On March 30, the three indexes collectively closed up. The first quarter of 2022 is coming to an end. On the whole, A-Shares have undergone significant adjustment. Looking forward to the second quarter, the investment strategy recently released by the institution is more optimistic, indicating that it focuses on the head enterprises with large correction range of early valuation, the high-profile industries verified in the earnings season and the main line of steady growth.
high quality company valuation attractive
On March 30, Shanghai Composite Index, Shenzhen Composite Index and gem index rose by 1.96%, 3.10% and 4.02% respectively. However, affected by external risk disturbance factors such as geopolitics and the expectation of the Federal Reserve to raise interest rates, the A-share market still experienced a significant adjustment in the first quarter. According to the data, as of the closing on March 30, the Shanghai index, Shenzhen Composite Index and gem index fell by 10.25%, 17.46% and 18.84% respectively during the year.
Northward funds also fluctuated greatly during the year. According to the data, as of the closing on March 30, the net sales of northbound funds during the year were 25.381 billion yuan. During the period from March 7 to March 16, northbound funds sold nearly 67 billion yuan for eight consecutive trading days. As the impact of various factors slowed down, the net purchase amount of northbound funds gradually rebounded in the following trading days. On March 30, BEIXIANG capital bought more than 12.7 billion yuan.
China Industrial Securities Co.Ltd(601377) believes that as the international situation becomes clearer, the Federal Reserve’s interest rate hike is in line with expectations, and positive progress has been made in the communication between regulators of China and the United States in terms of China concept shares. Recently, northward capital began to flow back, and the stage with the greatest impact of foreign capital may be over. In the medium and long term, under the current low allocation of foreign capital to a shares, the significant enhancement of the hedging attribute of RMB, and China’s sustained and stable fundamentals and investment environment, the inflow of foreign capital into A-Shares is still a long-term trend.
In addition, some insiders believe that with the deep adjustment in the early stage, the valuation of high-quality companies in some industries, including consumption and new energy, has become attractive. “After this period of decline, leading stocks in many industries have fallen out of value.” Yang Delong, chief economist of Qianhai open source fund, said, “the bottom grinding stage is relatively difficult, because at this time, the market has fallen more and rose less, but the moment of extreme pessimism in the market has passed. At this time, it is very important to maintain confidence and patience.”
“Many very high-quality growth stocks have adjusted a lot, but after investigation, most of their own performance expectations have not been revised, but many have strengthened their advantages in the industry.” Li Xiaoxing, managing director and fund manager of Yinhua Fund, believes that in the short term, the valuation contraction is coming to an end, and the overall A-share and some high-quality target valuations are at the historical average or even low position.
China International Capital Corporation Limited(601995) strategy team believes that the policy space for steady growth is relatively sufficient. Compared with the current high inflation in overseas markets and the tightening of monetary policy, China’s steady growth policy is relatively sufficient. Although there may still be a time lag from the introduction of the steady growth policy to the effect, in the general direction, China’s economic growth is expected to gradually improve after the second quarter of this year, and the second half of this year may be better than the first half. From a medium-term perspective, China’s stock market has more positive factors, and high-quality leading blue chips have midline investment value from a global perspective. Liu Yanchun, manager of Jingshun Great Wall Fund, also said that from a global perspective, the investment side lagging behind the recovery of consumption in 2022 is expected to gradually return to normal. It is expected that steady growth and boosting domestic demand will be the policy focus this year.
institutions are optimistic about two main lines
For the focus of the organization in the second quarter, the strategy report recently released by the organization shows that with the disclosure of the annual report of Listed Companies in April and the results of the first quarter, the prosperity of various industries will be confirmed. We can pay attention to the high prosperity sectors such as coal and nonferrous metals with rapid profit growth, as well as infrastructure and banks with steady growth.
The Milky Way Securities believes that with the gradual disclosure of earnings reports, the prosperity of various industries will be further confirmed. The current A valuation bubble has been squeezed, and the importance of value investing has been uplifted. It can be used to assess the value of stocks and make high-quality stocks with high profitability. The steady transmission of growth policies and the continuous upward movement of upstream resources prices need more time to determine the profitability of Listed Companies in the downstream.
Everbright Securities Company Limited(601788) also said that industries with good performance in the first quarter report may have better performance. On the one hand, according to the industry distribution of companies that previously disclosed the operating data from January to February, consumer industries such as food and beverage and medicine, as well as industries with steady growth direction such as construction and building materials, may have a good performance; On the other hand, from the comparison between the consistent market expectation and the profit growth rate of industrial enterprises from January to February, the expectation of most industries is high, while the expected growth rate of consumer goods industries such as food and beverage is more similar to that of industrial enterprises.
Guosheng Securities pointed out that with the epidemic gradually entering a controllable state and the profitability of enterprises in the first quarter exceeding market expectations, investors’ confidence in the market may gradually recover. In terms of operation, in the short term, under the background of reduced market risk appetite, we can pay attention to the real estate industry chain with reversal of difficulties, new energy infrastructure, banking and other industries with stable growth expectations, as well as coal, non-ferrous metals and other related sectors with annual report and first quarter report exceeding expectations; In the medium term, we can focus on the midstream and downstream manufacturing industries with improved corporate profits, such as new energy batteries, auto parts and other related industries.
Fu Jingtao, the chief analyst of this year’s strategy, maintained patience. In the second half of 2022, real estate sales, consumption and residents’ financial management are expected to accelerate the recovery, and the third quarter may be the time when the fundamentals are expected to improve. The new economic direction is focused on price increase (Baijiu, condiment), digital economy (computer), electronics (power semiconductor, consumer electronics), and medicine subdivision (COVID-19 epidemic prevention).
