With the continuous adjustment of the market, both the position changes of public funds in the fourth quarter of last year and the latest position changes of foreign capital since this year reflect that companies with high prosperity and high growth are more likely to obtain capital favor.
Since the market shock correction after the Spring Festival last year, blue chip value stocks have temporarily stopped the pace of rapid expansion, while small and medium-sized market value growth stocks represented by CSI 500 have performed relatively stronger in the shock market.
Combined with the policy, it is not difficult to see that the state’s active guidance on the direction of science and technology continues to improve the valuation space of growth stocks to a certain extent. Subsequently, institutional funds have also turned their attention to growth companies with higher scientific and technological attributes. Whether the position change of public funds in the fourth quarter of last year or the latest position change of foreign capital since this year, the allocation proportion has been further improved for high boom and high growth enterprises.
investment style shifts to growth stocks
As of March 30, of the 51 trading days completed this year, only January 26 saw the transaction amount fall below 800 billion yuan, and the single day transaction amount of as many as 27 trading days exceeded trillion yuan. Of course, although the daily transaction scale remained around trillion yuan during the year, the market bullish confidence was still low. During this period, the Shanghai Stock Index retreated by 10.65%.
In the context of insufficient confidence in China’s economy and market, the situation in Russia and Ukraine, global economic stagflation, rising US bond interest rates and other factors are also constantly affecting market sentiment. At the same time, superimposed on the recent concentrated selling of foreign capital (the cumulative net outflow of funds from the north since March was 45.083 billion yuan), A-Shares were sharply corrected in early March. Market confidence was not restored until the meeting of the financial committee of the State Council on March 16. As of March 31, the Shanghai Composite Index rose 6.14% in 12 trading days.
It is worth mentioning that if A-share enterprises are classified and counted, regardless of the overall correction during the year or the recent repair rebound, the growth sector shows an advantage over the value sector. Statistics show that during the year, while the Shanghai index retreated by 10.65%, the Shanghai and Shenzhen 300 index represented by blue chip value stocks retreated by 14.53%, and the China Securities 500 index represented by small and medium-sized market value growth stocks retreated by 14.06%. In the rebound since March 16, while the Shanghai index rose 6.14%, the CSI 300 index and the CSI 500 index gained 5.99% and 6.03% respectively.
If the statistical time is further extended, this feature has been gradually formed since the Spring Festival last year. During the period from February 18 to December 31, 2021, the Shanghai stock index slightly retreated by 0.42%, during which the CSI 300 index fell by 14.93%, while the CSI 500 index rose by 12.78% in the same period. The overall situation reflects that the performance of growth stocks has certain advantages over value stocks in the period of increased economic fluctuations or rapid decline.
From the historical data of a shares, there has always been a periodic rotation between value stocks and growth stocks. From 2000 to 2007, blue chip value stocks dominated; From 2008 to 2015, small cap growth stocks rose; From 2016 to 2020, blue chips staged a “strong return of the king”. After the Spring Festival in 2021, the performance of growth stocks is better than that of value blue chips. This situation may mean that this round of market will be a pattern of “blue chips + growth singing”.
institutional funds increase allocation of growth stocks
The performance of market trend is often closely related to the attitude of institutional funds. At present, the annual report of Listed Companies in 2021 is still being disclosed. According to the statistics of heavy positions of public funds in the fourth quarter of 2021 published in advance, although most of the objects with the heaviest positions are still from Shanghai and Shenzhen 300 blue chips, for example, according to the statistics of market value of positions, equity funds only hold more than 100 billion yuan in Kweichow Moutai Co.Ltd(600519) , Contemporary Amperex Technology Co.Limited(300750) and 50 of the 60 shares with positions of more than 10 billion yuan in Shanghai and Shenzhen 300, There are only 3 growth targets of CSI 500. However, if compared with the position at the end of the third quarter of last year, it can be seen that most of the blue chip value stocks were reduced, while the proportion of shares held by the target companies China Zhenhua (Group) Science & Technology Co.Ltd(000733) , Porton Pharma Solutions Ltd(300363) , Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , which were held by public funds with a market value of more than 10 billion yuan at the end of the fourth quarter, was further higher than that at the end of the third quarter.
According to the statistics of all 300 target companies in Shanghai and Shenzhen by red weekly, 276 companies entered the list of the top ten heavy positions of public funds at the end of the fourth quarter of 2021, but compared with the end of the third quarter, only 120 companies continued to increase their holdings, accounting for 43.48%; Among all the companies subject to the CSI 500 index, 325 were selected as the top 10 heavy positions of public funds at the end of the fourth quarter, compared with 174 at the end of the third quarter, accounting for 53.54%. It can be seen that the attitude of public funds during the fourth quarter was obviously biased towards growth companies. Among individual stocks, such as chip company Verisilicon Microelectronics (Shanghai) Co.Ltd(688521) -u, virtual reality concept stock Ninestar Corporation(002180) , energy storage concept stock Jiangsu Zhongtian Technology Co.Ltd(600522) etc., the position proportion of public funds at the end of the fourth quarter was significantly higher than that at the end of the third quarter.
In addition to China’s public funds, the position data of foreign capital are disclosed more timely. Statistics show that since this year, the core assets have also suffered a large-scale reduction of foreign capital. Although the weighted blue chips Kweichow Moutai Co.Ltd(600519) , Contemporary Amperex Technology Co.Limited(300750) are still the “ballast” of foreign capital allocation in terms of market value, and the latest market value of holdings is as high as 135266 billion yuan and 107916 billion yuan respectively, the number of holdings has decreased significantly compared with the data at the end of 2021. The latest data are 816787 million shares and 2221772 million shares respectively, while at the end of 2021, the foreign capital’s holdings in the two companies are 896818 million shares and 2425607 million shares respectively. If we further check the historical data, the peak value of Kweichow Moutai Co.Ltd(600519) held by foreign capital appears on March 5, 2019, and the number of shares held on that day is as high as 1369711 million shares; The peak holding of Contemporary Amperex Technology Co.Limited(300750) was on January 5 this year, and the number of shares held on that day was 243453600 shares.
What is different from the above is that at present, the number of shares held by foreign capital in Jiangsu Zhongtian Technology Co.Ltd(600522) , Joincare Pharmaceutical Group Industry Co.Ltd(600380) , Ming Yang Smart Energy Group Limited(601615) , Zhejiang Crystal-Optech Co.Ltd(002273) and other CSI 500 target companies has increased significantly compared with the end of last year.
Statistics also show that since this year, foreign capital has increased its holdings in many “specialized and special new” enterprises, such as semiconductor equipment company Pnc Process Systems Co.Ltd(603690) . At the end of last year, foreign capital only held 4.9101 million shares of the company, which has rapidly increased to 102558 million shares according to the latest statistics. For Shenzhen Dynanonic Co.Ltd(300769) , Hangzhou Chang Chuan Technology Co.Ltd(300604) , Zhejiang Wolwo Bio-Pharmaceutical Co.Ltd(300357) , Sinoseal Holding Co.Ltd(300470) , Kbc Corporation Ltd(688598) and other enterprises that are also defined as “specialized and special new”, the latest number of foreign shares also increased significantly compared with the end of last year.
Yu Dingheng, chairman of Shenzhen Yihu investment, told the reporter of red weekly that in order to solve the current urgent problems of “making up for weaknesses” and “sticking neck”, it is of great significance to promote the strategy of building a strong manufacturing country. “Specialization and innovation” as a policy orientation, has many application scenarios and favorable policies in the long run. Under the background trend of digital development and domestic substitution, The specialized new “little giant” with good track space and growth still deserves special attention.
growth stocks have greater flexibility in performance growth
In addition to the gradual shift of institutional attitude, according to the fundamental statistics, taking the latest closing price as the benchmark, the dynamic P / E ratio of the CSI 300 index is 11.71 times and the dynamic P / E ratio of the CSI 500 index is 15.84 times. In absolute terms, the valuation of value stocks seems to have more advantages. However, in combination with growth, in the first three full reporting periods of 2021, the overall growth rate of net profit of CSI 300 target companies was 34.97%, 32.67% and 19.13% respectively, while the overall growth rate of net profit of CSI 500 index companies was 95.46%, 53.39% and 37.55% respectively. On the whole, the performance growth rate of growth companies is significantly better than that of value companies.
According to the statistics of the published annual report or performance express of 2021, at present, 200 Shanghai and Shenzhen 300 blue chips have achieved a total net profit of 3238505 billion yuan, an increase of 16.2% year-on-year over 2020; 259 CSI 500 growth stocks achieved a total net profit of 398218 billion yuan, a year-on-year increase of 32.13% over 2020. Therefore, the overall growth rate of growth stocks will continue to be better than that of value stocks in 2021. At present, there are 31 companies in the Shanghai and Shenzhen stock index, accounting for 31.5 times of the annual net profit in 2021. Among them, benefiting from the sharp rise in freight rates, Cosco Shipping Holdings Co.Ltd(601919) achieved the best annual performance in history, and the net profit of 89.296 billion yuan increased by 799.52% year-on-year. In contrast, among the target companies of the CSI 500 index with a small total share capital, 45 companies doubled their net profits, accounting for 17.37% of the companies that have published their annual reports in the current sector. Among them, due to the increase of product sales price, the net profit of Sichuan Hebang Biotechnology Co.Ltd(603077) whole year soared by 728428%; Benefiting from the simultaneous rise of volume and price and the strong demand of Xinjiang Zhongtai Chenical Co.Ltd(002092) , Ingenic Semiconductor Co.Ltd(300223) , the annual net profit also increased significantly year-on-year by 176996% and 117408% respectively.
With the end of the first quarter of 2022, as of March 31, 160 companies have predicted the performance of the first quarter of this year in advance in the form of notice. Combined with the notice, the number of disclosure of small and medium-sized growth stocks is significantly more. At present, the company with the highest pre increase rate is Zhejiang Damon Technology Co.Ltd(688360) , a science and innovation board company with a market value of only 2.013 billion yuan. The company announced on March 31 that with the continuous completion of overseas projects and the recognition of income, the company’s net profit in the first quarter of this year increased by 342605% ~ 483645% year-on-year. Or stimulated by the good news, the company’s share price rose 12.47% on the day of the announcement. In addition, among the companies subject to the CSI 500 index, Hubei Xingfa Chemicals Group Co.Ltd(600141) , Porton Pharma Solutions Ltd(300363) , Shenzhen Capchem Technology.Ltd(300037) , Yankuang energy, Ningbo Shanshan Co.Ltd(600884) and other companies benefited from the improvement of the prosperity of their industries, and their net profits were expected to double in the first quarter of this year.
April is about to enter the intensive disclosure period of the first quarterly report of listed companies, and the performance of upstream resource products continues to grow rapidly, which is basically determined in advance. If the fundamentals of the high boom track can continue to be positively verified and the performance growth exceeds expectations, the market style is still expected to continue to tilt towards growth companies.
Tong Diyi, general manager of longying fuze asset management company, told the reporter of red weekly that from the perspective of historical relative valuation, both the value blue chip sector and the growth sector are not expensive at present. If the subsequent market stabilizes, the phased elasticity of growth stocks will be greater.
