Since February, the A-share market has been strong in Shanghai and weak in depth, and the market capacity is still dominated by the game of stock funds. Nevertheless, the enthusiasm of foreign investment research represented by QFII has gradually rebounded, and the varieties with good performance expectation in the annual report have attracted much attention.
Data show that since February, as of February 14, 17 companies have received QFII intensive research. Among them, Luxshare Precision Industry Co.Ltd(002475) , Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , Beijing Supermap Software Co.Ltd(300036) and other three companies were investigated by 7 or more QFII during the period, Lens Technology Co.Ltd(300433) , Huadong Medicine Co.Ltd(000963) , chuangyao technology, Guangdong Chj Industry Co.Ltd(002345) , Yusys Technologies Co.Ltd(300674) and other five companies were also investigated by 2 or more QFII during the period.
In this regard, Yang Delong, chief economist of Qianhai open source fund, who was interviewed by the reporter of Securities Daily, said that from the perspective of Chinese factors, the concern of economic slowdown has also affected investors’ long confidence. After the Spring Festival, the market trend in February has improved compared with that in January, and the current A-shares are still in a period of shock and repeated bottom grinding. In fact, the style of the market since this year is very obvious. The market of “performance is king” is one of the stock selection ideas that dominate the current market. For many funds, they may face the demand of changing positions and shares. The foreign capital represented by QFII has recently gathered intensive research varieties, and the current prosperity of the industry is high, especially the industry leading varieties whose annual report performance exceeds expectations are easier to attract the attention of funds.
In recent years, overseas institutions and individuals have continuously increased their positions in RMB assets, and the overall scale has been continuously improved. According to the situation of domestic RMB financial assets held by overseas institutions and individuals released by the central bank, at the end of 2019, overseas institutions and individuals held 2.10 trillion yuan of domestic stocks. By the end of 2020, the domestic stocks held by overseas institutions and individuals increased to 3.4065 trillion yuan, and then by the end of 2021, the domestic stocks held by overseas institutions and individuals continued to rise to 3.94 trillion yuan. This is the third consecutive year that foreign investors have increased their holdings of domestic stocks, confirming the strong attraction of A-Shares to foreign capital.
Wang Chunying, deputy director of the State Administration of foreign exchange, said recently that China’s financial market has been opened to the outside world, the attraction of RMB assets has increased, and foreign capital has increased the allocation of RMB assets, which has gradually become an important channel for cross-border capital inflow. There is still much room for foreign capital to allocate RMB assets in the future, because the correlation between RMB assets and asset prices and returns of developed and emerging economies is relatively low; The proportion of foreign capital in China’s stock market and bond market remains at the level of 3% to 5%, with great potential for improvement.
Good annual performance expectation is an important driving force for QFII’s frequent research since February. Statistics show that among the 17 companies surveyed by QFII, 12 companies have disclosed the annual performance forecast of 2021, and 8 companies are expected to be happy, accounting for nearly 70%. Among them, Landai Technology Group Corp.Ltd(002765) , Jiamei Food Packaging (Chuzhou) Co.Ltd(002969) , Guangdong Chj Industry Co.Ltd(002345) and other three companies are expected to have a year-on-year maximum change in net profit of more than 100% in 2021.
Recently, northbound funds have also arranged some QFII research varieties in advance. Statistics show that up to now, 13 stocks have been held by northbound funds, and four stocks such as Luxshare Precision Industry Co.Ltd(002475) , Chow Tai Seng Jewellery Company Limited(002867) , Syoung Group Co.Ltd(300740) , Universal Scientific Industrial(Shanghai)Co.Ltd(601231) have been favored by northbound funds since February. During this period, the number of increased holdings of northbound funds was 21578500 shares, 570300 shares, 298100 shares and 235000 shares respectively.
Institutions generally believe that foreign capital is known as smart capital. It has been influenced by value investment for a long time, the investment strategy is also very mature, and the influence of the A-share market is also increasing. Therefore, the subject matter and industry actively investigated by QFII will become the next wind vane of the market to a certain extent and attract the attention of all funds.
Chen Li, chief economist and director of the Research Institute of Chuancai securities, who was interviewed by the reporter of Securities Daily, said, “In recent years, the internationalization of China’s capital market has accelerated. Domestic and foreign markets have strengthened connectivity, expanded the channels for foreign capital to enter the A-share market, and helped foreign capital flow steadily into China’s capital market. Since February, QFII has carried out research around four major industries: electronics, computers, textiles and clothing, medicine and biology. Recently, it has been subject to the tightening of overseas liquidity and the continuous rise of the yield of 10-year US bonds The A-share market fell sharply and maintained a volatile trend. On the whole, the key research varieties of foreign capital have the characteristics of good performance growth, full adjustment of stock price and low valuation at this stage, avoiding the sectors with high valuation or large increase in the short term, and have certain allocation advantages. “
Liu Youhua, research director of private placement network, who holds the same view, told reporters, “QFII focuses on the following characteristics: first, the industry is in a high business cycle; second, the future performance of the industry is expected to be improved; third, the industry is in line with the future development trend. Driven by these characteristics, the future performance growth of these industries is very uncertain, so they have long-term investment value and have been focused by QFII 。 QFII has strong investment and research ability and high market recognition. Therefore, as an important pricing institution in the A-share market, QFII has gradually increased its influence on the A-share market. The key research varieties of QFII can often get more financial attention and follow, and become the wind vane of the market. Therefore, the next high probability performance will be strong in the big market. “
For the technology varieties represented by electronics and computers, Chen Li said, “Since the Fed’s monetary policy quickly turned eagle in December last year, market panic has spread, and the overvalued sector has continued to be under pressure due to the sharp rise in the yield of 10-year US bonds. After several corrections, the current valuation is relatively reasonable. Considering that the market has fully responded to the Fed’s interest rate hike, the industry may usher in a new round of rising space.”
\u3000\u3000 “From the perspective of the sector index, the sectors of electronics, computer, textile and clothing, medicine and biology are all at a low stage. With the improvement of the average performance of the industry, it is reasonable for these industries to enter the research library of overseas institutions. Taking the pharmaceutical and biological sector as an example, the sector index has all the way down to 11249 from the high of 18440 at the beginning of last year, down more than 40%. For these industries , the continuous downward valuation of A-Shares last year further strengthened the investment safety margin of these industries. With the superposition of factors such as the increase of international trade demand and the further optimization of the industry environment, these relatively undervalued sectors began to have better investment opportunities, which will naturally attract foreign investment and increase the attention of investment and research. ” Liu Yan, chairman of anjue assets, told reporters.
Table: list of companies surveyed by QFII since February
