review: in mid October, we judged that the main line will return to growth, and science and technology innovation will sound the horn of counter attack. On November 10, in the sharp market shock, we judged that the next year’s market was about to start.
Outlook: hold the turbulence and beat the short with the long
Since November, the cross year market has been moving forward in turbulence. on November 10, when the market fluctuated sharply, we took the lead in judging that “the cross year market is about to start” and “cherish the long window at the end of the year” and recommended the undervalued sectors represented by real estate and infrastructure at the bottom. Since then, the cross-year market has opened slowly, and the Shanghai composite index once exceeded 3700. But recently, the market has been bumpy again.
hold the turbulence and beat the short with the long. The next year’s market will pick up levels in the “hesitation” of the market and the alternating rotation of plates. since we put forward the “cross year market” in mid November, the index has increased significantly, but the market is not “firm”. The market always has doubts and differences, and presents a state of “waiting for signal verification → rapid rise → shock consolidation”. The core reason is that as we have repeatedly stressed, this wave of cross year market is similar to the spring offensive in previous years, and most of the core driving forces come from the warming of policy expectations and risk appetite. Therefore, it is also vulnerable to changes in market expectations and some short-term negative factors. This week, the overall market rose, fell and continued to fluctuate, which was mainly affected by institutional position congestion, year-end balance structure, overseas epidemic disturbance, year-end capital return and other factors. However, the “anti humanity” of investment is that we need to overcome the current anxiety and turbulence with relatively long-term and rational judgment. we believe that the current cross year market is not over, and the market logic is still established, and continues to be fulfilled and strengthened: 1) on December 20, the one-year LPR interest rate was reduced by 5bp. At the fourth quarter regular meeting of the central bank on December 25, the monetary policy tools were required to “be more active and promising, increase support for the real economy” and “enhance the stability of total credit growth” “Enhance the resilience of economic development and stabilize the macro-economic market”. Under the downward pressure of the economy, the decision-making level has continuously released positive signals recently. Whether this interest rate cut, or the previous RRR reduction, economic work conference and Politburo meeting, are constantly verifying the judgment that we have always emphasized the expected warming of phased marginal “wide credit”. 2) At present, “steady growth” and “steady credit” have begun to work. In November, the growth rate of social finance picked up, and the investment of housing loans and bond financing of real estate enterprises significantly exceeded expectations. At the same time, the issuance of government bonds continued to speed up and the decentralization of Financial deposits significantly accelerated. It shows that “stable credit” and “stable growth” on the policy side have begun to accelerate. 3) With the gradual stabilization of the credit environment, the release of physical workload at the end of the year, the superposition of the cross cycle adjustment force window at the end of the year and the beginning of the year, as well as the continuous emergence of positive signals such as interest rate reduction and reserve requirement reduction, the market’s expectation of steady growth and policy relaxation will continue to rise, and the phased market will enter a time window of wide currency and phased marginal “wide credit”, So as to “escort” the cross-year market. therefore, hold the turbulence and beat the short with the long, and the cross-year market is not finished to be continued.
follow up focus on several general directions: 1) state owned real estate enterprises and new and old infrastructure: on the one hand, benefiting from marginal changes in policies, the expectations of “stable growth” and “stable credit” are rising. The economic work conference called for “moderately advanced infrastructure investment” and “promoting the construction of indemnificatory housing”. On the other hand, the subsequent monetary and credit is expected to be further relaxed, which will also bring about the valuation repair of infrastructure, real estate and other sectors. 2) Securities companies: the economic work conference proposed to “fully implement the stock issuance registration system”, which is expected to support the long-term performance of securities companies. At the same time, with the continuous deduction of the cross-year market, as a plate with strong linkage with the market, securities companies β Attributes will also be fully interpreted and released. 3) The scientific and technological growth represented by “small high tech” is arranged on a bargain hunting basis. Recently, the scientific and technological growth plate has been adjusted, which is mainly disturbed by factors such as position, mood and style. However, in the medium and long term, scientific and technological growth is still the inevitable choice for high-quality development and bigger cake under the policy of common prosperity. Under the background of the game between China and the United States, it is the most distinctive theme of the times to comply with the current urgent need to improve scientific and technological competitiveness and get rid of the dilemma of “neck sticking”.
investment strategy: in the short term, on the one hand, grasp the phased opportunities for the repair of undervalued state-owned real estate enterprises and securities companies, on the other hand, lay out “small high-tech” with long-term fighting short and bargain hunting. For a long time, focus on the five directions of scientific and technological innovation. 1) new energy (new energy vehicles, photovoltaic, wind power, UHV, etc.), 2) new generation information and communication technology (artificial intelligence, big data, cloud computing, 5g, etc.), 3) high-end manufacturing (intelligent CNC machine tools, Siasun Robot&Automation Co.Ltd(300024) , advanced rail transit equipment, etc.), 4) biomedical drugs (innovative drugs, CXO, medical devices and diagnostic equipment, etc.), 5) Military industry (missile equipment, military electronic components, space station, space shuttle, etc.).
risk tip: pay attention to the unexpected return of global capital to the United States and the game between China and the United States.
(Yao wanghou)
