Agricultural breeding stocks get a policy boost, sector performance draws attention
The State Council convened an executive meeting and decided to improve the compensation mechanism for universal broadband and telecommunications services in rural and remote areas to narrow the urban-rural digital divide; deployed accelerated development of rural e-commerce to boost consumption and benefit people's livelihoods by strengthening new business forms; and determined measures to promote the development of the express delivery industry, cultivating new growth points for the modern service industry.
The meeting stated: strive to achieve broadband access in about 50,000 administrative villages that previously had no broadband access and broadband upgrades for more than 30 million rural households by 2020, so that broadband covers 98% of administrative villages, and gradually achieve wireless broadband coverage, with total investment expected to exceed 140 billion yuan.
Rural e-commerce stocks rebound first
Institutions generally believe that the above information will form an important positive boost for A-share rural e-commerce concept stocks. From September to October, the rural e-commerce concept had already taken the lead in starting up in the A-share market, and many individual stocks rebounded by more than 20% from their September lows. For example, Dabeinong rebounded 32%, and the sector's overall upward trend was obvious.
Comparing with the earlier trend trajectory, three types of stocks are likely to be boosted by favorable policies.
The first are leading stocks in the agricultural sector, such as Dabeinong and New Hope, which represent the policy trend of the agricultural sector. The former invested in internet finance projects, invested in Tianchuang Cloud Credit Reporting, and improved the three core internet business platforms of Smart Dabeinong: "data + e-commerce + finance"; the latter established a breeding cloud service platform, which is the carrier of the company's Fuda Plan innovative business and the entry point for mobile internet traffic.
Performance in the agricultural sector is mixed
The second are small and medium-sized agricultural listed companies with distinctive innovative industries. For example, Batian signed a strategic cooperation agreement with DJI, reaching intentions on establishing a UAV agricultural application service system and related matters; the "UAV" service system is an innovative business and has the possibility of leading industrial reform.
The last category is agricultural service production and sales companies, mostly pesticide and fertilizer production and sales enterprises or breeding enterprises. Such enterprises have already established complete sales networks nationwide, making it relatively easy to grow bigger and stronger through "e-commerce" platforms with twice the result for half the effort. Typical representatives include Noposion and Dahuanong.
However, because performance in the agricultural sector is mixed and various concepts have been repeatedly speculated on many times this year, some industry insiders believe that individual stocks in this sector are more suitable for short-term investment, while value investment should be cautious.