In 2021, the year-on-year net profits of all a / all a non parent companies were 19.51% / 20.46% respectively; Affected by the epidemic and cost impact, the year-on-year growth rate of non parent net profit of all a / all a in 2022q1 was 5.47% / 7.26% respectively. As a whole, the growth rate was in the process of continuous decline. The commercial credit of listed enterprises in many fields deteriorated (the decline of operating liabilities) and the gross profit margin decreased. At the same time, they were indifferent to credit expansion (the contraction of asset liability ratio), showing the characteristics of extremely conservative and cautious business behavior (the decline of capital expenditure and expense ratio), It confirms that the current economy is facing the triple pressure of “demand contraction, supply shock and weakening expectation”. From the perspective of roe, the level of aroe in 2022q1 fell back to 9.04% (non-A in 2022q1 fell back to 8.46%), the net sales interest rate fell, the asset turnover rate was still rising, the manufacturing industry was in the passive replenishment stage, and the high inventory pressure was delaying the process of economic liquidation.
According to the 2021 annual report and the first quarterly report of 2022, the current order of performance growth in various fields is: cycle growth (lithium, potassium fertilizer, phosphate fertilizer, etc.) upstream resource products (coal, copper, aluminum, oil exploitation, etc.), new materials (anode and cathode materials, electrolyte, diaphragm, ternary precursor, special steel, etc.) medicine (CXO, covid-19 detection), semiconductor (domestic substitution) high-end manufacturing (photovoltaic, new energy vehicles, military industry) Digital intelligence (digital economy, software development, it services, IGBT) consumption (essential consumer goods), banking securities companies, insurance. As for the hot industrial tracks concerned by the market, many people’s doubts about the realization of the fundamentals of the high boom growth track have spread to the second half of this year. The order of contributing factors: the negative effect of China’s epidemic prevention and control on the obstruction of the supply chain the realization of steady growth is lower than expected cost impact the deterioration of the industrial competition pattern difficulties in improving penetration and market share there is a possibility of adjustment of industrial policies. From the current quarterly report, the boom of Q1 original high boom growth track stocks shrank, and a few high boom track stocks fell short of expectations to a certain extent. Looking back, we maintain the previous view: Yuanfeng photoelectric high prosperity track is expected to shrink from multiple industrial chains and links in 2021 to a few industrial chains and links in 2022.
Due to the unexpected impact of China’s epidemic, A-share profits are likely to form a profit bottom in the second quarter, and then climb the pit in Q3 with the increase of steady growth policy. The bottom is more important than the bottom. During the continuous recovery of the market in 2020, the fundamentals of 2020q2-2021h1a shares continued to be significantly repaired. Compared with the rhythm of A-share fundamentals in 2020, the repair slope of A-share fundamentals will be relatively gentle after the end of this round of Q2 earnings. The reason is that the epidemic and cost impact in the first half of the year led to the advance of the bottom of Q2 Profit, but the expected reversal, real estate problems and high inventory pressure will restrict the rise of Q3 and later fundamentals. Further, comparing the current A-share fundamentals with the two bottom rising processes of profitability in 2013q1 and 2019q1, it will be found that the current enterprise inventory level is higher and the clearing degree of fundamentals is lower than that in 2013q1 and 2019q1. Meanwhile, China’s PPI prices were low in 2013 and 2019, and the current weakening of demand and supply shocks occurred at the same time. In addition, the Internet economy and real estate played a strong role in supporting the fundamentals of A-Shares in 2013 and 2019. At present, the “expected weakening” faced by this sector is more obvious.
Combined with the current market, the configuration logic based on the fundamentals of A-Shares has the following three clues: 1. For the transmission of ppi-cpi, we think it will be late, but it will not be absent. In the second half of 2022, driven by CPI, the net profit margin of sales rebounded, the asset turnover rate fell into passive destocking and decreased, and the logic of structural quantity will be constrained. At this time, we can pay attention to the CPI chain of essential consumer goods, and still avoid the manufacturing industry impacted by cost and unstable demand in the process. 2. At present, in the period of economic downturn, the performance growth of the target / weight sector of large market value of A-Shares is dominant, the performance of CSI 300 is better than CSI 500, and the feast of small and medium-sized stocks is suspended. 3. The third clue is that the Anxin strategy team put forward a four stage framework for the interpretation of A-share fundamentals under the epidemic in early 2020: “1. Cash flow priority – 2, income certainty – 3, profit elasticity – 4, asset expansion”, and put forward the corresponding investment logic based on this: “1. Benefit from the epidemic – 2. Anti risk (high roe or strong policy support) – 3. Post epidemic repair – 4. Industrial logic”.
Finally, at the end of 2019, we put forward the “theory of financial profit transfer”, which has been verified by the market in 2020. At present, we once again voice the “upstream profit transfer” in order to ensure that the proportion of manufacturing industry is basically stable during the 14th Five Year Plan period. In the third quarter of 2019, the profit proportion of the A-share financial industry broke the “warning line” of 55%, and the profit level of the manufacturing industry was severely squeezed by the financial industry. In order to prevent the shrinkage of the manufacturing industry, we think it is necessary to help repair the fundamentals of the manufacturing industry through cost reduction policies. At present, the profit structure of A-Shares is seriously unbalanced, and the proportion of upstream profits has reached 18.74%. The phenomenon of increasing income without increasing profits in the whole A shares is prominent. The contradiction of “eating enough in the upstream and starving in the middle and downstream” is strong, which has seriously affected the policy goal of “maintaining the basic stability of the proportion of manufacturing industry” during the 14th Five Year Plan period.
Risk tip: the economic growth is lower than expected and the epidemic situation is higher than expected.
