Since 2022, the differentiation of A-share market has reappeared. Growth stocks represented by the new energy industry chain performed prominently in 2021, but there has been a significant adjustment this year; Hot sectors such as medicine, food and beverage also saw a sharp correction. At the same time, the large financial sector, real estate, household appliances and other industrial chains and infrastructure sector rose significantly. For the “rising again” value blue chips and growth stocks facing a large correction, institutions generally believe that the “steady growth” style may continue under the strengthening of policies, but after substantial adjustment, the subsequent market style is still possible to switch to growth.
A-share structural market highlights
On February 14, the three major indexes fluctuated lower. As of the closing of the day, the Shanghai composite index reported 3428.88 points, down 0.98% on the day; Shenzhen composite index reported 13123.21 points, down 0.77% on the same day; The gem index was reported at 2732.01 points, down 0.52% on the same day. In terms of industry, the differences between sectors have eased, with scenic spots, tourism and hotels leading the increase, while securities companies, real estate, banks and other sectors leading the decline.
Since the Spring Festival of the year of the tiger, the differentiation trend of the A-share market is still significant. There is a difference between the Shanghai stock index representing value and the gem index representing growth. According to the data, as of the closing on February 14, the rise and fall of the three indexes since February 7 were 2.01%, – 1.54% and – 6.08% respectively, while they fell by 5.79%, 11.67% and 17.78% respectively during the year. The Shanghai 50 index, dominated by blue chips, has risen 1.64% since the Spring Festival. The same difference has also occurred in the north capital. Since February, the north capital has accumulated a net purchase of 6.956 billion yuan, including 15.984 billion yuan in the Shanghai Stock connect and 9.028 billion yuan in the Shenzhen Stock connect.
From the perspective of the industry, although there was a correction on the 14th, the performance of the large financial sector represented by banks, as well as infrastructure sectors such as coal, steel, oil, nonferrous metals and architectural decoration, has remained stronger than the market since the Spring Festival, while the power equipment, electronics, medicine and biology sectors with the highest growth in 2021 led the decline.
Another feature of the market is that many large market capitalization institutional heavy warehouse stocks have significantly callback, and some market capitalization has been at a low level in recent three years. According to statistics, among the top 10 stocks in the market value of institutional positions in the fourth quarter of last year, Contemporary Amperex Technology Co.Limited(300750) , Wuxi Apptec Co.Ltd(603259) , China stock market news, Luxshare Precision Industry Co.Ltd(002475) has fallen by more than 10% since the Spring Festival, Longi Green Energy Technology Co.Ltd(601012) , Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) has fallen by more than 5%, Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) has fallen slightly, while Luzhou Laojiao Co.Ltd(000568) , China Merchants Bank Co.Ltd(600036) has maintained its rise.
market debate “value” and “growth”
In the face of the current dramatically changing market style, many institutions continue to be optimistic about the investment value of “steady growth” related fields.
“After the festival, undervalued blue chips were sought after by funds, while some growth stocks fell sharply. This is because growth stocks rose sharply in the early stage. Undervalued blue chips such as banks and real estate have been silent for many years and seriously lagged behind these growth stocks.” Yang Delong, chief economist of Qianhai open source fund, said that since the current policy objectives focus on steady growth, relevant departments have also issued a series of measures. This year, infrastructure investment will further accelerate, which will be beneficial to relevant sectors.
China International Capital Corporation Limited(601995) believes 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 the 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, which restricts the performance of the global overvalued growth sector. The manufacturing growth sectors with a large increase 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.
Zheshang Securities Co.Ltd(601878) said that, on the one hand, as the Fed enters the interest rate hike cycle, the overall trend of US bond yield will be different from that from 2019 to 2021. From the perspective of trend correlation in recent years, there is a strong correlation between the growth sector represented by gem and the trend of US bond yield, and the initial interest rate hike may disturb interest rate sensitive assets such as growth stocks. On the other hand, compared with 2019-2021, the intensity and time of steady growth in 2022 are expected to increase.
China Merchants Securities Co.Ltd(600999) also proposed that 2022 is a great year of steady growth. At present, the growth rate of new social finance has become positive and will continue to rise. The focus in the future lies in the rhythm of the implementation of steady growth policies. Once there is a clear steady growth action, the market may deduce to the stage of steady growth. Typical Pro cyclical undervalued industries such as coal, non-ferrous metals, banking and non-bank perform better, and the market style is dominant.
However, some insiders remind that the industrial logic and performance advantages of growth stocks are still there. With the steady growth sector entering the cashing period, the subsequent market style may gradually switch back to growth.
Huatai Securities Co.Ltd(601688) believes that since the fourth quarter of last year, the growth style represented by new energy has continued to callback, and the marginal change of overseas liquidity expectation and the increasing pressure on steady growth are the background. However, considering the necessary conditions for the establishment of the new style – industrial logic scissors difference and performance scissors difference, the conditions similar to the absolute dominance of value stocks in 2012 or 2016-2017 are not yet available, The industrial logic and performance advantages of growth stocks are stronger than those in the above stages.
Bohai Securities reminded that in the medium term, after steady growth gradually enters the performance verification stage, it will usher in the exchange and collection stage, and the adjusted growth sector will gradually have participation value. For the steady growth sector with large short-term cumulative increase, it is not suitable to follow up. However, considering that the social and financial structure still needs to be optimized, the steady growth policy will still work, so the steady growth sector can still play a game if there is a correction.
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