Core conclusion: the macro environment faced by A-share investors in 2022 can be said to be domestic and foreign troubles, sudden epidemic, long-term turning point of real estate, interest rate increase by the Federal Reserve, exchange rate depreciation, etc. Similar situations occurred in 2018, including sudden Sino US trade conflict, long-term leverage inflection point caused by deleveraging, four interest rate hikes by the Federal Reserve and devaluation of the RMB exchange rate. At present, the valuation of A-Shares is close to Q4 in 2018. Will the lower limit of valuation in 2018 continue to be effective? By comparing the macro risks in 2022 and 2018, we believe that it is difficult to break the valuation bottom of Q4 in 2018 in 2022. Because: (1) compared with the conflict between China and the United States, the impact of the epidemic should still be more short-lived. Especially considering that the epidemic policy is more self-centered, we have enough time to adjust and respond. (2) Deleveraging in 2018 is a systemic long-term problem, but with the fine-tuning of the pace of deleveraging, the low valuation of the stock market has also been maintained. The fine-tuning probability of real estate policy in 2022 can also hold the historical valuation bottom. So now it should have gradually entered the bottom area. In terms of specific rhythm, due to the large adjustment of the index in the previous quarter, the stock market has rebounded recently, and the probability can last until mid May. After that, due to the impact of the Fed's interest rate increase and the decline of manufacturing profits, there is the possibility of a second bottom. Strategically, 2022 may be a V-shaped shock, with the first half similar to 2018 and the second half similar to 2019.
(1) the valuation is close to Q4 in 2018. Another effective valuation indicator in history is the absolute value of Pb. At present, the absolute value of Pb of A-Shares has entered the bottom area, the Pb of all A-Shares has reached the level of Q4 in 2018, and the Pb of all a non-financial petroleum and Petrochemical has reached the level of August September 2018.
(2) suppression of valuation by major emergencies: the epidemic in 2022 and the trade conflict in 2018. Looking back on the Sino US trade conflict in 2018, it also disturbed China's position in the global supply chain. In hindsight, this impact has lasted until now, but the impact on the stock market only lasted until the end of 2018. With the contact between China and the United States at the G20 summit on December 1, 2018 and the start of negotiations, it came to an end. Compared with the conflict between China and the United States, the impact of the epidemic should still be more short-lived. Especially considering that the epidemic policy is more self-centered, we have enough time to adjust and respond. In comparison with emergencies, the valuation bottom in 2022 can be slightly higher than that in 2018q4.
(3) concerns about internal long-term problems: real estate in 2022 and deleveraging in 2018. The real estate problems in the last two years are very similar to the deleveraging problems in 20172018. They are both long-term big problems and long-term big turning points. The policy direction of "no speculation in housing and housing" is difficult to change. However, if there is a fine-tuning in strength, its impact on the stock market may be similar to the impact of deleveraging on the stock market in 2018. Considering that the steady growth policy has been introduced continuously in the past half year and the real estate policies in various regions have been gradually relaxed, the real estate risk in 2022 should not exceed the deleveraging risk in 2018. Therefore, it is difficult to break the extreme value of 2018q4 in 2022.
(4) external bad news: the exchange rate and the Fed's interest rate hike also occurred in 2018.
Risk factors: the real estate market fell more than expected, and US stocks fluctuated violently.
