This week (from March 14 to March 18, 2022, the same below). Dow Jones industrial average 3475493 points, + 5.50%; S & P 500 index 446312 points, + 6.16%; NASDAQ 1389384 points, + 8.18%. This week, Hang Seng technology index + 5.6%, Hang Seng China Enterprise Index + 4.33%.
The financial stability and Development Commission of the State Council held a special meeting
On March 16, the financial stability and Development Commission of the State Council held a special meeting to study the current economic situation and capital market problems. The meeting pointed out that with regard to China concept shares, the regulatory authorities of China and the United States have maintained good communication and made positive progress. The Chinese government continues to support all kinds of enterprises to list abroad. With regard to the governance of platform economy, relevant departments should improve the established plans in accordance with the principles of marketization, legalization and internationalization, adhere to seeking progress while maintaining stability, and set up red lights and green lights through standardized, transparent and predictable supervision. On the stability of Hong Kong's financial market, the mainland and Hong Kong regulators should strengthen communication and cooperation. Relevant departments should earnestly assume their responsibilities, actively introduce policies conducive to the market and carefully introduce contractionary policies. We should respond to the hot issues concerned by the market in a timely manner. All policies that have a significant impact on the capital market should be coordinated with the financial management department in advance to maintain the stability and consistency of policy expectations. Long term institutional investors are welcome to increase their shareholding ratio.
Investment suggestions:
Due to concerns about the escalation of geopolitical risks, the repeated epidemic in China, the market's attention to regulation, the announcement of five Chinese enterprises into the provisional list by the US SEC and other factors, combined with the outflow of funds from overseas, the market panic has intensified since last week. Hong Kong stocks and Chinese stocks in US stocks have experienced a rare "roller coaster" market. Under the market panic, Hong Kong stocks and Chinese stocks have been sharply sold off, and the short selling ratio has increased. On Wednesday, the FSC of the State Council actively set the tone at an important moment, underpinned and stabilized the policy expectations, stated that "at present, the regulators of China and the United States have maintained good communication and made positive progress", and stressed that "any policy that has a significant impact on the capital market should be coordinated with the financial management department in advance to maintain the stability and consistency of policy expectations". Hong Kong stocks and US stocks rebounded sharply. For China's policy environment, we expect the predictability and stability of the platform's economic governance to be further improved, and we look forward to the introduction of more positive measures to stabilize the market in the future. For the regulatory risks of China concept shares in the United States, the decision-making level has stated that it adheres to the opening to the outside world, and China US audit supervision is committed to forming a specific cooperation plan. It is suggested to continue the communication progress between the competent departments of both sides, which may still be one of the core factors determining the market sentiment in the short term. At present, Internet companies still have long-term investment value and are currently at the bottom stage. After the sharp impact and adjustment of the market in the early stage, our configuration suggestion is to recommend "top students" with "good business" and "good model", that is, Internet representative enterprises. At present, the valuation of platform companies is at a low level, the competitive barriers are relatively stable, and the predictability of the policy aspects of the core concern of the market is enhanced. It is expected that with the steady economic growth, the control of local epidemics, the warming of industrial policies and the adjustment of the base, the fundamentals are expected to accelerate the recovery from 2022q2.
From the perspective of industry segments:
1) game: if the issuance of Chinese version number is resumed, the supply elasticity will be significantly improved under the low base. The short-term correlation between the industry and the macro economy is relatively low, and the superimposed game goes to sea to maintain high growth. The fundamental toughness is good in 2022. If the supply improves, the growth is expected to recover further. Suggested attention: Tencent, Netease and Xinxin. 2) Local life: the space is vast and the pattern is relatively stable. After the improvement of external macroeconomic and local epidemic factors, the fundamental growth is expected to recover to the range of 20% - 25% quickly. The rate relief measures of takeout platform point to permanent rate restrictions, and the short-term UE impact may be basically controllable. It is suggested to pay attention to the local life leader: meituan.
3) e-commerce: the overall demand is affected by the slowdown of macro consumption in the short term, and the entry of short video and local life leaders intensifies competition. It is expected that with the continuous improvement of macro consumption and the adjustment of base, the growth momentum of 2022h2 is expected to gradually improve. In the medium term, community e-commerce, live e-commerce and e-commerce going to sea still breed more structural growth opportunities. Suggestion: JD / pinduoduo / Alibaba.
4) advertising: short-term by the Kwai Tung economy, vertical industry regulation, algorithm / data superimposed regulatory impact, advertisers demand pressure, supply side advertising inventory or reduced, does not exclude some platform single quarter advertising negative growth, 2022H2 base adjustment, industry growth or gradually improve, it is recommended to focus on the platform that can maintain structural share growth: fast, beep.
Risk tips: 1. Overseas epidemic control is less than expected; 2. Sino US trade friction; 3. The risk of tightening Internet supervision; 4. The tightening of liquidity environment exceeded expectations; 5. Competition in overseas markets has intensified.
