Review of the A-share market in 2021: by the end of November, the Shanghai composite index had fluctuated between 3350 and 3750, the main indexes were differentiated, the plate rotation was accelerated, and the market sentiment gradually returned to stability. In the first half of the year, the performance of listed companies was relatively good, but in the second half of the year, with the slowdown of economic growth momentum, the profit pressure appeared, the valuation level also declined as a whole, and some sectors fell significantly due to the impact of policy regulation.
Market environment outlook for 2022: it is expected that the overall A-share market will remain volatile next year, and the structural highlights deserve attention. 1) China's economy is facing the problem of insufficient effective demand. The weakening of economic fundamentals will increase the pressure on corporate profits and reduce roe. It is expected that the overall profit growth of A-share enterprises will continue to slow down and the upstream and downstream performance will be differentiated. After excluding finance, the growth rate of parent net profit of all A-share companies may fall to the single digit level, and the performance of small and medium-sized enterprises is slightly better than that of large market blue chips. 2) The overall liquidity environment is improving, and incremental funds continue to enter the market. Monetary policy is generally stable and loose, which is good for the equity market. With the unchanged tone of "no speculation in housing and housing", the net value transformation of bank financial management, and the rising risk of overseas stock market, the attraction of A-Shares will be enhanced, and individual investors, financial institutions and foreign capital will continue to allocate a shares. 3) In 2022, the probability of significant fluctuation of macro policy environment is low. However, under the background of slowing economic growth momentum, deepening economic structure adjustment, relaxing the margin of macro policy and accelerating the introduction of industrial policy, focusing on several key tracks is still the main logic of institutional allocation. If you want to obtain excess returns, you still need to select segments.
Industry configuration recommendations: 1) silicon material leader in photovoltaic, cell module, photovoltaic integration leader, leading complete machine manufacturer in wind power, fuel cell in hydrogen energy, hydrogen production from industrial by-products and carbon neutralization main lines such as lithium ore, artificial graphite and diaphragm electrolyte in the upstream of new energy vehicle industry chain; 2) Benefiting from inflation transmission and pork price recovery; 3) Structural opportunities for high-end manufacturing sectors such as the supply side shortage situation has improved, the semiconductor that is expected to be in large quantities next year and the CXO that maintains a high outlook and has a clear demand side.
Risk factors: repeated epidemics, unexpected macroeconomic decline, unexpected fluctuations in overseas liquidity policies, and intensified Sino US friction.
