In March, the computer sector decreased by 11.6%, underperforming the gem index / Shanghai Composite Index by 5.53/3.90 percentage points respectively, ranking 26 / 29 in the primary industry. The industry valuation hit the bottom, and the market growth of the whole year is highly deterministic. It is optimistic about the benefit probability of medium-term allocation, and it is recommended to add allocation.
The valuation of the industry has hit the bottom, and the market is expected to rebound. The valuation of the computer sector continued to callback, and the overvalued stocks continued to digest. The current industry dynamic PE is 43 times, which is still at the bottom of 2-year period (0%) and 5-year period (7%). The industry valuation in 2019 was slightly lower than that at present, and then opened a bull market for two years. Therefore, it is optimistic about the medium-term benefit probability of the current industry configuration. It is suggested to pay attention to the fields of network security, CIPS system and domestic information innovation.
Market review in March: the key sub sectors all decreased, among which the decline was followed by smart city (- 3.13%), information security (- 4.60%), e-government (- 5.15%), financial technology (- 5.99%), and the decline was better than that of the industry. Industrial Internet (- 12.56%) led the decline, showing the characteristics of continuous digestion of overvalued stocks. The theme of electronic ID card is outstanding. Affected by Li Keqiang's statement on promoting the landing of electronic ID cards during the year, concept stocks such as Linewell Software Co.Ltd(603636) (+ 47.3%), Shenzhen Emperor Technology Company Limited(300546) (+ 45.7%), Beijing Egova Co.Ltd(300075) (+ 26.72%) led the rise. Standard Test Leader Chengdu Jafaantai Education Technology Co.Ltd(300559) increased by 45.35% in the month due to the opening of test room construction and high Q1 performance.
Q1 performance is less representative, but it can boost confidence. Q1 performance generally accounts for a low proportion, but high growth stocks are easy to regain interest in capital. We can focus on companies that are expected to achieve high growth in the first quarter, such as Beijing Zuojiang Technology Co.Ltd(300799) , Chengdu Jafaantai Education Technology Co.Ltd(300559) , New Trend International Logis-Tech Co.Ltd(300532) , Qi An Xin Technology Group Inc(688561) , Ygsoft Inc(002063) , Beijing Baolande Software Corporation(688058) , Beijing Vastdata Technology Co.Ltd(603138) , etc. At the same time, pay attention to oversold stocks.
Investment suggestions: recommend Inspur Electronic Information Industry Co.Ltd(000977) , Beijing Kingsoft Office Software Inc(688111) , Xiamen Meiya Pico Information Co.Ltd(300188) , Yonyou Network Technology Co.Ltd(600588) .
Risk warning: the policy is not as expected; The epidemic repeatedly exceeded expectations.
