In December, A-Shares were first raised and then restrained, the trend of main stock indexes was differentiated, and the market blue chip performance was better: as of December 27, the Shanghai Composite Index closed at 3615.97 points, up 1.46% from the end of November. It showed the trend of first raising and then restraining in the whole month, with a maximum breakthrough of 3700 points. However, affected by the fermentation of epidemic in Shaanxi and other places, the continued weakening of economic data, and the increasing liquidity pressure at the end of the year, A-Shares have performed weakly since the end of the year. In terms of sub structure, the trend of main stock indexes of A-Shares is differentiated, and the market blue chip performs better. By industry, construction, public utilities, social services and other industries performed well.
The profit growth of A-share listed companies will continue to fall. The degree of profit pressure has become a key factor affecting the subsequent trend of the market: it is expected that the growth rate of net profit attributable to the parent of all A-Shares and roe level will continue to decline in the fourth quarter. In 2022, the tone of real estate regulation remains unchanged, and the probability of foreign demand peaking and falling is high. It is urgent to expand domestic demand to fill the gap. In the first half of the year, there was great downward pressure on the economy, and the growth rate of A-share profits will continue to decline.
The liquidity environment of A-Shares is improving, and the market sentiment is expected to be cautious: under the setting tone of more positive and promising monetary policy, it is expected that the liquidity is stable and loose, the fiscal policy is gradually strengthened, and the credit policy is overweight, which is beneficial to equity assets as a whole. From the indicators such as the decline in the scale of industrial capital reduction, the rebound in the average daily turnover of major stock indexes, the continued rise in the shares of newly established partial stock funds, and the maintenance of net capital inflow to the north, the liquidity situation of the A-share market is generally good. However, the market sentiment will still be more cautious. The restless market performance may be lower than the market expectation. In the performance window period, the investor mentality tends to be conservative.
In the stage of declining profit expectations and weak market sentiment, the undervalued sector may be more favored by the market: as of the closing on December 28, the current dynamic P / E ratios of Shanghai Stock Exchange 50 and Shanghai and Shenzhen 300 are at the quantile level of about 70% since 2010, which has increased compared with the end of last month. The dynamic P / E ratio of small cap stocks represented by China Securities 500 and gem fell slightly. The current valuation of banking, non bank finance, communication, comprehensive and other industries is at a low level since 2010, which is worthy of attention.
General trend judgment and industry allocation suggestions: the profit expectation of all A-Shares continues to fall, but the liquidity is worry free, the policy is stable, and the market sentiment is expected to improve marginally. The A-Shares may continue to fluctuate before the Spring Festival. Suggestions on industry allocation: 1) benefiting from the policy expectation of "steady growth", pay attention to the required consumption with bottom rebound and strong risk aversion, as well as optional consumption sectors such as household appliances and light industry; The pace of issuing special bonds has been accelerated, infrastructure investment has been made to support the economy, and attention has been paid to the new infrastructure sector; 2) Monetary policy is more proactive and the liquidity situation is better, which is conducive to boosting the performance of large financial sectors such as banks and insurance; 3) The medium and long-term policy support is strong and has not been fully implemented
Risk factors: epidemic deterioration; The economy fell faster than expected; Regulatory policies have been significantly tightened.
