Configuration view in January: don’t be restless and wait for “Pro cycle”
1. After the expected landing, the past “consensus” is cracking. At present, there is no “restless” market in the market, and there are cracks in the past “consensus”. The central economic work conference is actually the landing of market transaction expectations in the early stage. Based on the fuzzy macro logic, investors are actually the rebound of their respective preference main line of the game. However, before the fundamental signal officially appears, some investors have to become “frightened birds”, so that any disturbance may have an impact on the relevant plates. Under the original fragile internal structure, the financing cost of global transaction funds is linked to the real interest rate of the United States. Under the tightening trend of the Federal Reserve, the probability of sharp fluctuation of funds is rising, whether “true or false foreign capital”. The market needs to “break first and then establish”, so as to form a real joint force.
2. “Steady growth” is the direction. We should not underestimate our determination because of technical uncertainty. At present, promoting infrastructure and stabilizing real estate are the main means of “stable growth”. Since the “730” meeting, the policy has been conveying the signal of “stable growth” and is gradually landing: the issuance of government bonds has been accelerated since August; Since October, the medium and long-term loans of residents dominated by mortgage loans have increased year-on-year; On December 20, the one-year interest rate of LPR was lowered, which helped to stabilize real estate sales, and the financing care measures for developers were gradually introduced; On December 22, the national development and Reform Commission made it clear that it would further simplify the management of investment audit and lay a foundation for financial development. In terms of the source of funds for “steady growth” worried by the market, the constraints of local governments may not be as great as expected, and the central government may become the main driver of “steady growth” due to its low leverage. In fact, the amount of special bonds issued in advance in 2022 is also higher than in previous years. After experiencing the implementation of “ensuring supply and stabilizing price” of bulk commodities in 2021q3, the market should realize that the implementation of policy determination cannot be ignored because it is impossible to predict the way to achieve the final goal (nuclear capacity increase, mining increase and administrative price limit). Demand logic is replacing supply logic. From “ensuring supply and stabilizing price” to “stabilizing growth”, cyclical assets begin to stand on the friendly side of policy rather than the opposite.
3. If “clockwise”. In the past three rounds of recovery (2005-2007, 2009-2010, 2016-2017), finance, coal and nonferrous metals always led the increase, building materials ran through the whole process, and steel was the end. The difference between this round of “steady growth” logic and the previous round is that there have been more positive changes on the supply side, which will lead to more flexible boom signals (prices) of traditional industries represented by coal, nonferrous metals, steel and building materials relative to the recovery of demand. We discussed in the annual strategy “victory in the end” that its long-term profit center is moving upward. The actual situation is that in the cycle market of 2021, investors are worried about its sustainability and do not give reasonable valuation and pricing. However, the next stage may be that the expected rebound will be ushered in before the profits of the cyclical industry have fully fallen, and the long-term contraction of valuation will be repaired. The market will regain the long forgotten “Pro cyclical” logic in the future, but we should also pay attention to new logical changes.
4. Light in the crack of consensus: the return of value. The breach of consensus has emerged, the market’s steady state is being broken, and will continue to adjust in the short term, but hope is brewing. The economic fundamentals will be opportunities rather than risks. The “Pro cyclical” logic left for nearly one year will return again. The recommended layout: (1) financial sector under Credit stabilization: real estate, banking, infrastructure and real estate order driven construction industry; (2) The rebound in demand drives the profit revaluation in the traditional cycle: coal, nonferrous metals (copper, aluminum), building materials and steel. Theme recommendation: Rural Revitalization (seed industry, agricultural machinery, cold chain and environmental protection).
Configuration policy selection
According to the top-down logic, combined with profitability and valuation, this paper sorts out the following 10 stocks for investors’ reference
Risk tips:
Uncertainty of covid-19 epidemic situation; The implementation of the steady growth policy was less than expected.
