Opinion | After the resumption of work and production, which industries will grow rapidly?

With the easing of the current round of the epidemic in Shanghai, the resumption of work and production is progressing in an orderly manner. Up to now, the resumption rate of more than 9,000 industrial enterprises in Shanghai has been close to 50%, and the overall resumption rate of more than 3,000 enterprises in the three batches of “white lists” has exceeded 70%, of which the resumption rate of the first batch of 666 enterprises has exceeded 95%; There are 847 foreign-funded enterprises, and the resumption rate has reached 80%.

Let’s look at the recovery of US stock companies after the epidemic. More than 75% of S&P 500 companies reported higher revenue than in 2019, and less than 20% reported lower revenue than before the pandemic. This shows that most companies have adapted to the changes in business conditions caused by the new crown.

There are 213 companies in the S&P 500 that have seen revenue decline in 2020 and then rise above 2019 levels in 2021. 153 companies surpassed their 2019 revenue in both 2020 and 2021. 101 companies have less than 2019 revenue in the last 2 years. 10 companies saw declines in 2021 after rising in 2020.

About a third of the S&P 500 has seen steady or rapid growth during the pandemic. Semiconductor, retail and pharmaceutical companies fared better compared to other industries. The semiconductor industry has grown by an average of 53% since the 2019 pandemic, the retail industry has grown by 31%, and the pharmaceutical industry has grown by 26%. In the retail industry, online retail growth is more prominent. For example, eBay’s revenue has increased by 192% since 2019, and Amazon’s revenue has increased by 78%.

Most companies in the S&P 500 experienced revenue declines in the first year of the pandemic, then rebounded to better pre-pandemic levels the following year. Such as Tesla, Twitter, etc. Therefore, the author believes that in the long run, there is no need to worry too much about the impact of the epidemic on the income of listed companies.

At present, the important industries of Shanghai’s total industrial output value are automobile manufacturing, computer, communication and electronic equipment manufacturing, chemical raw material and chemical product manufacturing, general equipment manufacturing, electrical machinery and equipment manufacturing. These industries have been hit by the impact of the epidemic since March, which also dragged down some domestic industrial production data.

At present, the resumption of work and production of white-listed enterprises in key areas is already in progress. The production teams, operation staff and key management personnel of the enterprises have returned to the factory, and the operating rate and capacity utilization rate have continued to rise. The government has opened “green channels” for the entire industrial chain, including integrated circuits, biomedicine, and automobile manufacturing.

On the other hand, consumption is expected to usher in a recovery in the second half of the year. 23 provinces, autonomous regions and municipalities across the country have issued more than 40 types of consumer coupons, with subsidies covering automobiles, home appliances, supermarkets and other fields. Fiscal stimulus has a strong boost to personal consumption expenditure, which will be quickly repaired after the impact on the growth rate of consumption expenditure in the short term.

The epidemic will eventually end. In the short term, it may affect the performance of some companies, but in the long run, most companies can rebound to a better level before the epidemic. Investors should not easily discard the relatively low chips in their hands.

This article is reprinted from: https://news.futunn.com/post/15995485?src=3&report_type=market&report_id=206896&futusource=news_headline_list
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