A report released by the World Meteorological Organization in 2023 confirmed that the tropical Pacific region formed El Niño conditions for the first time in 7 years, and is expected to break the high temperature record set in 2016 within the next 5 years.
1. What is the “El Niño phenomenon”? What are the consequences?
The El Niño phenomenon is a natural phenomenon where seawater in the East Pacific heats abnormally every few years. Since 1951, there have been 21 El Niño events in the equatorial Middle East and Pacific, which have brought high temperatures, heatwaves, floods, and droughts to our country, along with reduced production of agricultural products.
Continued hot weather means a higher electricity consumption load, combined with the acceleration of the economic recovery process, or a large electricity gap; at the same time, agricultural product production cuts are expected, which may cause prices of related products such as sugar, cotton, palm oil, soybeans, corn, wheat, and rice to rise.
2. What are the investment opportunities?
Home appliance sector
According to the Ping An Securities Research Report, on the one hand, if the weather continues to be hot, the performance of some industries may be boosted. The typical example is home appliances.
Take the summer of 2017 as an example. At that time, retail sales of household appliances above the limit increased 13.3% year on year in June, driving the year-on-year growth rate of wholesale and retail sales above the limit reached 0.9% (previous value 0.8%); in June, the pharmaceutical manufacturing industry added 13.6%, with a previous value of 10.7%.
$HAIER SMARTHOME (06690.HK)$ (06690.HK), Skyworth Group (00751.HK), Hisense Home Appliances (00921.HK)
Electricity...