Key investment points:
The growth target of about 5.5% is consistent with the tone of the previous central economic work conference
The economic growth target for 2022 is set at about 5.5%, which is consistent with the keynote of "taking economic construction as the center" of the central economic work conference. The setting of this target growth rate mainly considers the needs of stabilizing employment, ensuring people's livelihood and preventing risks, and is connected with the average economic growth rate in recent two years and the objectives of the 14th five year plan. It is a comprehensive consideration after combining practical needs and potential capabilities. Historically, almost all the economic growth targets set by the government in the past 20 years have been achieved. One of the slightly lower years is 2019, with a target of 6% - 6.5% and an actual growth of 6%, which is at the lower limit of the target range. In 2014, the target is about 7.5%, with an actual completion of 7.4%. In recent years, the government has mostly adopted the form of interval for the growth target, but the reference of "left and right" is not uncommon, which means that the government has greater flexibility for the economic growth target.
More efforts should be made in fiscal policy
There are relatively many bright spots in the fiscal policy in this year's government work report, which will mainly focus on improving the intensity of expenditure, increasing local transfer payments, ensuring the effect of expenditure and reducing taxes and profits. Although the general deficit ratio this year has been reduced from 3.2% of the previous year to 2.8%, returning to the fiscal deficit level in 2019, the intensity of fiscal expenditure in total has increased significantly. It is expected that the total scale of public fiscal expenditure will reach 26 trillion yuan in 2022, with a significant increase in growth compared with last year. High-intensity fiscal expenditure will help stabilize economic growth. At the same time, the new combined tax support policy will be implemented, and the annual tax rebate and reduction is expected to be about 2.5 trillion yuan. Adhere to the combination of phased measures and institutional arrangements, and carry out tax reduction and tax rebate at the same time, so as to effectively help economic entities alleviate liquidity pressure and help maintain the sustainability of economic recovery.
Monetary policy is mainly "stable"
The central government's overall monetary policy has been stable since the end of 2021, and the previous round of monetary policy has been "stable" since the central government's general monetary policy report at the end of 2023. The government work report focuses on "expanding the scale of new loans". It seems that there is still some room for total easing. However, under the pressure of internal and external balance such as the rising overseas inflation expectation and the Fed's expectation of raising interest rates, China's total easing space may be relatively limited, and the CPI target is set at about 3%, We believe that we have comprehensively considered the conditions for the high overseas inflation and the overall controllability of China's inflation situation at the current stage, and based on China's stable political and economic situation, RMB and related assets currently reflect a certain risk aversion attribute, which is conducive to the stability of the RMB exchange rate in the interest rate increase cycle of the Federal Reserve, It provides more space for China's policy to maintain "self focus". Therefore, it is expected that China's monetary policy will be "stable".
Deepening reform and the new economy is an important starting point for driving economic growth
To promote sustained and healthy economic development, on the one hand, we cannot do without unswervingly deepening reform and greater stimulating market vitality and endogenous driving force for development. We should correctly understand and grasp the characteristics and behavior laws of capital, and support and guide the standardized and healthy development of capital. Complete the three-year action task of state-owned enterprise reform, accelerate the layout optimization and structural adjustment of the state-owned economy, strengthen the supervision of state-owned assets, promote state-owned enterprises to focus on the main responsibility and main business, and improve the support and driving ability of industrial chain and supply chain. On the other hand, it is necessary to continuously improve the ability of scientific and technological innovation and accelerate the development of the new economy. The government work report on the new economy mainly involves four points: first, strengthen the national strategic scientific and technological force; Second, strengthen the incentive of enterprise innovation; Third, the key is to strengthen the supply of "specialized raw materials"; Fourth, promote the development of digital economy and build digital information infrastructure.
Steady growth force is difficult to change, and the overall market is weak
Looking forward to 2022, overseas, we believe that following the formal war between Russia and Ukraine last week, the participation of various forces has made the situation more complex and the radiation scope has been expanding. The continuous increase of sanctions against Russia by western countries has further exacerbated the conflict, and it is unlikely that Russia Ukraine negotiations will make substantive progress in the short term, The probability of conflict lasting longer than expected increases. Under the background that the epidemic has not subsided, the battlefield between Russia and Ukraine is overcast. On the one hand, it will lead to the continuous and substantial rise of global commodity prices, further increase the global inflationary pressure and accelerate the pace of interest rate hike by the Federal Reserve. Moreover, if overseas inflation remains high in the first half of 2022, it will pose a certain imported inflationary pressure on China; On the other hand, it has a continuous uncertain impact on the global financial market, and it is difficult to improve the risk appetite of the A-share market in the short term. For China, the government work report set the economic growth target of 2022 at about 5.5%, fully demonstrating confidence under the background of high base, suggesting that the overall policy environment is still relatively good, the decision to "stabilize growth" is strong, the loose tone is clear, or the sentiment of A-Shares is restored in the short term, and the popularity of some theme sectors of the "two sessions" is renewed, It is suggested to focus on the directions of "stable growth", carbon neutrality, common prosperity and digital economy, and combine the marginal changes of prosperity of subdivided sectors.
But after all, China's economy is still in a downward cycle, and the decline in corporate profits will suppress the improvement of A-share valuation as a whole. Under the background of overseas continuous contraction, the liquidity will actually be neutral and tight, with double killing of performance valuation. However, the stumbling relationship between China and the United States and the war between Russia and Ukraine have added risks. It is difficult to improve the market risk appetite. The A-share market is mainly a structural market in the first half of the year, and it will even need to continue to look for support; In the second half of the year, the counter cyclical adjustment policy will continue to work, the industrial drive will shift from the old economy to the new economy, and China's economic growth model will change from high growth to high-quality development. After the valuation is digested, A-Shares are expected to return to the slow bull Road. In terms of industry configuration, the performance valuation in the first half of the year is under pressure, and defensive varieties are preferred, such as undervalued bancassurance, construction and mandatory consumption. In the second half of the year, the new economy is expected to grow again, and endogenous booming industries such as new energy, auto parts, large technology and national defense industry with high performance certainty are added.
Risk tips
Global liquidity tightened more than expected; The global epidemic has developed beyond expectations; The macroeconomic growth rate fell faster than expected; The global energy crisis has further intensified; Inflationary pressures continued to rise.
