introduction to this report
there is no need to be pessimistic about the short-term weak consolidation of the market. In March, with the upward repair of positive factors, the market will gradually recover. At present, the anchor of risk preference lies in local bonds and real estate. The direction of both is determined, but the slope still needs to be continuously observed, which also determines the space for market recovery. Structurally, we should make efforts along the undervalued value and value, and grasp consumption and infrastructure.
summary
general trend study and judgment: wait for March in spring. the market fluctuated upward this week, and the Shanghai Composite Index rose 3.02% and returned to 3450 points. We believe that in the short term, the market is still dominated by weak consolidation in the process of digesting negative factors, but there is no need to be pessimistic. In March, with the upward repair of positive factors, the market will gradually recover. 1) the negative impact of overseas liquidity still needs to be digested. in January, the US CPI climbed to 7.5% year-on-year, a 40 year high. The 50bp interest rate increase in March is expected to be further strengthened, and the US bond interest rate stands at the 2% mark. In the short term, the US inflation level is expected to rise in February, and the Chinese market still needs to continue to absorb the negative impact of the rapid fluctuation of overseas interest rate hike expectations. But looking further back, with the weakening of US economic data and the peaking of inflation, the expectation of interest rate increase is expected to peak in the first quarter. At the same time, the FOMC meeting in March will also reduce the uncertainty of liquidity expectation periodically, and the negative impact of overseas liquidity expectation in March will accelerate and weaken. 2) focus on the two anchors of risk appetite, and the positive factors will be gradually revised. under the current steady growth, the infrastructure strength or local debt problem and the recovery of real estate, as the core leading of the wide credit slope in the future, will become two important anchors of market risk appetite. At present, although the structural problems still exist in the social finance data in January, the total amount exceeds the expectation, which has shown a positive signal, and the wide credit is on the way. In the future, with the approach of the national two sessions in March, the steady growth policy will be accelerated, and the infrastructure and real estate are expected to be gradually repaired. On the whole, there is no need to be pessimistic about the short-term weak consolidation of the market. In March, with the upward repair of positive factors, the market will gradually warm up and actively increase positions in the beginning of the year.
focus on the two anchors of risk appetite. the current market risk appetite index has declined rapidly, indicating that the bottom of the market is gradually clear. So is the market risk appetite expected to improve in the next stage, and what is the time and space for the rise? We believe that the core link point of current risk preference is the rhythm of wide credit in the future, and local bonds and real estate, as the leading factors of wide credit, will become an important observation anchor point of risk preference. Looking back, under the demand of stable growth, the upward repair direction of the anchor of risk preference is determined, but the slope still needs to be continuously observed, which also determines the space for market recovery. 1) determination of anchor repair direction of risk preference. on the one hand, under the strong demand for steady growth, infrastructure will be an important starting point. On the other hand, the recent introduction of national measures for the supervision of commercial housing pre-sale funds has ensured the flexibility of the use of commercial housing pre-sale funds and will become a catalyst for the expected improvement of real estate . 2) However, under the tone of curbing new local implicit debt, the credit expansion of local governments is limited, and the upward revision slope still needs to be continuously observed. from the disclosed work plans of the local government supervision bureaus of the Ministry of Finance for 2022, the monitoring, prevention and resolution of hidden debt risk is still the core.
structural configuration: force along the undervalued value and value style. at present, there are two new ways in front of investors. On the one hand, the cost performance of track companies has gradually increased after continuous adjustment. On the other hand, under the warming expectation of steady growth, the allocation value in the direction of undervalued value such as consumption and infrastructure has increased. From the perspective of DDM, the current mid-term inflection point of liquidity expectation at the denominator end has emerged, which makes the valuation end do not have the basis for comprehensive rise, and it is difficult for us to earn the excess return brought by the denominator end. In the next stage, the core of the excess return of the market will come from the marginal change at the molecular end. At this time, we should focus on the direction of early profit damage and valuation repair power. The positive feedback mechanism of fundamentals will further determine the slope of valuation repair, especially the direction of profit reversal or marginal improvement. At present, the undervalued sector with consumption and infrastructure chain as the core has the above advantages. In the future, the market will still flow to a lower level and accelerate the switching to the undervalued style. In addition, in the dimension of value growth, under the current low market risk preference and high uncertainty of the economic environment, value will still dominate at this stage, and the opportunity to grow, especially track companies, still needs to wait for the recovery of risk preference.
industry :1) consumption: live pigs, household appliances, furniture and social service, tourism, Baijiu; 2) Capital construction: building materials, construction and power operation; 3) Finance: securities companies and banks; 4) Consumer electronics.
1
wait for March
general trend study and judgment: wait for March in spring. the market fluctuated upward this week, and the Shanghai Composite Index rose 3.02% and returned to 3450 points. We believe that we will gradually digest the negative factors in the market in March, but we don’t have to adjust the negative factors in the short-term market. 1) the negative impact of overseas liquidity still needs to be digested. in January, the US CPI climbed to 7.5% year-on-year, a 40 year high. The 50bp interest rate increase in March is expected to be further strengthened, and the US bond interest rate stands at the 2% mark. In the short term, the US inflation level is expected to rise in February, and the Chinese market still needs to continue to absorb the negative impact of the rapid fluctuation of overseas interest rate hike expectations. But looking further back, with the weakening of US economic data and the peaking of inflation, the expectation of interest rate increase is expected to peak in the first quarter. At the same time, the FOMC meeting in March will also reduce the uncertainty of liquidity expectation periodically, and the negative impact of overseas liquidity expectation in March will accelerate and weaken. 2) focus on the two anchors of risk appetite, and the positive factors will be gradually revised. under the current steady growth, the infrastructure strength or local debt problem and the recovery of real estate, as the core leadership of broad credit in the future, will become two important anchors of market risk appetite. At present, although the structural problems still exist in the social finance data in January, the total amount exceeds the expectation, which has shown a positive signal, and the wide credit is on the way. In the future, with the approach of the national two sessions in March, the steady growth policy will be accelerated, and the infrastructure and real estate are expected to be gradually repaired. On the whole, there is no need to be pessimistic about the short-term weak consolidation of the market. In March, with the upward repair of positive factors, the market will gradually recover.
2
focus on the two anchors of risk appetite
focus on the two anchors of risk appetite. the current market risk appetite index has declined rapidly, indicating that the bottom of the market is gradually clear. So is the market risk appetite expected to improve in the next stage, and what is the time and space for the rise? We believe that the core link point of current risk preference is the rhythm of wide credit in the future, and local bonds and real estate, as the leading factors of wide credit, will become an important observation anchor point of risk preference.
1) at present, the total amount of credit data in January has gradually improved, and the structure still reflects the great pressure of steady growth. the total data of social finance and credit in January 2022 were significantly higher than expected, with an increase of 984.2 billion yuan and 394.4 billion yuan respectively year-on-year. The growth rate of social finance accelerated by 0.2 percentage points to 10.5%. However, from the perspective of structure, it still reflects the great pressure of steady growth. 2) looking back, under the demand of stable growth, the upward repair direction of the anchor of risk preference is determined, but the slope still needs to be continuously observed. on the one hand, under the strong demand for steady growth, infrastructure will be an important starting point. On the other hand, the recent introduction of national measures for the supervision of commercial housing pre-sale funds ensures the flexibility of the use of commercial housing pre-sale funds and will become a catalyst for the expected improvement of real estate. On the whole, the anchor repair direction of risk preference is determined. However, under the basic tone of curbing the new local implicit debt, the credit expansion of local governments is limited, and the upper repair space still needs to be continuously observed. In 2021, the central economic work conference proposed to “resolutely curb the new implicit debt of local governments”, and the national financial work conference subsequently proposed to “seriously hold accountable those who have false chemical debt and new implicit debt, and improve the long-term mechanism for preventing and resolving implicit debt”. In addition, it can also be found from the disclosed work plans of the local government supervision bureaus of the Ministry of Finance for 2022 that the monitoring, prevention and resolution of implicit debt risk is still the core. On the whole, the anchor of the current risk appetite is the local debt and real estate issues. The upward revision direction of the two is determined, but the slope still needs to be continuously observed, which also determines the space for market recovery.
3
force along undervalued value and value style
structural configuration: force along the undervalued value and value style. return to the starting point. At present, there are two ways in front of investors. On the one hand, after continuous adjustment, the cost performance of track companies has gradually increased. On the other hand, with the expected warming of steady growth, the allocation value of consumption, infrastructure and other undervalued directions has increased. From the perspective of DDM, the current liquidity expectation at the denominator end has reached a medium-term inflection point, which makes the valuation end do not have the basis for comprehensive rise, and it is difficult for us to earn the excess return brought by the denominator end. In the next stage, the core of the excess return of the market will come from the marginal change at the molecular end. At this time, we should focus on the direction of early profit damage and valuation repair power. The positive feedback mechanism of fundamentals will further determine the slope of valuation repair, especially the direction of profit reversal or marginal improvement. At present, the undervalued sector with consumption and infrastructure chain as the core has the above advantages. In the future, the market will still flow to a lower level, and the style will accelerate the switching to undervalued style. Under the uncertain growth environment, the company’s risk preference and value preference will still be low, especially in the current stage of market growth.
4
industry configuration: grasp consumption and infrastructure
industry configuration: grasp consumption and infrastructure. According to the order of growth and the marginal improvement of profitability, industry configuration recommends: 1) consumption: accelerate the expected bottom, recommend the direction of Wens Foodstuff Group Co.Ltd(300498) (pig), household appliances, furniture, social service / tourism, Baijiu and so on, with supporting performance and negative expectation. 2) Infrastructure: improve infrastructure investment, help “revitalize infrastructure” exceed expectations in the future, and recommend building materials, construction, power operation and other directions; 3) Finance: securities companies ( Citic Securities Company Limited(600030) ), banks ( Bank Of Ningbo Co.Ltd(002142) ); 4) Consumer electronics ( Luxshare Precision Industry Co.Ltd(002475) / Goertek Inc(002241) ).
5
five dimensional data panorama
