Key points:
1. Since December 2021, under the influence of many factors, such as weak economic growth in China, hawkish overseas monetary policies and escalating geopolitical conflicts, the overall valuation level of the market has significantly corrected, and the downward range of valuation has exceeded 20%. At present, the valuation quantile of Wande quana has fallen below 50% in recent 10 years, and the cost performance of A-share market has gradually appeared, There is an opportunity to repair the valuation in the process of oversold rebound.
2. In terms of broad-based index, the current valuation quantile of broad-based index is obviously stratified. Except that the valuation quantile of Shanghai Shenzhen 300 and CSI 100 in recent 10 years has slightly exceeded 50%, the valuation quantile of other broad-based indexes in recent 10 years has fallen below 50%, and CSI 500 is the lowest, within 5%. If the current performance prediction is followed, there will be no killing of performance, 2022pe will fall within the 25% valuation quantile.
3. In terms of style, the current valuation quantile of small and medium-sized stocks in recent 10 years has dropped to less than 15%, the valuation quantile of the large market is still above the 70% level, and the separation of valuation is still obvious. The valuation quantile of industry style is obviously layered. The valuation quantile of consumption style has been adjusted to about 70% in recent 10 years. The valuation quantile of growth style has fallen back to the range of 50%. The current valuation quantile of Finance and cycle sector is at the historical bottom range, which is about 13%.
4. In terms of industry and track, at present, the valuation quantile of more than two-thirds of industries in recent 10 years has fallen below the 50% level. Although the valuation level of the steady growth sector has risen, the safety margin is still relatively high, and the valuation quantile is less than 10%; Consumption and growth of the hot track performance differentiation, Baijiu, new energy vehicles and photovoltaic panels in the past 7 years, the valuation of the sub adjustment to about 70%, CXO, semiconductor sector valuation sub points have dropped to around 10%, the value of configuration began to appear.
5. On the whole, after the early market adjustment, the contradiction of “expensive” in the market has been greatly alleviated. Structurally, the valuation of small and medium-sized market style is at the bottom of the historical range, which has a higher margin of safety than the large market. In addition, after preliminary adjustment, the current valuation of growing industries such as medicine and electronics has returned to a reasonable level, and the cost performance has gradually appeared. From the expected valuation level in 2022, the valuation quantile of most broad-based indexes in 2022 will fall below 25%, and the median valuation quantile of the industry will further decline to about 20%, which means that the valuation adjustment is basically in place.
Summary:
1. Since December 2021, under the influence of many factors, such as weak economic growth in China, hawkish overseas monetary policies and escalating geopolitical conflicts, the overall valuation level of the market has significantly corrected, and the downward range of valuation has exceeded 20%. At present, the valuation quantile of Wande quana has fallen below 50% in recent 10 years, and the cost performance of A-share market has gradually appeared, There is an opportunity to repair the valuation in the process of oversold rebound. Since December 2021, on the one hand, with the hawkish signals from the European and American central banks continuously strengthened and the US bond yield continued to rise rapidly, the global stock market has ushered in an adjustment; On the other hand, the effect of China’s economic bottom and steady growth is not very obvious. The Chinese market staged “recession concerns”, superimposed on the continuous escalation of the conflict between Russia and Ukraine, resulting in a systematic killing valuation market of a shares. Since December, the correction range of Wande all a has exceeded 10%, and the valuation quantile of Wande all a in recent 10 years has also dropped from 70% in December to 46% at present.
2. In terms of broad-based index, the current valuation quantile of broad-based index is obviously stratified. Except that the valuation quantile of Shanghai Shenzhen 300 and CSI 100 in recent 10 years has slightly exceeded 50%, the valuation quantile of other broad-based indexes in recent 10 years has fallen below 50%, and CSI 500 is the lowest, within 5%. If the current performance prediction is followed, there will be no killing of performance, 2022pe will fall within the 25% valuation quantile. Specifically, after three months of adjustment, the current valuation quantile of major broad-based indexes of A-Shares has fallen to a relatively low level. Except that the valuation quantiles of CSI 300 and CSI 100 in recent 10 years are still above the 50% level, the valuation quantiles of other broad-based indexes are lower than 50%. The current valuation quantile of Shanghai stock index, Shenzhen Component Index, wandequan A and gem index is in the range of 30% – 50%. The valuation quantile of small and medium-sized index has dropped to less than 15%, and the 10-year PE quantile levels of national securities 2000, China Securities 1000 and China Securities 500 have reached 13.17%, 9.99% and 2.14% respectively, which are at historical lows.
3. In terms of style, the current valuation quantile of small and medium-sized stocks in recent 10 years has dropped to less than 15%, the valuation quantile of the large market is still above the 70% level, and the separation of valuation is still obvious. The valuation quantile of industry style is obviously layered. The valuation quantile of consumption style has been adjusted to about 70% in recent 10 years. The valuation quantile of growth style has fallen back to the range of 50%. The current valuation quantile of Finance and cycle sector is at the historical bottom range, which is about 13%. In terms of market value style, after the market adjustment since mid December 2021, the current small and medium-sized market valuation has dropped to a historically low level. The valuation quantile of the small cap index has dropped from 24.45% to 4.28% in recent 10 years, and the valuation quantile of the medium cap index has also dropped to nearly 10%. At the same time, the current large and small cap valuation is still above 70% in recent 10 years, There is still a high valuation differential between large and small disk styles. In terms of industry style, in this round of market adjustment, the growth and consumption style sector with relatively high early valuation level has a higher callback range, while the valuation callback range of Finance and cycle sector is relatively small. At present, the valuation quantile of financial and cyclical style in recent 10 years is about 13%. After the correction, the valuation quantile of growth style in recent 10 years has dropped to less than 50%. Due to the high valuation in the early stage, the valuation quantile of consumption style is still more than 70% in recent 10 years after the correction. The valuation quantile of stable style has not decreased but increased before and after the market adjustment, At present, it is about 50% in the past 10 years.
4. In terms of industry and track, at present, the valuation quantile of more than two-thirds of industries in recent 10 years has fallen below the 50% level. Although the valuation level of the steady growth sector has risen, the safety margin is still relatively high, and the valuation quantile is less than 10%; Consumption and growth of the hot track performance differentiation, Baijiu, new energy vehicles and photovoltaic panels in the past 7 years, the valuation of the sub adjustment to about 70%, CXO, semiconductor sector valuation sub points have dropped to around 10%, the value of configuration began to appear. From the perspective of the industry as a whole, the current valuation quantile of social services, power equipment and food and beverage in recent 10 years is still higher than 80%, and the valuation quantile of 8 industries such as automobile, basic chemical industry and non-ferrous metals in recent 10 years is in the range of 50% to 70%; The valuation quantile of 19 industries such as communication, medicine, biology and electronics has been callback to 50% in recent 10 years. In terms of popular tracks, the current valuation quantile of old infrastructure, banking, real estate and other stable growth sectors is within 10%; In the early stage, the heavy consumption and growth of the new institutions were divided into 7 parts: Baijiu, new energy vehicles and photovoltaic panels. The valuation scores in the past 70% years were around 70%, and the valuation of CXO and semiconductor sectors dropped to about 10%, and the value of distribution gradually appeared.
5. On the whole, after the early market adjustment, the contradiction of “expensive” in the market has been greatly alleviated. Structurally, the valuation of small and medium-sized market style is at the bottom of the historical range, which has a higher margin of safety than the large market. In addition, after preliminary adjustment, the current valuation of growing industries such as medicine and electronics has returned to a reasonable level, and the cost performance has gradually appeared. From the expected valuation level in 2022, the valuation quantile of most broad-based indexes in 2022 will fall below 25%, and the median valuation quantile of the industry will further decline to about 20%, which means that the valuation adjustment is basically in place. Under the assumption of this year’s performance, the predicted valuation in 2022 will decline further, and the valuation quantile of most broad-based indexes will fall below 30%. From the perspective of style, the quantile level of small and medium-sized market valuation will continue to remain at the historical bottom range, while the market style valuation will be adjusted to 13%, which is significantly improved compared with the current valuation level. The performance of industry style valuation was differentiated. The quantile of consumption style valuation decreased to 32%, while the quantile of growth and financial valuation fell to less than 5%, and the quantile of cyclical and stable industry valuation increased. From the perspective of industry and track level, under the assumption that the expected profit remains unchanged, the median valuation quantile of the industry as a whole in recent 10 years has dropped to 22%, and the cost performance has been further improved. The CXO and semiconductor sector valuation positions of the heavily loaded institutions dropped to about 5%, while the quantile of Baijiu and new energy vehicle sectors also dropped from the current level of 76% to 70%.
Risk tips: liquidity tightening is higher than expected, economic stall is downward, Sino US friction is intensified, the epidemic situation is worse than expected, market fluctuation risk, uncertainty of the future performance of the target company, historical data are for reference only, etc.
