At the beginning of the second quarter of 2022, a number of fund companies released the market outlook and investment strategy for the new quarter. The reporter combed these views and summarized the following points for your reference.
growth policy will be further strengthened
In terms of macro outlook, Jingshun Great Wall Fund pointed out that the epidemic and war have brought new challenges, and the steady growth policy will be further strengthened. On the whole, the policy cycle dislocation caused by China US economic cycle dislocation is still in progress. The United States has moved from overheating to stagflation and even recession, while China has gradually moved from a quasi stagflation and weak recession environment to recovery.
For the United States, anti inflation and preventing interest rate hikes from leading to economic recession are the focus of policy. For China, accelerating the pace of credit expansion and strengthening the actual pulling effect on the economy is the key to the current policy.
At present, China’s macro fundamentals are facing great challenges. On the one hand, it comes from the spread of the epidemic in China, on the other hand, it comes from the bulk cost pressure brought by the Russian Ukrainian war. However, the government work report gave confidence in the 5.5% growth target. On the 16th, the financial stability Commission of the State Council once again stressed “prudent introduction of policies with tightening effect” and “focusing on economic construction”. In the follow-up, it is expected to see more effective measures to promote “steady growth” in new energy infrastructure, traditional infrastructure, real estate, manufacturing and other industries.
In terms of China’s foreign economy, Boshi Fund pointed out that the improvement of the overseas epidemic has brought about a slight recovery of the economic boom in the United States and Europe in February. However, under the background of labor shortage, tight supply chain and limited production capacity, it is expected that the overseas boom in Q2 will continue to slow down from a high level in 2022.
Overseas consumption is gradually transforming from commodity consumption to service consumption. From the medium-term perspective, China’s exports will fall, and the external demand related to the epidemic is weakening. For example, the post real estate cycle and electronic exports have declined significantly.
As far as China is concerned, the central government’s position of stabilizing growth has not changed. The continuation and stabilization of the follow-up economy depends on the improvement of the epidemic in the short term and the real estate supply side in the longer term. In terms of the epidemic situation, by late March this year, 22 provinces, cities and autonomous regions had medium and high-risk areas. The complexity of the epidemic continues to have a negative impact on the economy in March and at least in the early second quarter.
Boshi Fund pointed out that the real estate supply side urgently needs to get out of the dilemma. At present, the real estate stall has been obvious. The growth rate of social finance slowed down in February, which is reflected in the negative growth of residents’ medium and long-term loan balance. There is no obvious sign of easing the supply side dilemma. At present, the overall leverage reduction of the real estate industry is structurally reflected in the gradual contraction, expansion or exit of private real estate companies. On the one hand, it affects the actual commencement and promotion. On the other hand, it affects the expectations of buyers and has an adverse impact on future house sales.
Qianhai open source Fund believes that the US economy and employment have continued to improve, but inflation has repeatedly hit new highs due to the conflict between Russia and Ukraine. In order to curb inflation, the Federal Reserve officially entered the interest rate hike cycle in March, raising interest rates by 25 bps Affected by the economic recovery, higher inflation and rising employment rate, the ECB will accelerate the end of the asset purchase plan.
According to the data of January and February, China’s economy rebounded slightly year-on-year; Specifically, production, consumption and investment data picked up, and export growth remained high; GDP growth in the first quarter is expected to be about 4.5%. According to the government working meeting and the meeting of the Finance Committee in March, monetary policy and fiscal policy will work together. It is expected that the economic data in the second quarter may remain stable, but attention should be paid to the repeated impact of the epidemic on the economy.
The National Bureau of Statistics recently released the latest economic index data. The official manufacturing PMI in March was 49.5, down from 50.2 last month. Overall, the manufacturing PMI in March showed the characteristics of weak supply and demand and increased cost pressure. Specifically, the production index in March was 49.5, down 0.9 percentage points, and the new order index was 48.8, down 1.9 percentage points, all falling to the contraction range. Geopolitical conflict led to the rise of global commodities. The purchase price index of raw materials in March was 66.1, up 6.1 percentage points from the previous month, and the cost pressure of downstream manufacturing industry further rose.
According to the analysis of the macro strategy Department of GF, the PMI breakdown data shows the negative impact of the epidemic impact. It is expected that the impact of the epidemic on the economy may last until late April, and the impact on the annual GDP is expected to be about 0.5%; The PMI in March has not fully reflected the impact of the epidemic, and there may still be downward pressure on the follow-up economy. Combined with the statement of the recent national standing committee meeting, it is expected that the follow-up policy efforts need to be further strengthened.
second quarter market tends to fluctuate
Fund companies generally believe that considering that various risk factors have been fully released in the early stage, the fluctuation of stock index in the second quarter will be reduced and the trend of bottom shock will be maintained.
Ping An Fund said that with the correction of the market, the valuation level of A-Shares further decreased, the systemic risk was basically released, and the cost performance of equity assets continued to highlight, with high long-term investment value.
From a global perspective, China’s asset allocation has obvious cost-effective advantages. According to the IMF forecast, China’s actual economic growth rate in 2022 will be about 4.8%, and will continue to lead major developed countries. At the same time, the valuation of the Shanghai index is only about 14 times, and the historical quantile has fallen to 37%, with obvious cost performance advantages.
In addition, from the perspective of large categories of assets, the cost performance of stocks and bonds has been at a relatively high level in history, basically at the historical bottom level at the beginning of 2012 and the end of 2018, and the valuation of a large number of assets has returned to a region with considerable cost performance.
In terms of policy, a special meeting of the finance committee was held on March 16 to make a very positive response to market concerns such as the expansion of credit, real estate, China concept shares, platform economy and the stability of Hong Kong’s financial market, so as to guide all parties to correctly grasp the current economic situation. At the same time, the meeting also stressed that relevant departments should earnestly assume their responsibilities, actively introduce policies conducive to the market and carefully introduce contractive policies.
From the perspective of the ternary paradox of “valuation certainty prosperity”, under the disturbance of overseas conflicts, high inflation and other factors, the growth center of the whole market performance slows down, which may pay more attention to the revaluation and the certainty of performance. The strategic idea of GARP / PEG may be dominant, that is, looking for companies underestimated by the market and with strong sustained and stable growth.
Boshi fund analysis said that in terms of the macro environment, the current stage is “stable credit / wide currency + weak economy”, and the quarterly dimension A shares have repeated bottom grinding demands. The implied ERP of Shanghai and Shenzhen 300 has been restored above the average, and the medium-term trend of ERP also depends on the subsequent economic growth trend.
From the perspective of rhythm, the annual U-shape of A-Shares and the beta opportunity of the index will be an important observation point in 2022 after the verification of “broad credit + bottom-up economy”. From the perspective of ERP, high dividends and market value are the cheapest in the past 10 years. Take advantage of the growth oversold rebound to adjust positions in the direction of high value dividends.
Qianhai open source Fund pointed out that from the perspective of the risk return of a shares, there was a downward trend in the first quarter, and the Shanghai index fell the least, at – 10.68%. In terms of market style, balanced style stocks fell the least, with an increase of – 5.17%. From the perspective of various industries, combined with the economic development and policy prediction in the fourth quarter, consumption, cycle, manufacturing and real estate are given over allocation rating as a whole, and other sectors are given standard allocation rating.
Wei Fengchun, chief economist of ChuangJin Hexin fund, believes that in terms of a shares, the market tends to fluctuate in the second quarter, first rising and then restraining. Before May, the probability of market opportunity is higher than that after that, we must still be vigilant against the downward movement of the withdrawal lower limit throughout the year. Inflation and steady growth in the second quarter are still important clues. It is suggested to focus on energy (coal and oil) and guard against the fluctuation risk caused by the easing of Russia and Ukraine in the short term; Pay attention to the real estate infrastructure chain, the real estate policy drive is obvious, and the verification of infrastructure fundamentals may be better than that of real estate; In terms of digital economy, pay attention to the theme of digital infrastructure and meta universe; Moderately pay attention to the agricultural pig chain.
The overall decline of the track in the long boom is still on the left, and the signal on the right has not yet appeared. In the pharmaceutical and biological sector, at present, the proportion of institutional positions is relatively low, the valuation is fully digested, and the rebound resistance is small, but it still needs time to grind the bottom. The sustainability of the rebound of lithium and photovoltaic needs to strengthen the improvement of industrial profit distribution pattern, and pay close attention to the potential impact of the anti globalization wave on the demand side expectation and the impact of capacity expansion on the supply and demand pattern.
multipoint layout and balanced configuration
In terms of specific investment direction, Ping An fund suggests multi-point layout and balanced allocation, focusing on the sectors or individual stocks with good demand certainty, little change in profit model but more decline in valuation, and the fundamentals may usher in an inflection point this year.
GF said that following the positive signal from the special meeting held by the financial stability and Development Commission of the State Council on March 16, the executive meeting of the State Council pointed out on March 29 that “we should strengthen confidence, stick to the annual development goals, and put steady growth in a more prominent position”. The positive signal was further released.
The “policy bottom” is often ahead of the “market bottom”. In the process of continuous release of positive policy signals, the market is expected to gradually establish the bottom. At present, A-Shares already have relatively good medium and long-term allocation value. Since the quarterly report period began in April, the stock price is expected to return to fundamentals. At present, the first quarterly report performance of upstream resource products and new energy related sub industries benefiting from the rise in commodity prices may have advantages. In addition, the beneficiary varieties of “steady growth” are also expected to perform.
Wei Fengchun said that through the macro industry top-down analysis, the overall idea of industry configuration in the second quarter is to repair the market, stage configuration and safety is the main line.
In the second quarter, the external disturbance gradually eased, the steady growth policy continued to work, and the current market sentiment and valuation were also adjusted in place. On the whole, it was a rebound market with restored confidence. In terms of structure, major industries have certain defects in the dimensions of medium and long-term logic, prosperity factor and transaction factor. It is expected that it is difficult to have a consistent leading main line in the second quarter. The industry rotation is fast in shock repair, so it is very difficult to grasp these opportunities. In the face of great uncertainty, security is certain, which will become the main line of configuration in the second quarter. This includes energy security, economic security, food security, etc.
“In addition, the long-term logic of photovoltaic, digital economy and advanced manufacturing related industries is more smooth, with the value of strategic allocation, which is in line with our allocation logic of appropriate quantity and quality, which is also to prepare for the layout and growth after the completion of the mission of dividend low wave strategy.” Wei Fengchun said.
In terms of allocation direction, GF suggests that if the subsequent commodity prices fall steadily, it can focus on the two main lines of “high prosperity and high growth” and “stable growth of undervalued value”. When the economy is under great pressure, the growth style of low sensitivity has certain advantages. In the past two quarters, the prosperity of some industries has deviated significantly from the stock price. After the valuation has been digested, they may return to the main line of growth and resist the downward pressure of the economy and the contraction pressure of valuation in overseas markets with high growth rate.
In terms of industry allocation, Golden Eagle Fund suggests to maintain the balanced allocation of “steady growth + technology”. Under the epidemic situation and external economic pressure, the steady growth policy will continue to work. Before the follow-up policies are implemented and effective, they can still participate in bargain hunting. From bottom to top, focus on the technology sector with cost-effective valuation. After experiencing the sharp impact of capital and emotion, focus on the high boom sector or boom improvement direction with sustained high performance growth and better cost performance shown in the first quarterly report. In the subsequent possible repair process of the market, the configuration value of these important directions is expected to be recognized by the market first.
Looking ahead, Jingshun Great Wall Fund judges that after China’s economy stabilizes, the pricing focus of the A-share market will return to the molecular profit growth. At this time, the impact of overseas liquidity may be more phased.
First of all, China’s credit monetary policy is the starting point of each round of economic expansion cycle. The bottom of this round of credit cycle has been basically established in the fourth quarter of last year. 21q4-22q1 is the process of policy transmission to profit. According to historical experience, at this stage, risk aversion is generally dominant, and undervalued blue chips are dominant. Once the bottom of profit is gradually confirmed, the sectors with profit elasticity and long-term space in the market will be dominated again, typically such as technology, consumption and medical treatment. This time point is expected to be gradually reflected after the second quarter.
Secondly, in this round of economic downturn cycle, there are still some high boom sectors with independent logic, such as photovoltaic and lithium batteries benefiting from the global new energy cycle, CXO, API and traditional Chinese medicine of covid-19 pharmaceutical industry chain. After the systematic valuation risk since the beginning of the year, the scarcity of these high boom sectors will probably regain the favor of funds.
In general: on the one hand, focus on high cost performance assets with both prosperity and valuation, and select segments with high profit growth in track such as photovoltaic, lithium battery, automotive electronics, semiconductor and medicine; Home furnishing, ROE, is also gradually being allocated to consumers, such as Baijiu, beer, tax-free, home, and so on. At the same time, we can also pay attention to the further relaxation of real estate policy under the background of steady growth, and the valuation and repair opportunities of real estate leaders of state-owned enterprises and high-quality private enterprises.
waiting for the inflection point of Hong Kong stocks
The Hong Kong stock market was poor in the first quarter, with the Hang Seng index rising by – 11.3%. Looking forward to the second quarter, Qianhai open source Fund said that it would not be particularly optimistic about Hong Kong stocks, but there was no need to be overly pessimistic. The outbreak of the local epidemic in Hong Kong, the unclear international situation, high inflation and strong risk aversion of the US dollar; In addition, China’s unclear industrial policies, economic slowdown and even doubts about economic growth goals have resulted in poor market participation and sentiment in the short term.
Qianhai open source Fund believes that because of this, the valuation of many excellent companies has reached an all-time low. Therefore, we can not be so desperate now and wait for the arrival of clear inflection points such as the relaxation of regulatory policies, the reversal of the overall economic slowdown and the easing of the international situation.
According to the analysis of Jingshun Great Wall Fund, the weight of the Hong Kong stock market is mostly exposed to Internet technology, finance, real estate, consumer medicine and other sectors. These weight sectors have been suppressed by regulatory policies such as platform economy since last year, and have been impacted by the expectation of overseas liquidity tightening since this year. At the current time point, the adverse factors of Hong Kong stock related sectors have been reflected for nearly a year, and there are some positive information at the policy level.
In terms of Hong Kong stocks, Boshi Fund said that in the second quarter, it is recommended to pay attention to photovoltaic wind power and energy metals, which are currently at a high economic level and have continuity, as well as upstream resource products benefiting from high overseas inflation.
Wei Fengchun suggested that Hong Kong stocks should not catch up in the short term. The probability of V-shaped reversal is small, waiting for the allocation opportunities brought by the shock and grinding bottom, and appropriately participating in the trading opportunities of platform economic policies.
