Core view
Core question 1: what impact may the new strain have on the market? At present, there is no clear conclusion on the impact of the latest covid-19 strain, and professionals are still needed to give further conclusions. However, for the Chinese market, the short-term impact rate of the epidemic is limited. In the several rounds of epidemic rebound since 2021, the impact on the Chinese market as a whole, style and structure is quite limited. However, in the medium term, we need to pay attention to the impact of the epidemic on overseas prevention and control policies. If the new strain leads to the tightening of overseas epidemic prevention policies, it may have a significant impact on China’s economy and market next year.
Core question 2: how will this year’s “cross year agitation” be interpreted? In recent years, most of the “spring agitation” started in December, which was called “cross year agitation” in advance. This year, we think it may be the same. On the one hand, the residual temperature of economy and profitability still exists, and the market fundamentals are still supported in the fourth quarter and the first quarter of next year. On the other hand, the policy has gradually turned positive in the near future, which may also become a catalyst for the industry.
Core question 3: which sectors should be laid out for “cross year agitation”? During the period of “spring agitation” in history, the steady growth plate has a strong performance as a whole. In recent years, the consumption sector has gradually become the main force of “spring agitation”. Considering the recent price increases of mass consumer goods, the overall improvement of the relative prosperity of the consumer industry in 2022 and the valuation adjustment of early consumption relative to the growth sector, we believe that this year’s consumption is expected to become the main force of “cross year agitation”. In addition, driven by policies, the steady growth sector also deserves attention.
Market view: grasp the two main lines of cross year agitation. This year’s “spring agitation” may be “cross year agitation” in advance, which may have a significant impact on the annual income, which is worth grasping. The investment direction concerns two main lines: the consumption line concerns the Baijiu medicine with definite higher level, and the consumption stimulus policies and consumer goods under the price increase. The main line of steady growth focuses on the themes of traditional infrastructure (machinery, building materials, construction), new infrastructure (wind power, photovoltaic) and Rural Revitalization.
Risk tip: the economic growth is less than expected, resulting in poor performance of a shares; The fluctuation of Sino US relations suppresses market risk preference; Covid-19 epidemic worsened significantly, and China Merchants Fund.
