Core view:
The impact of the spread of the epidemic on the economy in March 2022 exceeded expectations. We expect that China's economy will continue to decline in April compared with March. However, with the gradual control of the epidemic in Shanghai and the continuous efforts of a number of stable growth policies, China's economy may be going through the worst time. The future policy adjustment is still expected. We believe that investors should pay attention to the relevant industries that have benefited the most from the post epidemic recovery, and the industries with stable growth. In addition, the "optimization" of epidemic prevention and control may also mean some investment opportunities. Key investment points
High frequency data show that the economy may continue to deteriorate in April
The epidemic raged again after the Spring Festival, and its impact on China's economy exceeded expectations. Economic growth has slowed significantly in March. High frequency data show that the economy in April may be significantly worse than that in March. The production of automobiles, chemicals, building materials and electricity may decline significantly. The number of movie watchers and auto retail also continued to deteriorate, while the data of real estate sales and investment demand also performed poorly, and there were signs of further decline in exports. We expect the GDP growth rate in the second quarter to be 4.6%, slower than that in the first quarter.
Epidemic inflection point and economic inflection point with the emergence of the epidemic inflection point in Shanghai and the resumption of work and production, we believe that China's economy is going through the worst stage. Some high-frequency data of logistics have begun to show signs of improvement. At the same time, greater macro policy adjustments are emerging, and epidemic prevention and control are constantly "optimized".
Opportunities and challenges
Investors can pay appropriate attention to some industries with the greatest improvement in the impact of the epidemic, such as logistics, transportation, catering, film and television entertainment, offline retail and auto parts. Of course, industries related to steady growth that benefit from more policy adjustments, such as real estate and infrastructure, also deserve attention. In addition, the "optimization" of epidemic prevention and control may also mean potential benefit opportunities for transportation, aviation, exhibition and tourism. Of course, since it is difficult to return after the outflow of some export orders, coupled with the slowdown of overseas economic growth, even if the epidemic is controlled and the supply improves, China's export growth may still show negative growth in the fourth quarter.
Risk tips
The economy is less than expected; Global epidemic deterioration; The policy is not as expected
