Turning to the direction of A-share investment in 2022, Western Securities Co.Ltd(002673) chief strategic analyst Yi Bin said that in 2022, investors need to actively look for structural opportunities in the mismatch between liquidity and profitability, among which the supply guarantee of primary products and essential consumer goods are the most deterministic. In addition, Hong Kong stocks are expected to usher in a new round of investment opportunities. However, he also said that too fast profit expectation switching will also bring more potential risks to boom investment.
looking for structural opportunities in 2022
“Winter agitation” is coming to an end. Since late September, our team has put forward the view of “winter agitation”, emphasizing that under the background of monetary policy and fiscal policy, the market will accelerate the switching of future profit expectations, promote the improvement of market risk sentiment, and the agitation in 2021 will be earlier than in previous years.
Structurally, since “winter agitation” is the superposition of traditional valuation switching and spring agitation, there will be rotational performance opportunities in both the consumer and financial industries with expected valuation repair, agriculture and new and old infrastructure with expected performance reversal in the future, as well as new energy (vehicles) with high growth expectations.
At present, our early views have also been verified by the market. At the current time point, with the gradual realization of favorable policies, the adjustment of overseas liquidity expectations, and the emergence of downward pressure on the economy, the driving force for the further upward movement of the market is gradually weakening.
Looking forward to 2022, with the emergence of economic downward pressure under the disturbance of the epidemic in the first half of the year, the gradual force of China’s “stable growth” policy will still be the main tone. With the gradual normalization of macro-economy in the second half of the year, the flexible and appropriate adjustment of monetary policy will also bring some pressure to the market.
For the A-share market, the mismatch between monetary policy and economic fundamentals means that the upward momentum of the market center will further slow down, and investors need to actively look for structural opportunities in the mismatch between liquidity and profitability. On the whole, the liquidity environment in the first half of the year is relatively abundant. Although the economy is expected to decline, the market sentiment is still, there are more market opportunities, and the growth track will be more dominant in style; In the second half of the year, as the economy rebounded and liquidity tightened, it will be more critical to grasp the industry opportunities with certainty in the improvement of profit expectations.
grasp the main line of investment in essential consumer goods
The word “stable” appeared 25 times in the central economic work conference in 2021 and 13 times in the 2020 conference, which also triggered the market’s expectation for the implementation of policies in 2022. Historically, in order to achieve economic stability, it is often necessary to make timely fine-tuning of policies in order to ensure that there will be no significant deviation of the economy from expectations, and the result is a wide range of shocks in the financial market. Therefore, from the market level, in order to realize the stable operation of the economy, the frequency of active fine-tuning of policies in 2022 will be higher than that in 2020, and the fluctuation caused by the correction of market expectations will be greater.
Paying attention to the supply guarantee of primary products will be the biggest investment opportunity in the capital market in 2022. From a medium and long-term perspective, the tense supply chain pattern after the epidemic has its inevitability. For a long time, under the background of rising global trade dependence, the division of labor among resource countries, producer countries and consumer countries has become increasingly complex, and the inventory relative to GDP levels of major economies such as China and the United States have decreased significantly, which also paves the way for the tension of the supply chain. From the historical experience of the earthquake in Japan and the flood in Thailand, the impact on the supply chain often has a far-reaching impact on the industrial structure. At present, only the high-tech industry most sensitive to the supply chain is greatly impacted. In the future, the risk of further transmission of supply chain tension to other traditional industries still exists, especially the planting industry, aquaculture, coal, electricity, oil and gas and other fields related to food security and energy security.
From the perspective of industry allocation, with the rise of market volatility, the market’s pursuit of certainty premium will be the main source of excess return in 2022. This is also the idea of our annual strategy “seeking one in change and seeking its determination in motion”. At present, the rise of commodity prices will be the most deterministic direction for the price transmission of essential consumer goods. Although the fastest rising stage of commodity prices may have passed due to weak demand, considering the slow recovery of supply and the increase of preventive replenishment demand caused by tight supply chain, the price of industrial products represented by crude oil will remain at a high level.
Historically, the central rise of crude oil price has a relatively definite transmission to the price of essential consumer goods represented by Shenzhen Agricultural Products Group Co.Ltd(000061) , which is mainly realized through two paths:
First, the rise in the price of crude oil pushed up the Shenzhen Agricultural Products Group Co.Ltd(000061) costs of chemical fertilizer, which in turn drove up the prices of staple grains such as rice, wheat and corn.
Second, the upward price of crude oil pushes up the prices of fuel oil, chemical fiber and synthetic rubber, and transmits to fuel ethanol, cotton fabrics and natural rubber through the substitution effect, thus driving the upward price of corn, sugarcane, cotton and rubber. Therefore, if the asset allocation is carried out in the dimension of year, we suggest that investors should grasp the most deterministic investment main line of essential consumer goods.
strategic opportunities for Hong Kong stocks gradually emerged
Strategic opportunities for Hong Kong stocks are gradually emerging. From the history of the past 20 years, only during the epidemic period in early 2016 and 2020, Hong Kong stocks showed extremely rare net breaking due to abnormal fluctuations in market sentiment.
In addition, in most cases, buying the Hang Seng index is a high winning transaction when the price to book ratio returns to a level near 1. From the perspective of fundamentals, the Hang Seng Index has undergone great changes in recent years, and the constituent stocks with a relatively high share have shifted from traditional financial real estate to high-tech industries. With the recent orderly promotion of antitrust policies, the potential policy risk of suppressing the valuation of Internet leaders is expected to land in 2022, and Hong Kong stocks are expected to usher in a new round of investment opportunities.
In the A-share market, the story of rapid switching of investment style is repeated. From the computer media from 2013 to 2015 to the consumption white horse from 2016 to 2018, the A-share market can always complete a round of investment style transformation in three years. Since 2019, the boom investment focusing on high profit growth expectation has achieved obvious excess returns. The impact of the epidemic in 2020 has passively accelerated the switching rhythm of market profit expectation.
By July 2021, the profit expectation reflected by the market has been switched to 2022, and the recent market performance has reflected that some forward-looking investors have begun to price the longer-term profit expectation. From the A-share profit forecast since the data are available, more than one-third of shenwanyi industries predict that the hit rate of industry profit in the next two years is less than 30%. Too fast profit expectation switching will also bring more potential risks to boom investment.
(Daily Economic News)
