general trend study and judgment: return to shock after the storm
After waking a sting, you still need to cover it in spring. Previously, investors mistakenly believed that the reason for the sharp decline of A-Shares since Q1 was the superposition of a series of risk events. The market consensus believed that after the calm, the market could rebound quickly and effectively. However, the Shanghai Composite Index hit a new low after a new low in recent one year. Some investors ignore the pricing status of the market, and have quickly entered the pricing “quasi stagflation” from the “inflation + green transformation” in 2021, that is, the inflation of physical assets and the expectation of corporate profits have deteriorated rapidly, and the stock has entered the stage of killing both profits and valuation. After the short-term oversold and storm mode, A-Shares are expected to enter a phased rebound. However, before the demand side policy and the path of credit easing are fully clear, the analysts of the institution believe that the pattern of decline in investors’ profit expectations and rise in discount rate expectations is still difficult to reverse in the short term, and it will take time to rebuild market confidence and optimize the micro trading structure
pricing difficulties: profit expectation “looking for the bottom but not knowing the bottom”, discount rate expectation “looking for the top but not knowing the top”
Compared with inflation, the market is more afraid of deflation, but the bigger enemy is stagflation. Since Q4 in 2021, the consensus on the expectation of steady growth and the convergence of cpi-ppi scissors has expressed investors’ expectations for economic recovery. However, due to the vague demand side policy and the recurrence of the epidemic, the macro environment faced by analysts of the agency is the intensification of upstream inflation and the acceleration and slowdown of economic momentum. In the dimension of stock pricing, investors’ profit expectation is still in the state of “looking for the bottom but not knowing the bottom”, and the discount rate expectation is “looking for the top but not knowing the top”. At this point, the high volatility of A-Shares is consistent with the pricing logic reflected in the rebound of 10-year Treasury bonds. In addition to the experience of killing stock profits and valuation in the stagflation period, the more important thing in the United States 70-80s is that when the focus of the government turns to economic growth, stocks begin to pick up. In view of the current situation, after pricing the stagflation risk of a shares, the next pricing focus is on the efforts of demand side policies and the emergence of profit bottom. In contrast, the realization of the economic target of 5.5% in 2022 requires greater support in real estate, infrastructure and consumption policies. However, whether the demand side forces or not, the rise of discount rate requires the switching of investment style.
expected rise and high volatility of discount rate: opportunities for stock investment in stocks with low-risk characteristics
At present, the resident sector, the enterprise sector and institutional investors will jointly face the resonance between the rise of risk-free interest rate and the decline of risk preference, which is reflected in the expected rise and high fluctuation of discount rate, which further brings the pressure of outflow from the liability end of institutional investors. Before the demand side policy and credit easing trend are clear, geopolitics, tightening of overseas liquidity and real asset inflation will still restrict the improvement of investors’ choice range and risk appetite. Analysts of the institution believe that the current stock investment opportunities will focus more on stocks with low-risk characteristics, and the water will flow to the low. Dividend strategy, high dividend strategy and undervalued strategy have become the advantageous strategies for investors to obtain relative returns. To expand the source of income, low-risk characteristics should be found and generalized in more fields.
industry allocation and stock selection strategy: look for high-quality companies with non core assets around the industry in which the “core assets” are located
When investors’ risk appetite decreases, they choose core assets for hedging? No, the key should focus on low-risk characteristics and good micro trading structure. A simple stock selection idea is to look for high-quality companies with non core assets around the industry where the core assets are located. There are three recommended directions for low-risk features: 1) to g-end or public investment: photovoltaic, wind power, power operation, power grid, digital infrastructure, construction, etc; 2) Along the direction of inflation: coal and chemical resources; 3) dilemma reversal and profitability certainty: pig, Baijiu and so on.
