Review: on January 3, 2022, “it’s the turn of big finance” began. The whole market developed its own style and recommended “big finance” (banks and real estate), on January 16, “retreat or attack, rely on big finance”, on February 6, “big finance, continue to cut”, and on March 6, “a new round of upward attack of big finance”. It continued to emphasize that “big finance” was the winner and loser of 2022 investment. It seemed to be defensive, but in fact it was the best attack. In the first quarter, real estate and banks, Ranked among the top three gainers, the latest changes in fund positions have once again confirmed the foresight and correctness of our views.
At present, the external economy is at a high level, our economy is at a low level, and the dislocation of economic fundamentals is the largest. The external market is closing, we are releasing, the exchange rate expectation pressure is high, the stock market stock game, and the liquidity is pessimistic. The internal and external two-way dislocation, coupled with the repeated epidemic, the continuous “thunder” of the first quarter report, the recovery of the supply chain and the recovery of consumption, the Shanghai composite index is close to the previous low again, and investors are more pessimistic. Looking ahead to this week’s key decision-making week, the uncertainty of investors’ attention is becoming clear: ① the Politburo meeting in April set the tone for the economy and epidemic prevention and control in the second quarter to stabilize investors’ expectations. ② After the disclosure of the first quarterly report, investors are expected to turn to the interim report. ③ On May 3 and 4, the Fed’s interest rate meeting asked whether the pace of raising and shrinking interest rates throughout the year would be “more hawkish” or whether the price was basically price in. Looking forward to the next 1-2 quarters, the market is getting better and better. Cherish the “cheap time” in the current bottom area, and A-Shares are expected to meet the counter offensive moment of “Normandy landing” and “infinite scenery in dangerous peaks”.
First, in terms of economic fundamentals, the comparative advantage of China’s economy will return. At present, China’s fundamentals are hovering at the bottom and Europe and the United States are at the peak. If China’s epidemic improves in the second half of the year, the supply chain recovers, and overseas crosses the recovery peak, China’s economy will run upward, while overseas will run downward, and our comparative advantage is expected to return.
Second, corporate profits are expected to gradually stabilize and recover. From the perspective of the past 20 years, the downward cycle of A-share earnings is 6-8 quarters. In the second and third quarters of this year or at the end of A-share performance, it will gradually improve in the fourth quarter.
Third, at the liquidity level, the market liquidity in the first half of the year was poor for two reasons: 1) the Federal Reserve raised interest rates and funds returned to the United States; 2) The market decline since the beginning of the year has put pressure on the issuance of public funds, and some absolute income products have also reduced their positions. In the case of less incremental funds, the market showed the trend of stock game in the whole first half of the year. Looking back, if the Fed does not make a more “Eagle” statement in the follow-up, with the prominent comparative advantages of China’s economy, overseas funds may return to emerging markets again, especially the Chinese market with significant medium and long-term allocation value.
Investment suggestion: gradually welcome the “big consumption” buying point. At present, it has entered the comfortable area of cost performance, odds and winning rate. Home furnishing, household appliances, consumer building materials, and service consumption (social service, aviation airports, medical services, media games), three traditional consumer goods (consumer goods, Baijiu, pigs), etc.
“Take over: big consumption is about to usher in buying points” was put forward on April 17. At the current time point, the share price of consumer stocks reflects the more difficult situation in the first quarter, but it has not yet reflected the interim report, or the situation in April and may. The data of April and may are uncertain, and whether it will be worse due to the spread of the epidemic and other factors. It is possible, so it is not ruled out. But overall, in the process of balancing epidemic prevention and control and economic development, the data in the second quarter is expected to see signs of gradual improvement. The share price performance of consumer stocks may also be subject to ups and downs due to the fluctuation of data and the epidemic, but it is unlikely to be worse than when “Shenzhen” and “Shanghai” are “closed” at the same time.
For a long time, the buying point to gradually meet large consumption is a more comfortable and appropriate time point for cost performance, odds and winning rate. However, the process of gradually and slowly adding the consumption sector is not smooth. We should match it slowly and buy it slowly. We are not in a hurry to buy it at one go, because the epidemic situation is repeated, data verification and other disturbances exist, and the process is twists and turns. We should fight a “guerrilla war” and turn a small victory into a big victory. For “big finance” (banks and real estate): the short-term rise is too fast and too urgent, the stock game, the impact of events and twists and turns. However, the steady growth policy will be strengthened, and the “big finance” market is still expected to take advantage of the high-quality target of adjusting the layout fundamentals. The bank focuses on large banks with undervalued “stagflation” and high dividend yield, and urban commercial banks and rural commercial banks with good performance growth in Chengdu Chongqing economic circle, Yangtze River Delta economic circle and other places. Real Estate focuses on the high-quality real estate enterprises that can “survive” and benefit from the supply side reform, focusing on the core allocation idea of “the leftover is the king”.
Risk tips: the conflict between Russia and Ukraine escalated, overseas interest rate hikes exceeded expectations, and the spread of the epidemic exceeded expectations
