The Central Bank raises interest rates: it has a greater impact on the automotive industry

For listed companies, the impact of raising interest rates is mainly reflected in three aspects: 1. The most direct impact is to increase corporate capital costs and increase the expenditure of interest and other financial expenses, especially for capital-intensive industries or companies with high asset-liability ratios; 2. It has a certain impact on business income and costs, or demand of certain industries, such as banking, real estate, automobile, machinery and equipment for financial leasing, etc., and affects downstream related industries; 3. Increase in interest rates leads to an increase in the required rate of return on investment funds. It also reduces the valuation of enterprises, and at the same time it also affects the allocation of investors' assets. The return of bank deposits may increase, which has an adverse effect on the stock market.

In comparison, interest rate hikes have a greater negative impact on real estate and cyclical industries such as steel, building materials, non-ferrous metals, and construction machinery.

bank

The impact of raising interest rates on listed banks includes two aspects: First, the impact of widening the interest rate range. In the long run, the further expansion of the floating interest rate of loan interest and the allowable deposit interest rate to float will promote the market-oriented reform of China's banks and even the entire financial industry. However, in the short-term, the expansion of the interest rate fluctuation space will have little impact on the bank's recent performance.

Second, the impact of the increase in the benchmark interest rate: The increase in the benchmark interest rate will, on the one hand, help enhance the bank’s ability to absorb and store, improve the bank’s assets and liabilities structure, and may mean a modest relaxation in credit size control; on the other hand, banks’ deposit and loan business and long-term Treasury investment has a negative impact. In general, the impact of raising interest rates on listed banks is not significant.

car

The impact of raising interest rates on the auto industry should not be very dramatic. The current “weakness” in the automotive industry, especially the car industry, is the result of the restructuring of the market brought about by the continuous decline in the price after the rapid expansion of production capacity. Moreover, the overall listed company's debt level is significantly lower than the industry average of nearly 20 percentage points, and thus judged that the rate hike is not too great for the automotive sector.

coal

The coal industry is a capital and labor-intensive industry. With the substantial improvement in efficiency, the debt ratio has a downward trend. Interest rate hike has little effect on the short-term benefits of the coal industry. The production capacity of most coal enterprises has reached the limit, and it is necessary to invest new mines in the future. Increasing interest rates will increase the cost of new mining operations in the future.

The interest rate hike will have a greater negative impact on the real estate industry, and will in the first place bring uncertainties to the future price movement of coking coal. Unless the rate hike has led to a significant drop in electricity demand, thermal power is expected to be lagging behind, given the tight supply and demand of electricity and the large number of new units being put into production.

electricity

The power industry is capital intensive. Bank loans account for a relatively large proportion of assets. Some companies have high debt ratios. It is estimated that the interest expenses of major listed power companies account for an average of more than 10% of total profits. Huadian Energy, Tongbao Energy, Guodian Power, and Ze Power, Inner Mongolia Huadian and SDIC Power accounted for over 15% of the total. Under expected interest rate hikes, the performance of power companies will be affected. Based on the increase of long-term loan interest rate by 27 basis points, the total annual average profit of major companies decreased by 1.88%. The decline rate of the above-mentioned companies was relatively high, but the overall impact was not significant.

From another perspective, the rate hike forecast will undoubtedly have a significant effect on the investment of electricity. In particular, some of the investment projects of power investment entities that do not possess industry status and financial advantages will, in the event that the expected level of income declines, the lending banks will More attention to such projects.

Petrochemical

In addition to positive inflation on accounting performance, exchange rate appreciation, interest rate increases, and credit tightening will have a negative impact on industry performance. As far as the petroleum and petrochemical industry is concerned, the exchange rate appreciation> interest rate increase> credit crunch is in the order of the greatest to the smallest impact.

The direct reaction to interest rate increases is the increase in the cost of borrowing. If the interest rate increases by 1%, the share of interest expense in equity will increase by 1%, based on the industry's 50% asset-liability ratio. In terms of current profitability, the impact is small. Looking at the supply and demand situation in the oil and petrochemical industry during the year, the impact of price hikes on prices is slow and the margin is limited.

Securities

Directly speaking, raising interest rates will increase the financing costs of securities firms. Indirectly, although interest rate hikes will prompt companies to seek more direct financing, thus increasing the underwriting business volume of brokerage firms, raising interest rates will increase the financing costs of listed companies, which will directly lead to the brokerage, self-operating and other businesses of brokerage companies will continue to Shrinking.

Sub-sectors, rubber products industry, pesticides, inorganic products, chlor-alkali have a greater impact; and relatively weak profitability of chemical fertilizers, organic products and other sub-sectors are relatively small. The companies that have the greatest impact on raising interest rates are generally those with relatively high interest-bearing liabilities. At the same time, enterprises with low absolute net profits are in a state of low profit. Once interest rates are raised, they are likely to fall into the losing team. On the contrary, there are The companies with low interest-bearing balances and even no interest-bearing liabilities have little negative effect on interest rate hikes, and most companies have excellent performance.

mechanical

The overall impact of this rate hike on the machinery industry is limited. With respect to financial expenses, the average asset-liability ratio of the machinery industry is around 30-40%, and the proportion of financial expenses to net profit is very low, basically around 2-5%. Only Zhenhua Port Machinery currently has two indicators higher, but it will fall back to the average level after the increase. The slight increase in interest rates has a limited impact on the demand for construction machinery industry, and the impact on mortgage loans for construction vehicles is also small. At present, the major banks have just resumed business. Compared with raising interest rates, the impact of forcing banks to stop credit is much greater.