on the way, high beta continues. At the current point, the asset-liability ratio of listed companies in the nonferrous metal industry that have disclosed annual reports is 40.8% on average, down 2% from the end of 2015. From the point of view of balance sheet, the non-ferrous metal plate still has a high beta, macroeconomic expected fluctuations and credit expected fluctuations on the non-ferrous metal plate is still a large impact. We believe that listed companies that deleverage relatively quickly and achieve sustained profitability are expected to be the first to embrace allocation value.
Continue to recommend electrolytic aluminum plate. Base metals were mixed last week, with copper down 0.8%, aluminum up 1.5% and zinc up 1%. Maintain the short-term demand is not bad, medium and long-term raw material cost (mine grade and recoverable resources, coal, electricity, alumina, etc.) to push up the metal price judgment, thus the supply side reform is expected to be strong electrolytic aluminum plate, and copper plate in the reversal of concentrate supply and demand. To maintain overweight rating: cloud aluminum corporation (8.63 + 0.23%, buy), aluminum corporation of China (4.80 to 0.62%, buy), tongling nonferrous (2.82 + 0.36%, buy); Benefit target: luoyang molybdenum (4.25 + 0.47%, buy), zijin mining group (3.35 to 0.30%, buy), jiangxi copper (16.17 + 1.83%, buy), yunnan copper (12.71 + 1.60%, buy), etc.
Second, each sub-industry situation analysis
Lithium electricity raw materials: the upstream plate is still the most clear pattern of demand, the smallest supply elasticity. In the first half of the lithium concentrate supply and demand is still tight, lithium carbonate/lithium hydroxide prices remain high. Cobalt tetroxide demand good, cobalt prices will continue to rise. Rare earth blackening and storage are expected to gradually strengthen high-end permanent magnet prices. Overweight rating: sky LiYe (46.47 + 5.11%, buy), jiangxi feng LiYe (40.95 + 9.20%, buy), CST three-ring (13.40 to 1.18%, buy), is the sea magnets (10.28 to 1.34%, buy); Beneficiary: luoyang molybdenum industry, huayou cobalt industry (46.30 + 3.67%, buy).
One Belt And One Road theme: we believe that the implementation of One Belt And One Road strategy is expected to substantially promote the resource development and production capacity cooperation between Chinese enterprises and countries along the belt and road. Recommend zhongse shares (7.69 + 1.05%, buy), jin chengxin (17.89 + 0.06%, buy) (well mining leaders enjoy the recovery of the non-ferrous industry, the current price is close to the initial price and recent employee share price), xizang qomolangma (35.98 + 0.95%, buy), China mineral resources (23.99-1.07%, buy). Aviation and military materials theme: C919 obtained the flying license, the follow-up aviation materials domestic market prospects broad. Overweight rating: gangyan gaona (17.12-0.41%, buy), yinbang shares (8.19-0.49%, buy).