The tide is coming and going. The continuous monetary easing, profit recovery and commodity price rise after the epidemic will have an inflection point next year. However, unlike previous cycles, the tone of China’s Cross cycle policy has been established one step ahead. Under the distorted credit and inflation structure, A-Shares will usher in a half bull and half bear structure market in 2021; In the face of different “cycle turns”, how to grasp the market in 2022?
External environment: the periphery has changed from post epidemic normalization to interest rate increase cycle. In 2022, the restriction of the epidemic on economic activities is expected to decline, and the growth of core economies will continue to return to the center. The U.S. inventory structure will be gradually normalized. It is expected that the Federal Reserve will raise interest rates at least once throughout the year, and drive the world to usher in a liquidity inflection point. There is a certain upward risk in US bond interest rate, and the fluctuation of exchange rate and asset price in emerging markets may increase, but the pressure of capital outflow from China under the “safety cushion” is limited.
Internal environment: the credit cycle bottomed out and the economy moved forward in twists and turns. The macro core of 2021 is that the external exceeds expectations, the internal deleveraging is accompanied by the characteristics of stagflation. Under the drag of real estate investment, the Q4 economic growth rate will fall further. We believe that H1 next year will be an important window for steady growth. China’s real sector will return to leverage, and financial conditions will improve marginally. The growth rate of PPI will probably peak within this year, and CPI is expected to rise moderately next year. The convergence of cpi-ppi scissors and the mild recovery of consumption will accompany the whole year; In the second half of the year, the macro level was relatively flat, and we were vigilant against the disturbance of external adverse factors.
Stock market funds: the road of institutionalization goes deep. The pilot reform of real estate tax has been implemented, the trend of residents’ wealth entering the market has been strengthened, and the investment and research advantages of professional institutions have been highlighted, which is the main force draining residents’ wealth; Internationalization is expected to go further, and the logic of “water flowing to the bottom” of foreign capital remains unchanged; Public offering + private placement continued to lead the increment, and the proportion of long-term money such as insurance capital and wealth management increased. On the whole, the funds are expected to remain abundant next year. Market outlook: the cycle turns around, credit hits the bottom, value first and then growth. Under the tone of cross cycle adjustment, deleveraging of the physical sector has come to an end, and the credit conditions will be stabilized in a real sense around the end of the year.
The path of credit expansion may be different, but the trend is relatively certain. From the end of the year to Q1 next year, the market is still in a positive window. The rise and fall are of the same origin. If the credit and inflation structure is reversed next year, it will open the repair space for value stocks. Since the beginning of the year, institutional conglomerates have continued to kill the valuation, and now it has fallen back to 5 years; After nearly one year of digestion, the matching relationship between the valuation of traditional core assets and profits has been significantly repaired. According to the currency credit entity ternary framework, the value stocks are expected to return in the first half of next year, the financial sector is expected to repair the periodic valuation, and the consumption is more uncertain in the medium term; The macro level of H2 in 22 years is relatively flat, and growth stocks may rise again under the background of weak top-down driving force.
Industry comparison: industry allocation in 2022. (i) 22 year profit forecast: the growth rate of A-share performance will stabilize, the middle and lower reaches will gradually improve, the science and technology will maintain a high boom, and the big financial performance will maintain toughness. （2） Industry allocation idea: from top to bottom, the steady growth policy corresponds to credit stabilization (big finance) and financial development (new energy infrastructure); the convergence of ppi-cpi scissors difference points to the easing of manufacturing cost pressure in the midstream and the reversal of the fundamentals of downstream necessary consumption; the certainty of epidemic control increases, and the airport may usher in an expected inflection point; under the easing of Sino US trade relations, industries such as automobile and machinery benefit the most. In terms of industrial trend, “carbon neutrality” It is still the long-term main line; Common prosperity promotes the expansion of middle-income groups, and mass consumption is expected to benefit; Enhance the strategic position of “specialization and innovation”, and pay attention to the subdivided leaders in high-end manufacturing and other fields. From the perspective of valuation matching, computers and new electricity are relatively overvalued, large consumption is relatively matched, and large finance is relatively undervalued. （3） From the perspective of the whole year, the industries to be recommended include food and beverage, airport, automobile, machinery, scenery storage, military industry and electronics.
Risk tips: 1. The epidemic situation is out of control; 2. A sharp recession; 3. The policy has changed more than expected.
