We are not afraid of short-term adjustment, and pay attention to the layout opportunities of the main line of growth next year.
The tightening of overseas liquidity has the most obvious periodic impact on the valuation of popular tracks. The market fluctuated greatly this week, mainly due to the disturbance of liquidity factors. Recently, the market’s expectation of overseas monetary policy tightening next year is rising. With the overseas economic recovery and the improvement of employment, the Federal Reserve is likely to enter the tightening cycle from accelerating taper to gradually raising interest rates. We have observed that in the past 17 years, the valuations of Mao index, Ning portfolio and other early popular tracks have been highly correlated with the trend of US bond interest rate. Therefore, under the concern of opening the tightening cycle next year, the early popular track stocks represented by Mao index and Ning combination may face a certain test. Generally speaking, under the background of liquidity shock, undervalued sectors are most likely to obtain excess returns.
The valuation of the value sector has limited room to boost. We see that the current market still seems to take into account the allocation of undervalued sectors. In our annual strategy, we pointed out that we need to guard against value traps in the process of macroeconomic platform. At present, China’s steady growth policy seems to be more stable. Under the bottom line thinking of risk prevention, it is difficult to open the space for value stock valuation. We look back on the style performance of Q4 market since 2010 and find that the market will usher in the transformation of style at the end of the year and the beginning of the year, and the market will return to the market or the dominant pattern of value style in Q4 in most periods. This reflects that the dominant logic of the cross-year market is more the expectation of macro policies and fundamentals in the performance window period. Therefore, in terms of allocation of market funds at this stage, they are more willing to return to low-risk industry leaders or value sectors benefiting from the marginal recovery of macro policies. At present, China is in the stage of economic structure transformation. The demand volume of traditional industries is still large and the incremental elasticity is insufficient. The policy is entrusted but not carried out. The sustainability of sector valuation boost under the long-term, short-term thinking is not high.
Adjust the lack of fear and pay attention to the layout opportunities of the main line of growth next year. We believe that the recent market adjustment of overseas fluctuations is the main reason, and there is no room for A-Shares to continue to fall. With the gradual stabilization of China’s credit cycle, the valuation of A-Shares will be given a favorable boost. Therefore, overseas fluctuations have more periodic impact on a shares. We need to pay attention to the choice and layout of market direction next year. We believe that considering the characteristics of upward cycle prosperity of capital expenditure and loose short cycle recession, the high boom growth direction and TMT technology are still the main layout lines: 1) after the active correction of high growth track stocks represented by Ning portfolio, the valuation switching investment price in 2022 is relatively high. Focus on investment opportunities in new energy lithium batteries, photovoltaic materials, equipment and other sectors. 2) The near-end performance growth of TMT communication and electronic hardware is relatively certain, and the industry valuation is at a low and medium position in history. It is recommended to pay attention to some subdivision tracks after the correction of intelligent driving, lidar and power semiconductor. Media content and computer software pay more attention to the high odds space brought by liquidity.
Risk tip: the counter cyclical policy is less than expected, and the epidemic situation is worse than expected.
