The inflection point of Shanghai epidemic is approaching, and it is expected that the social aspect will be cleared gradually; This round of epidemic has seriously dragged down the economy, and it is difficult for growth to return to the target level in the first half of the year. It is expected that policies related to expanding investment in the second quarter will be strengthened and accelerated, and supply chain dredging and consumption stimulation will be carried out at the same time; Due to the epidemic, the medium-term repair market has been delayed, but the stable growth market will be more clear and lasting. First of all, under the trend of the sharp decline of the propagation coefficient and the sharp rise of the shelter capacity, it is expected that Shanghai will basically achieve the goal of social clearance around April 20. Secondly, the economic situation in the first quarter of this year is expected to be weaker than that in the third quarter of 2021. At the same time, under the influence of the epidemic, the economy is expected to continue to be under pressure in the second quarter, and the negative impact is not weaker than that in the first quarter. Finally, the policy of stabilizing the real estate and service industry is expected to speed up. At present, all departments focus on dredging the supply chain and industrial production in the Yangtze River Delta. After the epidemic is controlled, it is expected that the policy will comprehensively increase and stimulate consumption according to the damage. At present, monetary easing such as reducing reserve requirements and interest rates is difficult to directly alleviate the concerns of investors. The market is still waiting for the inflection point of the epidemic and the resumption of work and production. The medium-term repair market may be delayed, but the pessimistic expectation has been fully released and the market is imminent. It is suggested to strengthen the main line of steady growth and lay out varieties with low valuation and expected low.
Shanghai epidemic inflection point is approaching, and it is expected that social aspects will be cleared gradually soon
After reaching the peak of daily positive cases on April 13, the number of daily new cases in Shanghai has begun to decline slowly. As of April 16, the number of daily new cases in other districts except Hongkou District and Jing’an District has been below the peak for 3-10 consecutive days. Since Shanghai announced the adoption of global static management on March 30, the proportion of positive cases outside the isolation control area has been declining, from 20.4% to 3.1% on April 16, maintaining a low level of 3% ~ 4% for six consecutive days. The number of asymptomatic infected persons and cured discharged cases who have been released from medical observation is increasing, the turnover rate of the shelter is significantly accelerating, and the number of daily medical observation has begun to approach the number of daily new cases. According to the report of China Central Television, the capacity of the shelter in Shanghai has exceeded 270000 beds, the actual implementation and implementation efficiency of the “four should and four do’s” will also be improved, and the risk of community communication will be rapidly reduced. On April 15, sun Chunlan, vice premier of the State Council, said in an interview with China Central Television that the transmission index of the epidemic had dropped from 2.27 to 1.23, “the goal of clearing the social surface at an early date is just around the corner”. Considering the trend of positive number outside the isolation control area, the decline of transmission coefficient and the increase of shelter capacity, we expect Shanghai to basically achieve the goal of social clearance around April 20
epidemic has seriously dragged down the economy, and it is difficult for growth to return to the target level in the first half of the year
1) the economic situation in the first quarter is expected to be weaker than that in the third quarter of 202 73 since the middle of March, the number of covid-19 positive and close contacts in Jilin Province, Shanghai and other places in a single day has remained at a high level. Superimposed on the continuous upgrading of epidemic control measures and the rising international energy prices, it is expected that China’s industrial production and consumption and other economic indicators in the first quarter will be significantly negatively impacted The macro group of Citic Securities Company Limited(600030) Research Department predicts that the year-on-year growth rate of industrial added value will fall to about 5.5% in March, and the consumption growth rate will quickly fall back to the zero growth level. The current epidemic and other adverse factors may drag down the GDP growth rate by 0.5 to 1 percentage point in the first quarter. The GDP growth rate in the first quarter of this year is expected to be about 4.6%. Overall, under the unexpected impact of the epidemic, the overall economic situation in the first quarter of this year may be weaker than that in the third quarter of 2021, breaking the trend of quarterly recovery driven by the original steady growth policy.
2) under the influence of the epidemic, the economy continued to be under pressure in the second quarter, and the negative impact was no weaker than that in the first quarter In terms of consumption, since April, the total number of close contacts in China has remained above 430000, and the number of new local positive cases in China on that day is at the level of 24000. The important data of the two epidemics are significantly higher than that in March. It is expected that China’s consumption growth rate will continue to show a downward trend, and social zero may have a negative growth in a single month. In terms of export, Shanghai’s main export commodities, including automobiles, ships and integrated circuits, account for 7% of the country. Considering that the traffic and logistics control measures in the Yangtze River Delta have been continuously upgraded since April, which limits the normal operation and production of China’s supply chain and affects the replenishment of China’s port export supply, the export in April may fall significantly compared with March, and seriously drag down the export in the second quarter. In terms of industrial production, the obstruction of transportation and logistics may have a very adverse impact. In the first half of April, the national vehicle freight flow index fell by 8.5%, of which Shanghai, Jiangsu, Shandong, Shanxi and Guangdong and other cities and provinces affected by the epidemic had fallen by 71.4%, 21.9%, 9.1%, 36.8% and 6.3% respectively as of April 16
it is expected to expand investment related policies in the second quarter increase efforts accelerate supply chain dredging and consumption stimulation
1) the policy of stabilizing the real estate and service industry is expected to speed up real estate policy: in the second quarter, more direct support was given to the financing of real estate developers. Due to the significant easing of restrictions in the field of real estate due to urban policies, it is still the main starting point. In the future, the strength and accuracy of the supporting policies for the supply side and demand side of the real estate industry will continue to improve, and the number of cities implementing the relaxation policies in the real estate industry will further increase. The macro group of Citic Securities Company Limited(600030) research department believes that the downward risk of the real estate industry is expected to be alleviated in the future, and the real estate sales situation is expected to be improved in the next 1-2 months. Under the influence of the epidemic, Shenzhen, Shanghai, Jilin and Suzhou have successively introduced rescue measures for the service industry. However, with the long-term stagnation of the service industry in Shanghai and other places, even if the isolation and control measures are gradually liberalized in the future, in the face of the wages to be paid, the rent to be delayed and repaid and the loans in the previous stagnation stage, a large number of businesses may lack the initial cash flow and invested capital to resume work, and there is an urgent need for financial assistance More direct relief policies such as resumption subsidies and capital injection of government guidance funds. At the same time, in the face of future normalized high-intensity prevention measures, long-term policy subsidy guidelines are also needed to restore the confidence of enterprises to resume work.
2) at present, all departments focus on dredging the supply chain and industrial production in the Yangtze River Delta recently, vice premier Liu he presided over a special meeting on ensuring smooth logistics and the stability of industrial chain supply chain. On April 15, the people’s Bank of China, the Ministry of industry and information technology, the Ministry of transport and other departments held meetings respectively to convey the spirit of the special meeting of the State Council and study and implement work measures. On April 16, the Shanghai Economic and Information Technology Commission issued the guidelines for the prevention and control of the epidemic situation of resumption of work and production of industrial enterprises in Shanghai (the first edition), guiding enterprises to “one enterprise and one policy” and ensuring the orderly resumption of work and production under the premise of controllable risk.
After the intervention of relevant departments, the logistics efficiency began to rise slowly. From the national freight situation, the freight flow index of the whole country, Jiangsu and Zhejiang rebounded slowly from April 7. In Shanghai, which was most seriously affected by the epidemic, the vehicle freight index increased by 34.8% the next day after bottoming on April 13, and also began to rebound.
3) after the epidemic situation in the Yangtze River Delta is controlled, it is expected that the policy will comprehensively increase and stimulate consumption according to the damage since the outbreak of the epidemic in the Yangtze River Delta in late March, the relevant relief policies have still lagged behind. The core reason is that the service-oriented consumption industry is relatively dependent on fixed consumption scenarios. When the epidemic has not been fully controlled, the service industry has not resumed production and work, the consumption scenario has not been opened, and the traditional stimulus policies such as subsidies / issuance of consumption vouchers lack focus, It is difficult for policymakers to grasp the scale and intensity of subsidy stimulus. Therefore, different from the rhythm expected by investors, the introduction of relevant stimulus policies for consumption is bound to lag behind after the epidemic has been effectively controlled. We believe that the rescue policy for the service industry is not stagnant in the decision-making process, but the best time has not come. It is expected that after this round of epidemic has been effectively controlled and gradually returned to work and production, governments at all levels will comprehensively increase the measures to stimulate consumption according to the damage assessment.
due to the epidemic situation, the mid-term repair market has been delayed, but the stable growth market will be more clear and lasting
1) monetary easing such as reducing reserve requirements and interest rates is difficult to directly alleviate the concerns of investors, and the market is still waiting for the inflection point of the epidemic and the resumption of work and production The epidemic and the uncertainty of economic recovery have systematically reduced the risk appetite of investors. The number of new positive cases in Shanghai hovered at a high level and showed no sign of peaking until around the 15th. Since mid March, the damaged industries in the Yangtze River Delta are not only concentrated in consumer industries such as catering services, but also facing the pressure of shutdown due to supply chain problems in high-end manufacturing industries such as automobiles and semiconductors. Relevant information such as out of stock and possible shutdown has been intensively projected into the capital market recently, resulting in continued caution and panic. In this case, monetary easing measures such as reducing reserve requirements and interest rates are difficult to directly alleviate investors’ concerns, and the transmission effect is relatively blocked, which has limited effect on stimulating market risk appetite. Overseas long-term institutions represented by configuration foreign capital slowed down the inflow pace again in the first two weeks of April, with a net outflow of 800 million yuan and 1.4 billion yuan respectively, indicating their low willingness to allocate A-Shares in the near future.
2) the pessimistic expectation has been fully released and the market is ready to explode according to the survey data of Citic Securities Company Limited(600030) channels, the position of small and medium-sized private equity institutions also decreased by 4 percentage points last week. At present, the position has decreased from 80% at the beginning of the year to around 66%, which is the relative low point in the past five years and only higher than that in the third quarter of 2018, indicating that China’s most active funds still choose to continue to reduce their positions and avoid risks. However, the low position also shows that the pessimistic expectation of the market has been fully reflected in the stock market. The market is not short of money, and any positive signal can trigger the rapid inflow of incremental funds. On Tuesday, it was rumored that China had carried out pilot projects to relax epidemic prevention policies in eight cities including Shanghai, Guangzhou, Xiamen and Chengdu. The catering tourism index rose rapidly and in large quantities within the day. The index rose 9.67% on the day, and the turnover was + 57.4% compared with the previous trading day. On Friday, rumors that some Shanghai auto manufacturers were ready to resume work and production in advance also triggered a rapid rebound in stocks related to the auto industry chain. The CITIC auto parts index closed up 2.62% on the same day, with a turnover of + 66.2% compared with the previous trading day.
3) stick to the main line of stable growth market and lay out varieties with low valuation and expected low epidemic situation and policy lag delayed the mid-term repair market in the second and third quarters, but did not change the trend. Pessimistic expectations have been fully released, and the market is imminent. The inflection point of epidemic situation and resumption of work and production are the most critical market inflection points. In terms of configuration, it’s recommended to stick to the main line of steady growth, focus on the real estate industry chain, and focus on the real estate industry chain. At the same time, the layout will continue around “Two Lows”. Specifically including: varieties with relatively low valuations, it’s recommended to focus on varieties with relatively low valuations, it’s recommended to focus on \ communication operator , New infrastructure in the new infrastructure field enterprises. Varieties whose fundamentals are expected to be relatively low on the list, focusing on mid stream manufacturing, which is constrained by supply chains and costs, and focusing on the opportunities for configuration after the problem is resolved, such as 123 6 hotels and department stores . In addition, the recent focus can be focused on a quarterly expected to exceed the expected variety, and it is recommended to focus on photovoltaic, semiconductor, Baijiu, Chinese medicine, building sector.
risk factors
Repeated outbreaks; The friction between China and the United States in the field of science and technology trade has intensified; The progress of China’s policy and economic recovery is less than expected; Macro liquidity at home and abroad has tightened more than expected; The conflict between Russia and Ukraine further escalated.
