Core conclusions:
In the market, key tracks generally retreat in stages after the excess return rises for 2 years. The excess return of consumer track can continue to rise for 3-6 years, but there will also be a retreat of excess return for 1-1.5 years. After 2 years of excess return rise, the periodic growth track will generally retreat in about 2-3 years. In a certain stage of the traditional cycle & TMT track, the excess return rose sharply for 2 years, and then began to decline in a long-term trend.
In the medium and short cycle analysis of economy, capacity utilization is usually used as the core index to measure the relationship between supply and demand, and then predict the commodity price and the profitability of enterprises. There are two capacity expansion cycles after 2008. The first round is 2010-2011, and the second round is 2016-2018. The roe of non-financial listed companies declined significantly from 2011 to 2012 and from mid-2018 to mid-2020, indicating that with the expansion of supply, the profitability of enterprises began to deteriorate, which may lead to periodic adjustment of the high boom track.
Three types of track opportunities end: (1) for science and technology track, due to the long-term growth of demand, the supply impact is greater when the investment opportunity ends, and the rest of the track is often accompanied by a large release of production capacity. When the TMT track opportunity ends in 2015, there was also a situation that the valuation adjustment was ahead of the fundamentals.
(2) For the cycle track, the decline of demand and the expansion of supply may affect the end of track opportunities. The more growth oriented track has a greater impact on supply. The more traditional cycle oriented track has a greater impact on demand.
(3) For the consumer track, the deterioration of supply and demand at the same time may lead to the periodic rest of the track. Only when the demand drops significantly and the supply is at a high level, the joint action of the two may lead to the end of the track opportunity.
The focus of observation of three types of track in 2022: (1) the demand side of the science and technology sector is still strong. At present, the supply and demand has not reversed, but it will face the impact of supply in 2022. The capital expenditure of the electronics and new energy industry will rise rapidly in 2021. Although it has not yet been transmitted to the rapid recovery of the growth rate of fixed assets + projects under construction, it is likely to face a large amount of production capacity next year. (2) The supply of the cyclical sector may be released slightly, focusing on whether there is a significant decline in demand. The supply and demand pattern may become worse next year, but the current situation is better than that in 2011 (the supply side has tight production capacity, and the demand side has not started to decline due to the rise of prices). (3) the consumption sector is focused on whether the demand and supply are deteriorating at the same time. At present, the consumption sector may face certain demand shocks. But because the capacity of the consumption sector is relatively flexible according to the demand adjustment mechanism, on the other hand, it depends on whether the supply has expanded significantly or accumulated too high inventory. Baijiu supply is still relatively stable. , the overall risk is controllable, and there are opportunities next year.
Risk factors: the economic downturn exceeded expectations, and the tightening of regulatory policies exceeded expectations.
