2021 is coming to an end. In the second year after the epidemic, the development of the global epidemic is not as optimistic as most people expected at the end of 2020. The instability of global supply chain and the lack of consumption scene are still the main melody of the global economy throughout the year.
For the A-share market, it is not too much to call 2021 a turning year. This year, there has been a turning point in consumption and the style of large and small plates has also been reversed. At the same time, boom track investment and carbon neutral theme investment are also the new main lines throughout the year.
In the turning year, strategy researchers face three soul torture. Soul torture 1: Why did the collapse of consumption occur after the Spring Festival this year? Soul torture 2: Why are small and medium-sized growth stocks emerging? Soul torture 3: how does track investment balance prosperity and valuation?
Valuation system switching: from DCF to peg. We believe that the fundamental reason why the valuation system changes from DCF focusing on long-term profits to peg focusing on short-term profits is the increase of long-term logical uncertainty and the increase of medium and short-term profit fluctuations. The risk of falsification of the long logic of stock investment is increased, that is, there is great uncertainty in the final value of cash flow, while the DCF valuation focusing on long-term profit has a high dependence on the final value of cash flow. The increase of the uncertainty of long logic leads to the decline of the weight given to long-term profit by the market valuation system. At the same time, the medium and short-term profit fluctuation has increased, and the stock market valuation is also affected by the medium and short-term profit fluctuation.
Mystery of market style: looking for the Holy Grail of market style. Judging market style is one of the ultimate pursuit of top-down research. In fact, there are many factors affecting market style, and it is difficult to judge the change of style from one dimension. The core contradiction affecting growth / value style is whether growth is scarce, and the core contradiction affecting small cap / large cap style is uncertainty risk premium and liquidity premium.
Essentials of track Investment: alpha in beta. Top down track investment earns money from the industry beta. Combined with the bottom-up selection of horse racing and racers in the track, alpha can be further excavated in the beta. In the long run, energy progress and Trust Alliance Information Development Inc.Ltd.Shanghai(300469) are the core drivers of long-term social development. Reducing costs and improving efficiency are eternal themes. Therefore, the industrial chain related to energy progress and Trust Alliance Information Development Inc.Ltd.Shanghai(300469) related industrial chain are the concentrated areas of long-term high-quality track. In addition, industries that meet human material and spiritual needs, such as consumption and medical treatment, are also potential areas for long-term high-quality racing.
Over the past year, hundreds of roadshows and exchanges have been a source of inspiration. Looking forward to 2022, as mentioned in our annual strategy: de real estate, consumption reduction and manufacturing upgrading are the three major structural trends of China’s economy. The manufacturing industry has entered a new chapter, and the blueprint for energy transformation, manufacturing upgrading and the rise of innovative drugs has been gradually launched.
Risk tips: economic recovery is not as expected, macro liquidity contraction risk, overseas black swan event
