In 2021, the structural market of A-share market focuses on carbon neutralization and the price rise of industrial resource products, and the growth style is relatively dominant. Looking forward to 2022, the combination of economic balance repair + inflation risk mitigation + stable liquidity and marginal easing is relatively mild for the equity market, and the overall fluctuation of A-Shares is expected to be upward. It is suggested to grasp the three main lines of scientific and technological innovation, green upgrading and consumption repair, and pay attention to the diffusion of investment opportunities in the upstream and downstream links of relevant industrial chains.
Changes in the market environment: the real estate dilemma is the largest variable, and the first half of the year is the window period for the marginal loosening of monetary policy. First, economic growth will return to rebalancing from structural recovery. Structural support comes from the improvement of export toughness and consumption margin. The downturn of the real estate industry is the biggest variable impacting the economy. The current round of real estate bottoming recovery will be slower than 2014-2015. It is expected that the year-on-year growth rate of real estate development investment, commercial housing sales area and new construction area will turn negative next year, and the related upstream and downstream industrial chain, local fiscal revenue and physical credit expansion will be dragged down. Second, China's inflation risk tends to ease. It is expected that PPI will fall sharply next year and CPI will rise slowly. The constraints of high inflation on monetary policy and equity market will be weakened. Third, the liquidity environment focuses on the marginal easing of monetary policy and the change of credit expansion structure. Next year, China's monetary policy will maintain the overall sound tone. The first half of the year is a window period of marginal easing, and the interest rate center of 10Y treasury bonds is expected to move down marginally. Social finance is expected to stabilize and recover slowly, but the credit expansion is limited. Structural support for entity transformation and upgrading will be increased. First, support the development of carbon neutral industries, including the green upgrading of old and new industries; Second, promote the capital market to become the hub of scientific and technological innovation, and there is great room for improvement in direct financing.
Industrial logic change: common prosperity + carbon neutralization, reshaping the medium and long-term industrial development pattern. Focusing on the long-term goal of 2035, "per capita GDP reaches the level of moderately developed countries", common prosperity and carbon neutrality will be the long-term main line of reshaping the industrial pattern in the future. On the one hand, pay attention to the three major directions of industrial upgrading: first, in the field of scientific and technological innovation, policies encourage strengthening basic research and technological innovation, and vigorously develop high-end manufacturing and digital economy; Second, green transformation, new energy vehicles, new energy, energy storage, energy-saving equipment and materials and other industrial chains meet new growth points; The third is consumption upgrading. Focusing on meeting the needs of individuals for a better life, we pay attention to the increment of service consumption demand in the whole life cycle (fertility / Beauty / leisure / health / pension, etc.) and the upgrading demand of personalized and differentiated new consumption and quality consumption. On the other hand, some industries are facing regulatory reshaping, and the fields of education, real estate and Internet antitrust will usher in normal supervision.
Equity market outlook: the overall fluctuation is upward, and grasp the three main lines of innovation + Green + consumption in the medium term. We believe that A-Shares are expected to fluctuate upward in 2022, and the plate rotation is more frequent with the industrial boom and the relative strength of the valuation price. In terms of structure, it is suggested to grasp three main lines: first, innovation driven main line. High end manufacturing includes chips, innovative drugs, medical devices, new materials, national defense and military industry, etc. digital economy includes 5g and the construction of data center, cloud computing / artificial intelligence / Internet of things and other digital technology applications; Second, the main line of carbon neutralization, the diffusion of investment opportunities in upstream and downstream links of the industrial chain such as new energy vehicles, new energy, energy storage, energy conservation and environmental protection, and pay attention to preventing the risk of periodic overvaluation; Third, the improvement of consumption margin is the main line. The overestimation of food, beverage and beauty care sector is expected to ease, and the profit expectation of outdoor activities is expected to turn positive. However, the scope and pace of consumption improvement may be subject to twists and turns affected by the epidemic.
Risk tip: the real estate industry is down than expected; The epidemic spread exceeded expectations or the epidemic prevention and control was less than expected; The pace and effect of policy promotion are less than expected; Repeated Sino US friction risks.
