Basic conclusion
Since the beginning of the year, the A-share market has been impacted by the rising expectation of interest rate hike by the Federal Reserve, the black swan situation in Russia and Ukraine, and the repeated epidemic in China. Recently, with the rapid depreciation of the RMB and the bottom of the stock market again, the current market pricing logic began to turn to the molecular end of enterprise profits. The market's concerns come from three aspects: 1) the epidemic situation in China is repeated, and the epidemic situation in various places erupts in a divergent manner. At present, it was the peak season for construction. The closure of cities and logistics congestion have a significant impact on the current economic activities, and the market's concerns about the economy in the second quarter have increased; 2) The epidemic in China has a great impact on the supply chains of some industries. Overseas orders have gradually shifted out of China to Southeast Asian countries with smooth supply chains such as Vietnam and India. The market is worried that China's exports may be lower than expected; 3) During the earnings season, the performance of some key companies (such as Sungrow Power Supply Co.Ltd(300274) ) was significantly lower than expected, causing the market to worry about the fundamentals of relevant industries.
Fundamental concerns are the last factor impacting a shares. For corporate profits: 1) the performance probability of A-share annual report in 2021 exceeds the market expectation. The A-share listed companies that have disclosed the annual report are highly representative. According to the comparable caliber, the growth rate of non-financial A-share net profit in 2021 annual report is 36%, still maintaining a high growth rate, with a compound growth rate of nearly 20% in two years; 2) The epidemic situation in China only affects the extent of performance decline in the first half of this year, and does not affect the profit trend and rhythm. At the end of this year's A-share profit, or in the second quarter, the economy rebounded in the second half of the year. With the price rise of upstream resource products slowing down, the profit margin of the middle and lower reaches improved or driven the performance to stabilize and recover.
Fundamentals determine the medium-term bottom, emotional disturbance and short-term performance. 1) In the medium term, fundamentals are the core factor determining the market. If there is no problem with corporate profits, the current market probability is at the bottom of the medium-term range, and the market breeds obvious medium-term opportunities. 2) In the short term, it is impossible to judge whether the market bottoms out in the short term from the perspective of fundamentals. Investor sentiment may continue to disturb the market, but the disturbance of pessimism to the market will always subside. Compared with the initial stage of the epidemic in the first quarter of 2020, the current market is overly pessimistic, even close to the second half of 2018. From the perspective of the positions of absolute income institutions such as private placement, the positions of private placement funds at the end of March were as low as 59%, far lower than the level in the first quarter of 2020 and close to the level at the end of 2018.
Prosperity is not in danger, and active layout. It is preferred to underestimate the value under the defensive idea, but when A-Shares change from defensive to offensive, A-Shares may usher in a growth moment. Since the beginning of this year, the market risk appetite has been low, and the sector adjustment has shown the characteristics of relatively larger adjustment range of the sector with high valuation at the beginning of the year. However, the internal adjustment range of medium and low value sectors is obviously differentiated, and the decline of industries with high risk aversion attribute is relatively smaller. In this case, the opportunities brought by overshoot in some industries deserve attention. In addition, after continuous adjustment, the current valuation cost performance of some overvalued sectors began to appear.
Industry configuration: focus on the layout of "low-carbon, intelligent and digital". The new energy sector is stabilizing and recovering, with TMT technology on the left side and concerns about the allocation opportunities of securities companies. It is gradually concerned about the expected business opportunities of high-end Baijiu after the epidemic is eased.
1) at present, there is no significant change in the fundamentals and policies of heavy positions of new energy and other institutions, which has stabilized and rebounded or is an event with high probability. Although some investors are worried that the market's expectations for the performance growth of the new energy sector are too high and there are potential risks that the performance is lower than expected, there is a high probability of smoothly passing the performance test.
2) TMT is the sector with large expectation difference, especially the sector biased towards hard technology, such as communication, computer and some semiconductors. First, the prosperity remained stable and upward; Secondly, the valuation of the sector is basically at the bottom of history; In addition, policies such as new infrastructure may become market catalytic factors. It is suggested to actively layout the core industrial chain: automobile intelligent industrial chain, 5gtob end application, industrial digitization, Huawei industrial chain, etc.
Risk tips: the economic recovery is not as expected, the macro liquidity contraction risk, and the overseas black swan event
