Review:
On January 3, “it’s the turn of big finance” stressed that the market’s expectation of steady growth is insufficient, and big finance is the winner and loser of 2022 investment.
January 9 “big finance is the current β》 Global liquidity inflection point, after the market has been greatly adjusted, there is style switching.
In January 16th, “retreat or attack to big finance” overestimated the value of the bubble, big finance seemed defensive, but actually the best offense.
January 23 “big finance is still calm” big finance deals with the “chaotic cloud crossing” overseas and waits for the “infinite scenery” to attack again.
In February 6th, “big finance continues to cut”, the US dollar debt upward high valuation “crowded the bubble”, cuts to the big finance (the bank, the real estate chain).
From financial data to economic data, steady growth is the main line, and large finance is added.
The market is in the bottom area and gradually breeds upward momentum and inflection point. The two sessions are about to be held. The main focus of current policies is to stabilize macroeconomic fundamentals during the window period of monetary easing and the period of policy overweight. There are four stages in the development of the “big finance” market. The verification of wide credit structure and economic fundamentals data reconfirm the “big finance” market and is expected to go to a higher level. In this process, it is another good opportunity for investors to add large finance (real estate chain and banks). Pay attention to the “four King Kong” in the bottom warehouse configuration represented by pigs, covid-19 oral drug chain, tourism hotel catering and airport.
Why “big finance”? Since the beginning of 2022, when the market generally expected the opportunities of “new energy” and “double carbon”, we published “it’s the turn of big finance” on January 3. The main logic is that the current main contradiction of the market, reviewing the economic fundamentals, and steady growth has become a topic of common concern. This topic is the direction of great differences among investors, large expectation difference, key policy support and continuous data verification. Looking back on the expected changes in stabilizing economic growth in the past, it generally follows four stages: expected fermentation, policy introduction, financial data verification and economic data confirmation. For this round, what stage has the “big finance” reached at this stage?
Stage 1: this round of steady growth. We can see that after the economic work conference is held at the end of 2021, “taking economic construction as the center”, it is expected to begin fermentation, and there will be phased opportunities in the main line of “steady growth”. However, due to data, expectations, micro research and other factors, the steady growth performance is relatively weak, and even the share prices of some companies return to the starting position.
Stage 2: the central government has successively introduced policies and measures from the national development and Reform Commission, the Ministry of finance, the central bank to the Ministry of industry and information technology. Stabilizing growth and macroeconomic stability in 2022 is not only an economic issue, but also a political issue. The substantial adjustment of the superimposed market itself brings the possibility of style switching. It’s our turn to big finance on January 3 and big finance on January 9 β》 These problems have been described one after another.
Stage 3: stabilize the macro-economy, money first, from broad money to broad credit, and big finance. The number of investors with gradually optimistic market expectations has increased, and the focus has gradually focused on substantive aspects such as monetary easing and credit and social finance data. Both the monetary easing before the Spring Festival and the Tianliang social finance after the festival have raised investors’ macroeconomic expectations. In many reports, such as “retreat or attack, rely on big finance” on January 16, “big finance is still calm” on January 23, and “Tianliang social finance accelerates the” big finance “market” on February 11, we explained that from wide currency to wide credit, financial data verification, and the market’s expectation of “big finance” is rising. Follow up and observe the further improvement and confirmation of financial data structure, and further pay attention to the substantive effect of credit easing measures.
Stage 4: stabilize the macro economy. After the currency comes first, the corresponding fiscal and policy measures will be gradually introduced, and the central and local governments will make concerted efforts. We mentioned in “big finance, continue to cut” on February 6 and “big finance is getting better” on February 13 that the national development and Reform Commission emphasized measures to boost bulk consumption such as automobiles and household appliances, the introduction of national measures for the supervision of real estate pre-sale funds, improving the flexibility of fund use, the rescue in Zhengzhou, Henan Province and the ten Hangzhou articles in Hangzhou, Zhejiang Province. After the gradual improvement of the broad credit structure, the “big finance” market needs to further verify and confirm the economic data. The transformation from expectation to fundamental data is an important starting point to further promote the market. High frequency economic data, economic data in January and February and economic data in the first quarter are important observation window periods.
What does “big finance” buy? Who can win in banking, infrastructure, real estate and consumption? Returning to the traditional macroeconomic framework system, we can see that stabilizing the macro economy plays a role and has high attention. Generally, infrastructure chain, real estate chain and consumption are considered. As a representative direction of big finance, banks are almost a must in every round of macroeconomic stability, wide currency and wide credit. Since the recommendation of “it’s the turn of big finance” on January 3, the absolute return of the banking sector has been 7%, and the relative return of Shanghai and Shenzhen 300 is close to 15%. For banks, we still continue to recommend. Of course, investors who want to participate in the “big finance” market are more concerned about what segments are worth paying attention to?
From the perspective of infrastructure chain, looking back on several rounds of infrastructure market in history, each time the relevant sectors of infrastructure performed well, and the economic investment in infrastructure stability can focus on a new field rather than point and scattered. High speed rail, one belt, one road in 10-11 years, and PPP in 16 years, we can see in retrospect. At present, we can see that local special bonds continue to support relevant projects with great efforts, but the characteristics of the projects are relatively divergent. In the follow-up, we can focus on whether there will be a focused direction of infrastructure projects, which may lead to a significant increase in project scale and project attention, so as to see a higher infrastructure growth rate and attract the attention of investors.
From the perspective of the real estate chain and the communication with investors, we have focused too much on the word “real estate does not stir fry”. Therefore, in the past few weeks, we have seen that when the central bank released the fourth quarter monetary policy implementation report and adhered to the “real estate does not stir fry”, the stock prices of companies related to the real estate chain have been corrected on the same day. For the investment in the real estate chain, we are clear that as an industry, the stage of high growth rate of real estate investment and sales may be farther and farther away from us. But in the past few years, under the background of “no speculation in real estate” and cash flow problems of some real estate enterprises, are we too pessimistic about real estate enterprises? In addition to “housing without speculation”, the real estate industry can also meet the basic rigid demand of Lbx Pharmacy Chain Joint Stock Company(603883) and achieve certain growth. In 2022, when we had expected the growth rate of the industry to decline by 20%, for example, but now it may only decline by 10% or 5%, or even achieve positive growth, should the valuation and performance originally given by the growth rate of – 20% be repaired and improved?
Over the past period of time, we have seen that such expected correction is taking place on both sides of the supply side and demand side of the real estate chain. On the supply side, we have seen the introduction of national measures for the supervision of real estate pre-sale funds, and the flexibility of fund use has been improved. On the demand side, we can see the relaxation of down payment ratio and provident fund loan limit in some places such as Guangxi, Guizhou and Sichuan. Last week, we saw that cities such as Heze in Shandong, Chongqing and Ganzhou in Jiangxi also joined the demand side relaxation team. The supply side is relaxed and the demand side is strengthening due to the city. The pessimistic expectation of real estate should be repaired and changed. Accordingly, the share prices of home appliances, household appliances and consumer building materials in real estate enterprises and real estate chains that benefit from the recovery of real estate should get corresponding performance.
Consumption accounts for more than half of our GDP, which is naturally indispensable for stabilizing the macro economy.
Due to the impact of the epidemic, in the past two years, service consumption, which is very important in consumption, has been one of the consumption categories seriously damaged. Back to the capital market, over the past two years, many investors have bought hotels, tourism, catering and airports for service consumption with the logic of weakening the epidemic and recovery of the service industry. Due to the repeated mutation of the virus and the sporadic outbreak in many regions of China, the profit-making effect of some investors is also difficult to achieve, and the investment participation of such companies has also become cautious. At present, the stock prices of hotels, tourism and airports that have been recommended as bottom warehouse configurations in the early stage are close to historical highs. In the short term, as Hong Kong, China and some parts of the territory are still affected by Omicron, it may affect investor sentiment again. In the future, we believe that the efforts to support the recovery of service enterprises are being gradually implemented from top to bottom. The fundamentals of service consumption are expected to be gradually improved. The combination of fundamentals and policies. In the process of short-term event adjustment, service consumption may be a good opportunity for investors to participate in additional allocation.
Recently, we have seen the intensive introduction of policies to support service consumption services. For example, at the central level, on February 18, 14 ministries and commissions issued the notice on several policies on promoting the recovery and development of difficult industries in the service industry for catering, retail, civil aviation, tourism and other service industries, and put forward relief and support measures. At the local level, ① Hangzhou, Zhejiang Province issued the “Hangzhou ten articles” to benefit enterprises and relieve them, and increased support for the retail catering industry. For all kinds of enterprises and individual businesses with monthly retail sales increment of 10 million yuan or more in 2022, 100000 yuan will be rewarded in a single month. For enterprises and individual businesses with meal income increment of more than 1 million yuan, 50000 yuan will be rewarded in a single month, and the cumulative upper limit of reward for single enterprises and individual businesses is 2 million yuan. ② Zhengzhou, Henan Province, continued to carry out Zhengzhou Consumption Promotion Month activities in key areas such as automobiles, department stores, catering, household appliances, home appliances and e-commerce; Continue to carry out the activity of “Henan people visiting Henan”, free tickets and preferential amount of tickets for class a scenic spots and key tourism enterprises in the city from February 16 to May 31, 2022, and expand the scope of ticket free activities in scenic spots.
Investment suggestion: big finance (real estate chain and bank) is in full swing, ushering in a good opportunity for additional allocation, and the consumption bottom warehouse is equipped with “four kings”: pig, covid-19 oral medicine chain, tourism hotel catering and airport.
First, the economic downward pressure and steady growth policy hedge, coupled with the marginal improvement of relevant policies for real estate enterprises. 1) The State Council encourages qualified areas to carry out the renewal of rural household appliances and implement subsidies for furniture and home decoration to the countryside. 2) national measures for the supervision of real estate pre-sale funds have been issued, and the flexibility of fund use has been improved. These steady growth policies are improving, as the city’s policy implementation is being strengthened and the demand side relaxation is being implemented. We can pay attention to state-owned and private enterprises of high-quality real estate. Those with strong alpha attribute in the real estate chain and C-end consumption attribute, such as home appliances, household appliances and consumer building materials, are expected to usher in the dual catalysis of valuation repair and performance growth.
Second, the credit data of January has been verified. The macro economy is picking up from the bottom, and the whole is still in the window period of monetary easing and credit easing. The recent risk appetite of the market is low, and the banking sector with low valuation, high dividend attribute and pro cyclical attribute is expected to be favored. At the same time, since 2016, the bank has continuously cleared the asset quality + made a large number of full provisions, with less bad book. In the future, the bank may have an upward roe, and the improvement of asset quality will contribute to the recovery of the valuation of the banking sector. We can focus on some urban commercial banks and agricultural commercial banks in Chengdu Chongqing economic circle and Yangtze River Delta economic circle, and large state-owned banks that underestimate the value of “stagflation”.
Third, the bottom warehouse is equipped with “four King Kong”: pay attention to pigs, covid-19 oral drug chain, tourism hotels, catering and airports.
Risk tip: the spread of the epidemic exceeded expectations and the tightening of the Federal Reserve exceeded expectations.
