review: since November 2021, the judgment style has switched to the direction of steady growth such as financial real estate, and the real estate of state-owned enterprises has been the first direction. So far, the excess return has been significant. The "week of February 13, 2023" is the last time of panic.
Outlook: from a number of indicators, the market pessimistic expectation has been largely reflected in the stock price. In the future, the market will shift from overall adjustment to structural differentiation. It is suggested to focus on three directions
recently, the rapid depreciation of RMB exchange rate has disturbed the market again. However, from the following three aspects, we believe that it is not a systemic risk, but more a short-term emotional shock: 1) foreign capital is not far away, but still flowing in historically, the devaluation of RMB and the outflow of foreign capital have shown strong directionality. Previously, in March, due to the Fed's interest rate hike, the appreciation of the US dollar and the depreciation of the RMB, foreign capital once flowed out sharply. However, in the near future, even if the RMB exchange rate depreciates rapidly, the capital of land stock connect going north is still flowing in as a whole 2) China's policy is "self dominated", and the devaluation of RMB does not constitute a restriction on monetary easing 2021 from the beginning of the central bank's monetary policy report in the third quarter of 2021, China's monetary policy has always emphasized "focusing on me". Since the beginning of this year, the determination of the decision-making level to "stabilize growth" has been repeatedly confirmed from the two sessions, the financial committee meeting and the national standing committee meeting. The follow-up monetary and credit policies are expected to be further relaxed to provide strong support for stabilizing the macro-economic market 3) with the continuous promotion of enterprises' resumption of work and production and the gradual easing of the impact of the epidemic on the supply chain, exports are expected to pick up and continue to support the demand for RMB, and the pressure of RMB devaluation will also be weakened Since 3 month, the epidemic has broken out in many places in China. One of the core reasons for the current round of RMB devaluation is the slowdown of export growth, the loss of overseas orders and the reduction of RMB demand due to the strengthened closure and control of the epidemic, the shutdown of enterprises and the blockage of supply chain. Recently, the decision-making level has continuously demanded to ensure the stability of the industrial chain supply chain. The resumption of work and production of enterprises has been promoted, the impact of the epidemic on the supply chain has been gradually mitigated, and the subsequent export is expected to pick up and continue to support the demand for RMB.
moreover, judging from a number of indicators, the current market pessimistic expectations have been largely reflected in the stock price 1) in terms of equity risk premium, the equity risk premium of wandequan a, Shanghai Composite Index and gem index has risen to 72.1%, 82.2% and 94% respectively since 2010, which has exceeded the level after the stock disaster in early 2016. 2) In terms of the magnitude and speed of decline, since the current round of market adjustment in mid December 2021, the Shanghai Composite Index has fallen by 16.1%, exceeding the adjustment at the beginning of 2021, and the slope is close to 2018. At the same time, the gem index fell by 34.3%, exceeding 2018 in both decline and slope. 3) At the valuation level, the PE valuation of all a is close to the level when the global market plummeted due to the epidemic in March 2020, and the valuation of gem is lower than that at that time. 4) In terms of market activity, the transaction volume of Shanghai and Shenzhen stock markets has also dropped to less than 800 billion yuan / day, and the balance of two financial institutions has also dropped to 1.6 trillion yuan from nearly 2 trillion yuan in the third quarter of 2021. 5) In terms of incremental funds, the issuance scale of various financial products fell sharply. In the first quarter, the new issuance scale of partial stock funds decreased by 82% year-on-year. Since April, only 11.1 billion yuan has been issued, and the increment of absolute income institutions such as insurance and private placement is also limited; In terms of capital positions, although the negative feedback position reduction in the first quarter has eased, the positions of most institutions are still hovering at a low level. It shows that market sentiment is close to freezing point therefore, from a number of indicators, the market pessimistic expectation has been largely reflected in the stock price. In the future, although it is difficult to directly reverse the short-term market under the internal and external uncertainties such as covid-19 epidemic, the Fed's interest rate increase and contraction, the rise of US bond interest rates, US stock fluctuations and the conflict between Russia and Ukraine, the follow-up market will shift from overall adjustment to structural differentiation
structure focuses on three directions: real estate infrastructure: policy easing direction has been clear, and the recent rebound in the epidemic has further increased the space and intensity of subsequent policy easing. At the same time, the global market is still in a mess of high volatility and low risk appetite. Real estate, infrastructure, banking and other sectors are both security and policy driven 2) consumption core assets: on the one hand, it benefited from the gradual improvement of the epidemic situation in China. On the other hand, the share price and valuation of the sector have been at a low level, and the internal and external uncertainties can be attacked and retreated 3) the "new half army" may usher in a wave of repair window: since the beginning of the year, the "new half army" has made significant adjustments. Subsequently, with the passing of the first quarterly performance window, the easing of the supply chain impact, the landing of the 50bp interest rate hike by the Federal Reserve, and combined with the judgment of the leading indicators of our "new half army" timing framework, in May, we thought that the "new half army" was expected to usher in a wave of repair window, and it was suggested to select from bottom to top in combination with valuation and performance certainty.
investment strategy: focus on the above three directions in stages. In the medium and long term, we will continue to be optimistic about the five major directions of scientific and technological innovation 1) new energy (new energy vehicles, photovoltaic, wind power, UHV, etc.), 2) new generation information and communication technology (artificial intelligence, big data, cloud computing, 5g, etc.), 3) high-end manufacturing (intelligent CNC machine tools, Siasun Robot&Automation Co.Ltd(300024) , advanced rail transit equipment, etc.), 4) biomedicine (innovative drugs, CXO, medical devices and diagnostic equipment, etc.), 5) military industry (missile equipment, military electronic components, space station, space shuttle, etc.).
risk tips: focus on the unexpected return of global capital to the United States and the game between China and the United States.
