RMB Depreciation Can Enhance Competitiveness Of Textile And Apparel In The Short Run

Photovoltaic: asymmetric price reduction to promote balanced development

China's subsidy for new photovoltaic power stations has been suspended for more than 2 years, which has generated tremendous pressure on the cash flow of photovoltaic power station operators. The renewable energy surcharge has been increased by 0.7 points / degree. The annual increase in fund income can support the demand for new 50GW installed capacity. It is expected to play a huge positive role in restoring the default subsidy and improving the timeliness of subsidies in the future.

We continue to be relatively optimistic about the high manufacturing environment.

The partial growth of the technological line change (single crystal proportional upgrading) has been highlighted. The key points are the cost advantages, the fast and efficient industrial chain's single crystal leader: Longji shares.

For the power station enterprises, we believe that the finalization of the tariff reduction scheme can be seen to a certain extent as a negative result in the short term. The subsequent renewable energy surcharges will increase and some potential improvement measures (such as the quota policy) are introduced.

RMB depreciation will enhance competitiveness in the short run

After RMB joined the SDR, the market's expectation of RMB depreciation increased significantly.

We believe that the depreciation of the RMB will enhance the export competitiveness of textile and garment products and improve export orders.

Historically, however, the appreciation of RMB has limited impact on the long-term profitability of textile enterprises.

The increase in exports over the past few years is more about the overall cost advantage. Similarly, the impact of devaluation will be limited.

We judge that the 4 quarter of this year and the second half of next year will be a window of time for concern. On the one hand, it is a rebound in low base performance, and the two is in the context of supply side reform and consumption downturn.

Textile orders are further concentrated on leading enterprises.

Investment recommendations: recommend the listed companies in the export accounted for a high proportion of enterprises: Dayang creation, urge shares, Luen Fat shares, Lu Tai, Baron East.

Recommend leading enterprises with stable historical gross margins: Lutai A and lufa share.

Nuclear power: four nuclear power units approved, nuclear power entered large-scale construction period

On December 16th, Premier Li Keqiang chaired a State Council executive meeting. The meeting decided to approve the "No. 1" three generation nuclear power technology demonstration unit and the Jiangsu Lianyungang Tianwan nuclear power plant extension project, which has been included in the relevant national planning and construction conditions of the Jinsha River, the East Guangxi Hydropower Station and the Fangchenggang red sand nuclear power plant phase two of the project in Hualong.

We believe that China's nuclear power is off the shadow of Fukushima and has entered a large-scale approval period.

"Hualong No. 1" is expected to become the main force of domestic construction and export.

The development of nuclear power has been supported by the government. The CAP1400 demonstration reactor will be approved in the future.