Strategy: turn positive
There was no "spring agitation" expected by the market in 2022. Since the beginning of the year, the rising interest rate of US bonds, the escalation of the conflict between Russia and Ukraine, the repeated fluctuations of China's economic and policy expectations and other factors have continued to impact, suppressing the risk appetite of the stock market. Only "Yindi coal" in A-share Q1 maintained a positive return, and more than half of the industry fell by more than 10%.
The above impact is gradually digested by the market. At present, it is suggested to remain positive, which stems from the improvement at three levels. First, the direction of policy easing was further established. Previously, the market had doubts about the sustainability of policy relaxation. The financial committee meeting on March 16 stabilized market expectations, and the national standing committee meeting on March 21 mentioned monetary policy for the first time this year. The expression of the regular meeting of the central bank in the first quarter was significantly relaxed compared with that in the fourth quarter. Second, the micro liquidity of A-share market is improved. The liquidity environment of Q1A share market is relatively unfavorable, and both northbound and EFT have experienced significant outflows. However, in the past two weeks, liquidity has continued to improve, especially the historical inflection point of northward funds; Third, despite the impact of the epidemic on the economy, some industries have bucked the trend. From the perspective of industrial enterprises, the high-frequency data from January to February show that profits are gradually transferred to upstream resources. The annual report of 2021 and the first quarter report of 2022 also point to the improvement of the performance of upstream resource products. From the perspective of consumer industry, some subdivided industries benefit from the improvement of industry competition pattern. For example, textile (cotton price rise, cost rigidity), Shenzhen Agricultural Products Group Co.Ltd(000061) (Russia Ukraine conflict intensifies, supply shortage), dairy products (cost decline, strong demand). Compared with the performance growth rate and valuation quantile of the industry where A-share listed companies are located, most industries are already in the range with allocation value. That is, the predicted annual growth rate in the next two years is higher than 50%, and the valuation quantile is lower than 50%, which has the configuration cost performance.
Industry configuration:
1) the performance advantages of upstream resource products continue to highlight and continue to recommend coal and aluminum driven by "price difference": in the previous report, we proposed that "the price difference outside China of some resource products is obvious. Chinese production enterprises are expected to benefit, including aluminum and coal". At present, the aluminum Shanghai Lun ratio and the internal and external price difference of coal are still about 10% and 25% respectively from before the conflict between Russia and Ukraine. It is suggested to continue to pay attention to the investment opportunities of coal and aluminum.
2) industry driven by "policy": real estate; The real estate industry has valuation repair space due to the relaxation of policy margin, and the current market is not over yet.
3) middle and lower reaches industries benefiting from the improvement of industrial structure: textile manufacturing benefiting from the rise of cotton prices; Agriculture in which the imbalance between supply and demand drives the price rise effect (soybean and pig breeding); Shipping ports benefiting from European and American sanctions against Russia and the increase of maritime energy demand; In addition, there are electrical equipment benefiting from the high prosperity of the new energy industry.
Risk tip: there are errors in data statistics, the economy is less than expected, the policy is more than expected, and the market fluctuation is more than expected.
