review: since November 2021, the judgment style has switched to the direction of steady growth such as finance and real estate. The weekly report on March 13, 2022 judged that "the most panic time has passed, and the market will usher in a phased repair window in the coming month".
Outlook: "policy bottom" + "market bottom" has been realized, "small high tech" + "big finance" and "dumbbell" configuration
financial committee meeting "suit the remedy to the case", stabilize confidence, and "policy bottom" is clear after the conflict between Russia and Ukraine, the market has fallen sharply again recently. The main reason is that under the confrontation of global powers, the concerns about geopolitical game and Sino US regulatory conflict have increased rapidly, resulting in the collapse of Chinese stocks, the sharp decline of Hong Kong stocks and the substantial outflow of foreign capital, which has impacted a shares. For the main issues concerned by the market, the financial committee meeting gave clear plans, which helped boost market confidence: 1) the meeting repeatedly stressed "maintaining the stable operation of the capital market" , and required "actively introduce policies conducive to the market, carefully return to Taiwan contraction policies" and "timely respond to hot issues concerned by the market" 2) for zhonggai shares, the meeting said that at present, the communication between regulators of China and the United States has made positive progress and is working to form a specific cooperation plan. It also made it clear that "the Chinese government will continue to support all kinds of enterprises to list abroad" 3) for Hong Kong stocks and the Internet supervision that has a great impact on Hong Kong stocks, the meeting stressed that "the mainland and Hong Kong regulators should strengthen communication and cooperation", and required to "steadily promote and complete the rectification of large platform companies as soon as possible" and "promote the stable and healthy development of Pingtai economy" 4) for real estate enterprises, meeting requires "timely study and put forward effective solutions to prevent and resolve risks, and put forward supporting measures for transformation to a new development model" 5) for the economy, the meeting called for "effectively invigorating the economy in the first quarter, taking the initiative to respond to monetary policy, and maintaining moderate growth of new loans". There is room and impetus for monetary and credit relaxation in the follow-up.
meanwhile, the three major risks from outside are expected to improve 1) previously, foreign capital flowed out sharply. However, we believe that with the communication and dialogue between Chinese and American regulators and the leadership, the panic of domestic and foreign capital has eased, and the subsequent outflow pressure of foreign capital, especially the allocation sector, may also slow down. 2) the Federal Reserve raised interest rates by 25bp in March, and the rise of US stocks showed "boots landing" although the Federal Reserve's interest rate meeting on March 16 raised interest rates by 25bp as scheduled, significantly moved forward the dot matrix to raise interest rates seven times during the year, and raised the federal funds rate to 1.9% at the end of 2022, releasing hawkish signals that exceeded market expectations, US stocks closed up strongly on the same day. This week, the S & P 500 and Nasdaq rose 6.2% and 8.2% respectively. It shows that risk appetite is rapidly repairing. 3) recently, global commodity prices have fallen sharply, and the market's previous concerns about the global stagflation crisis are also fading
therefore, we believe that with the continuous release of China's policy warmth, the currency and credit are expected to be loose. At the same time, the risks of overseas stagflation, interest rate hike, foreign capital outflow and China concept stock supervision are expected to be alleviated. The bottom of the market has appeared and will usher in a repair window
operation strategy: on the one hand, technological growth has significantly improved in terms of valuation or congestion pressure, and the performance deterministic direction (photovoltaic, semiconductor, energy storage, etc.) is configured at the bottom of the emotional repair window; On the other hand, the direction of "steady growth" is clear, and there is still room for repair in banks, real estate, etc the two sessions and the meeting of the Finance Committee have continuously released the signal of "stable growth", and the pattern of "external chaos and internal stability" has been determined. The sectors of state-owned enterprise real estate, infrastructure, banking and securities companies are both safe and policy driven. For the growth of science and technology, combined with the ten indicators proposed in the "new half army" timing framework, the relevant sectors have entered the bottom area. At present, we can make a deep rebound along the photovoltaic, wind power, semiconductor and other sectors with strong performance certainty. At the same time, we can also find "small high-tech" from bottom to top based on the medium-term business trend and profit growth in the bottom area.
investment strategy: "small high-tech" + "big finance" and "dumbbell" configuration: on the one hand, in the adjustment of medicine, computer and "new half army", look for the target that meets the characteristics of "small high-tech" from bottom to top; On the other hand, focus on the financial, real estate, new and old infrastructure and other sectors that benefit from the expectation of "steady growth". In the long term, we will continue to focus on the five major directions of scientific and technological innovation 1) new energy (new energy vehicles, photovoltaic, wind power, UHV, etc.), 2) new generation information and communication technology (artificial intelligence, big data, cloud computing, 5g, etc.), 3) high-end manufacturing (intelligent CNC machine tools, Siasun Robot&Automation Co.Ltd(300024) , advanced rail transit equipment, etc.), 4) biomedicine (innovative drugs, CXO, medical devices and diagnostic equipment, etc.), 5) military industry (missile equipment, military electronic components, space station, space shuttle, etc.).
risk tips: focus on the unexpected return of global capital to the United States and the game between China and the United States.
