Since the beginning of the year, the style of the A-share market has been significantly switched, the overvalued growth stocks have been significantly corrected, and the value style has continued to dominate. Among them, big finance, new and old infrastructure sectors showed an overall upward trend, while new energy, medicine and other track stocks fell into adjustment. In this regard, some brokerage research institutions believe that the market after the Spring Festival holiday has shown the style switching law of “value before growth” in history, and the growth track is expected to be repaired in the second quarter. At the same time, “steady growth” will still be the main line of the next stage.
A number of asset management institutions of securities companies believe that the undervalued A-share sector is expected to repair upward in 2022, and the market style may be relatively balanced. In the long run, the performance of the growth sector is also worthy of attention. Scientific and technological innovation and consumption upgrading are still the two most important driving forces of economic development. Industries with competitive advantages and in line with industrial trends are expected to develop in the long term.
size style or “time division” balanced development
Since January, the growth sector, small and medium cap stocks and cycle sectors have adjusted significantly, while the “steady growth” sector and financial stocks are relatively strong, and the protection of large cap heavyweights is obvious.
With regard to the specific reasons for the sector switching, China Merchants Securities Co.Ltd(600999) asset management believes that: on the one hand, the short-term market sentiment is poor, and the preference for the safety margin is relatively good for the over falling sectors and undervalued stocks in the early stage; On the other hand, the unexpected decline combined with a relatively loose liquidity environment has also brought corresponding opportunities to increase positions.
For the subsequent changes in the equity market, Guotai Junan Securities Co.Ltd(601211) asset management judges that with the gradual recovery of the economy, the market style may change from small to large. At present, the valuation differentiation degree of large and small styles has obviously converged, and it is near the historical center, which also indicates that the large and small styles may be relatively balanced in 2022. From the perspective of profit advantage, the advantage of small cap style is at a high level, but there has been a downward inflection point, and the advantage of small cap style may be weakened in 2022.
“Overall, this year will present a ‘balance’ over time.” Wang Delun, managing director and chief economist of Xingzheng asset management, said that the style of undervalued large cap value stocks deserves attention in the first half of the first quarter of this year; From the second half of the year to the whole year, the small and medium-sized market and growth style deserve attention, and may have a better performance.
In Wang Delun’s view, the “steady growth” policy is gradually implemented. Large cap stocks related to the main line of “steady growth”, including companies in finance, infrastructure and manufacturing industries, are prone to good performance in their orders and businesses. Therefore, the value style will dominate in stages. However, from the second half of the year, the currency liquidity may improve. After the negative impact of the Fed’s interest rate hike is digested, China’s liquidity is reasonably abundant, and the growth sector deserves attention.
Hu Hongwei, asset management and investment manager of Anxin, said that the height of the market in spring still depends on the strength of policies. Structurally, in the medium term, it is still optimistic about the opportunities for low-level, undervalued and small and medium-sized market value biased material sectors, but there are also periodic repair opportunities for new energy vehicles, military industry and other sectors with high short-term prosperity and oversold.
the growth track is expected to be repaired in the second quarter
China International Capital Corporation Limited(601995) it is expected that the current adjustment range of growth stocks has been large, but in the short term, under the background of the lack of “positive catalyst”, it may take time for investors’ risk appetite to recover, the “steady growth” policy is still in force, and the market focus may continue to focus on the relevant fields of “steady growth”. In addition, overseas markets are also responding to global monetary tightening, restricting the performance of the global overvalued growth sector. When China’s growth expectation gradually stabilizes and the response of overseas markets to monetary tightening reaches a certain degree, the market may gradually have the conditions to return to the growth style. It is preliminarily expected that the time point may be around the beginning of the second quarter.
Citic Securities Company Limited(600030) it is also predicted that the growth track is expected to usher in system repair in the second quarter. The transformation of the current market style from growth to value will take at least one quarter. In the second quarter, it is expected to pick up after the three conditions of the growth stock track are complete. These three conditions are: first, the scarcity of high growth track performance needs to be further verified in the disclosure period of the first quarterly report in April; Second, we need to wait for the determination of the specific rate increase range of the Federal Reserve in March and the subsequent statement; Third, we should observe the public offering position at the end of the first quarter, that is, after this round of “high cut low” conversion, whether the growth track has been fully adjusted and how the public offering allocation is.
China Securities Co.Ltd(601066) Chen Guo, chief strategist, believes that this year the market will usher in a year when fundamentals will go down first and then up, and the strength of “steady growth” will go from high to low. The fluctuation of policies and profit expectations may lead to wide fluctuations in the market. However, with the stabilization and recovery of the economy, the continuous improvement of the epidemic prevention and control situation and the inflow of incremental funds, A-Shares are expected to rise again. Throughout the year, it is expected to defend first and then attack. The opportunity in the second half of the year is better than that in the first half of the year.
scientific and technological innovation and consumption upgrading are still long-term driving forces
Changjiang Securities Company Limited(000783) asset management believes that scientific and technological innovation and consumption upgrading are still the two biggest driving forces for China’s economic development. The industry sector with competitive advantage and in line with the industrial trend is expected to develop in the long term. More energy should be devoted to the research and mining of excellent companies in line with the economic development trend and with core competitiveness, And strive to balance the company’s long-term development space with short-term valuation.
For future opportunities, Guotai Junan Securities Co.Ltd(601211) asset management said that from the perspective of economic cycle, 2022 may successively benefit the consumption and cycle industries, and the science and technology sector is expected to usher in better development throughout the year.
“Since the beginning of this year, the consumer sector has ushered in a long lost recovery trend. Optional consumption has a strong rebound momentum, and mass consumption is expected to accelerate the repair. In addition, manufacturing, infrastructure and real estate investment are also driven upward or upward. Although the peak kinetic energy of export-oriented industries has passed, it is expected to maintain positive growth this year.” The relevant person in charge of asset management and Investment Research Institute said.
China Merchants Securities Co.Ltd(600999) asset management suggests paying attention to three investment directions in terms of cost performance: first, benefiting from the expected “steady growth” of infrastructure, some industries in the real estate chain and new infrastructure directions, including communication, power equipment, computer and other industries; Second, small and medium-sized market leaders in manufacturing industry segments with bottom-up logic of sustained high growth in the future; The third is the affected sector of the epidemic. Among them, transportation, wine tourism, social service and other industries are expected to continue the repair trend as the epidemic prevention and control situation continues to improve. “In addition, the large financial sector with attractive valuation and limited downside risk can do some basic configuration.”
Changjiang Securities Company Limited(000783) asset management said that the performance of the annual report and the first quarterly report of Listed Companies in February has not been fulfilled. In the performance vacuum period, we can focus on the undervalued financial and real estate sectors, new energy infrastructure and information construction and other fields in line with industrial trends and long-term high-quality targets in the field of consumer medicine.
