We believe that the current adjustment range of growth stocks may have been large, but the adjustment of investors’ risk appetite under the background of the lack of short-term positive catalyst may take time. China’s steady growth is still in force, and the market focus may continue to be in the related fields of “steady growth”; In addition, overseas markets are also reflecting the impact of global monetary tightening, restricting the performance of the global overvalued growth sector. we judge that when China’s growth expectations gradually stabilize and the overseas market responds to monetary tightening to a certain extent, the market style may gradually meet the conditions for returning to the growth style. It is preliminarily estimated that the time point may be around the beginning of the second quarter, and the follow-up needs to be continuously updated according to the actual progress.
On the whole, we don’t think we need to be overly pessimistic about the Chinese market. historically, there have been more than expected credit and social finance increments under the background of relatively low market and low expectations. The cycle from two to three months has a positive impact on the market. If these indicators have a certain sustainability, it will be more obvious , The improvement of forward-looking indicators is conducive to the improvement of growth expectations. In terms of style, we believe that “steady growth” is still the main line of the future stage. The space for sharp decline in growth style may be relatively limited, but we may not be in a hurry to bottom.
Suggestions on industrial configuration: the steady growth style may continue, and the manufacturing growth is waiting for a turnaround
1) areas potentially supported by marginal policy changes or efforts, including infrastructure, industrial chains related to stable demand for real estate (building materials, construction, household appliances, home appliances, etc.), brokerage finance, etc;
2) for the middle and lower reaches consumption that has been adjusted in 2021, the valuation is not high, and the medium and long-term prospects are still clear, choose stocks from bottom to top, including household appliances, light industry and household appliances, automobiles and parts, the Internet, agriculture, forestry, animal husbandry and fishery, food and beverage, medicine, etc;
3) under the background of the positive progress of the epidemic, the aviation airport, catering tourism, offline entertainment and other sectors may receive phased attention;
4) the manufacturing growth sectors with large growth last year, including new energy vehicles, new energy and technology hardware semiconductors, have been adjusted, but it may not be the time to fully intervene.
market review : the broad-based index rebounded after the festival, and growth continued to callback
At the beginning of last week, the market rebounded under the background of the overall stable news of China during the Spring Festival holiday and the recovery of overseas markets. Subsequently, under the comprehensive influence of factors such as the continuous introduction of stable growth policy, the exceeding expectation of social finance and credit data and the improvement of overseas uncertainty, the Shanghai stock index rebounded by 3.0% in a single week, and the growth sector continued to callback. The average daily turnover of the two markets rebounded to about 0.92 trillion yuan compared with that before the festival. The net inflow of northward funds this week was 10.7 billion yuan, but the Shanghai and Shenzhen Stock links were also divided, with a net outflow of 6.6 billion yuan. In terms of style, the growth oriented gem index fell by 5.6% in a single week and reached a new low, while the value blue chip dominated CSI 300 and SSE 50 rose by 0.8% and 2.9% respectively. In terms of industry, the performance of the cyclical sector is stronger than that of the market, with coal, petroleum and petrochemical leading the increase; Consumer services benefiting from the expected improvement of the epidemic also performed well; Under the influence of internal and external factors, power equipment, new energy, medicine and electronics led the decline.
Market Outlook: policies are strengthened, and “steady growth” is still the main line of the stage
In the report “steady growth” will become the new market main line “on December 7, we proposed that” steady growth may become the main line in the next 3-6 months, and the growth style may be restrained “. In mid January and recently, we continuously prompted that” steady growth transactions continue, and the growth style is still not eager to copy the bottom “. This week, under the background that the financial data in January exceeded expectations and reflected the acceleration of steady growth, The market is still polarized and the growth sector continues to callback. The difference between the weekly rise and fall of the Shanghai index and the gem index is 8.6 percentage points. In addition to external factors such as the tightening of monetary policy of the Federal Reserve and the risk of US sanctions suppressing risk appetite, we believe that the large increase in the early stage, high valuation and expectation, not low position and the relative lack of upward catalyst in the short term may be the more important internal reasons for the adjustment of the growth sector. The four seasons report of public funds shows that the holdings of active partial equity funds are concentrated in some growth tracks, The recent position adjustment may form a certain negative feedback with the fluctuation of stock price. looking ahead, we believe that the current adjustment range of growth stocks may be large, but the adjustment of investors’ risk appetite may take time under the background of lack of short-term positive catalyst. China’s steady growth is still in force, and the market focus may continue to be in the related fields of “steady growth”; In addition, overseas markets are also reflecting the impact of global monetary tightening, restricting the performance of the global overvalued growth sector. We judge that when China’s growth expectation is gradually stabilized and the overseas market responds to monetary tightening to a certain extent, the market style may gradually meet the conditions for returning to the growth style. It is preliminarily estimated that the time point may be around the beginning of the second quarter, and the follow-up needs to be continuously updated according to the actual progress. on the whole, we don’t think we need to be overly pessimistic about the Chinese market. historically, there have been more than expected credit and social finance increments under the background of relatively low market and low expectations. The cycle from two to three months has a positive impact on the market. If these indicators have a certain sustainability, it will be more obvious , The improvement of forward-looking indicators is conducive to the improvement of growth expectations. We believe that the “policy bottom” of the Chinese market has been confirmed during the central economic work conference from September 30 to December last year. The “emotional bottom” may depend on the strength and rhythm of the steady growth policy in the middle of the first quarter, while the “growth bottom” is expected to appear from the first quarter to the second quarter. In terms of style, we believe that “steady growth” is still the main line of the future stage. The space for sharp decline in growth style may be relatively limited, but we may not be in a hurry to bottom. Recent progress in the following aspects should be noted:
1) financial data in January exceeded market expectations. it was announced this week that the new social finance in January was 6.17 trillion yuan, and the new RMB loans were 3.98 trillion yuan, an increase of 981.7 billion yuan and 400 billion yuan year-on-year, higher than market expectations. Among them, the new social finance was mainly driven by credit expansion and net issuance of government bonds. It is a relatively positive signal that the medium and long-term loans of enterprises have increased year-on-year under the background of downturn for several consecutive months. Although residents’ medium and long-term loans increased by about 200 billion yuan less year-on-year, and some investors believe that the structure is still weak, there are often similar characteristics in the early stage of policy development at the bottom of the cycle. We believe that the financial data in January is generally positive for the market.
2) the steady growth policy continues to be strengthened. the central bank’s monetary policy report for the fourth quarter was released, which was more positive than that in the third quarter, At the same time, the deletion of the expression “maintaining the continuity, consistency and stability of real estate financial policy” also means that there is more room for policy; In addition, this week, the central bank and the China Banking and Insurance Regulatory Commission issued the notice on the exclusion of affordable rental housing related loans from the concentration management of real estate loans to continue to increase support for the development of affordable rental housing; There are also new changes in the supervision of commercial housing pre-sale funds. The supervision amount, payment scope and withdrawal conditions of pre-sale funds are clarified. The remaining funds after the pre-sale funds reach the supervision amount can be withdrawn and used by real estate enterprises, which helps to prevent the liquidity risk of some real estate enterprises.
3) “East West” interconnection progress. the CSRC issued the regulations on the supervision of interconnected depositary receipts business of domestic and foreign stock exchanges, which mainly revised three aspects: first, expand the scope of application, include qualified listed companies of Shenzhen Stock Exchange in China, and expand overseas to Switzerland and Germany; Second, allow overseas basic securities issuers to raise funds and adopt market-oriented inquiry mechanism for pricing; Third, optimize continuous supervision arrangements. The improvement of the system is conducive to the continuous promotion of East-West connectivity.
4 ) progress of the epidemic: recently, the number of covid-19 cases worldwide has dropped significantly. According to media reports, as of this week, more than 10 European countries such as Britain, Sweden and Denmark have announced the end of the epidemic [1]; On February 11, the State Food and Drug Administration approved the import registration of Pfizer covid-19 virus treatment drug combination packaging, which may help to control the epidemic situation in China in the future, and pay attention to the expected impact on relevant sectors of offline activities.
5) overseas : in January, the US CPI exceeded expectations again by 7.5% year-on-year. Due to concerns about the accelerated tightening of monetary policy, the interest rate of 10-year US bonds rose rapidly and exceeded 2.05% for a time. Affected by this, the NASDAQ index fell 4.8% in two days; Affected by geopolitical and supply factors, crude oil rose sharply again and exceeded US $95 / barrel; This week, the Bureau of industry and security (BIS) of the U.S. Department of Commerce announced that 33 entities headquartered in China will be included in the “unverified list” [2].
industry suggestions : : “steady growth” style may continue, and manufacturing growth is waiting for a turnaround
specifically, at present, we should pay attention to four directions:
1) areas potentially supported by marginal policy changes or efforts, including infrastructure, industrial chains related to stable demand for real estate (building materials, construction, household appliances, home appliances, etc.), brokerage finance, etc;
2) for the middle and lower reaches consumption that has been adjusted in 2021, the valuation is not high, and the medium and long-term prospects are still clear, choose stocks from bottom to top, including household appliances, light industry and household appliances, automobiles and parts, the Internet, agriculture, forestry, animal husbandry and fishery, food and beverage, medicine, etc;
3) under the background of the positive progress of the epidemic, the aviation airport, catering tourism, offline entertainment and other sectors may receive phased attention;
4) the manufacturing growth sectors with large growth last year, including new energy vehicles, new energy and technology hardware semiconductors, have been adjusted, but it may not be the time to fully intervene.
recent concerns: 1) January economic data; 2) China’s steady growth policy; 3) Real estate credit events; 4) Epidemic situation outside China; 5) US monetary policy.
