The conflict between Russia and Ukraine, the upside down of interest rate spread between China and the United States, and the unexpected rebound of China’s epidemic… Under all kinds of bad disturbances, the Shanghai stock index broke another 3000 points recently, which made investors deeply confused and disappointed. At the same time, opportunities for value investment are slowly emerging.
“After the decline in previous months, the valuation of the whole market has been very cheap, which is very similar to the state in October 2018. We are gradually reducing our defensive positions and looking for growth opportunities in an all-round way!” As the May Day holiday draws to a close, the boss of a 10 billion private placement in Shanghai wrote an article.
Coincidentally, a 10 billion private equity boss in Beijing also said that although the market sentiment is still panic and confused, the safety margin of warehouse building will be higher. It also revealed that it has begun to “gradually increase its positions”, and the main direction of increase is companies with strong performance support and high moat barriers.
valuation is close to the end of 2018, and all difficulties are temporary
“In April, the epidemic situation in Shanghai exceeded expectations. At the same time, covid-19 epidemic was distributed in many places across the country, and strict epidemic prevention policies were adopted, which led to the fermentation of pessimism about the economy.” In the latest monthly view, Liu Xiaolong, general manager of Shanghai juming investment, said.
Two months ago, Liu Xiaolong made a calculation: according to the estimation of the valuation bottom in 2018, the bottom of the gem this year should be 2100 points. At that time, considering that the liquidity this year was better than that in 2018, it rose by 10%, that is, 2300 points.
According to Liu Xiaolong, the valuation of the whole market has been very cheap, which is very similar to the state in October 2018. This means that they will no longer take the initiative to reduce their positions, but start to look for opportunities for excess returns from the dimension of 1-2 years.
In terms of the epidemic situation, whether it is to return to the state in February or to find a way to coexist with the virus, Liu Xiaolong believes that as long as there is a plan, economic activities will gradually return to normal, and the fear of relocation of the industrial chain discussed in the market will be alleviated.
“All difficulties are temporary, and the combat effectiveness of Chinese entrepreneurs is even stronger. Emotionally, the mood in the last two weeks of April is close to the freezing point. According to experience, this time is generally a better time for equity investment.” Liu Xiaolong said.
Liu Xiaolong revealed that defensive positions will be gradually reduced in May and opportunities for growth will be comprehensively sought. Of course, the process will not be smooth. He believes that the decline in April has largely reflected some expectations, and excellent companies need to be moderately long.
has little room for sharp decline, and has begun to “gradually increase positions”
“At the end of the bear market, many stocks may fall more, and some may see the bottom in advance. For example, some leading stocks of consumption, medicine CXO and the Internet have not been much in the near future, and some even rose.” Zhang Kexing, general manager of gray assets, recently wrote an article.
According to Zhang Kexing, they have begun to “gradually increase their positions” in the direction of companies with very strong performance support, very good business model and high moat barriers. Of course, he will also consider the cost performance of valuation, which can not be excessively overvalued stocks.
Specifically, Zhang Kexing’s optimistic direction is mainly in the consumption of food and beverage. In addition, some Hong Kong stocks, such as the Internet, which is greatly affected by policy supervision, as well as property services, medicine, tourism and retail, these directions are the areas they focus on and layout.
Let’s look at the consumer industry first. Although the epidemic has a great impact on production and life, the data of many enterprises in 2021 are still good. Recently, government departments have issued a lot of incentive policies. Under the goal of steady growth, the policy continues to promote the growth of the consumer industry.
Zhang Kexing believes that after more than a year of adjustment, the valuation of the consumer industry has dropped a lot. At present, the value of stock bond income difference in the industry is in a low range, there is little downward space, and the safety margin of investment is high.
Let’s look at the biomedical industry. After more than a year’s sharp adjustment, the valuation has been at the bottom of previous bear markets. In view of the impact of centralized mining on the industry fundamentals, Zhang Kexing is still optimistic about CXO track, hospital medical device industry and traditional Chinese medicine industry, which are less affected by centralized mining.
turning point will not be too far. Continue to “be cautious” in operation
“The macro data fell again in March. Although infrastructure investment rebounded significantly under the financial force, it is difficult to form an effective support for the economy only by infrastructure investment. The future policy focus is still in the field of real estate and consumption.” Shanghai Shifeng assets pointed out in its strategy report in May.
Since the second half of March, the impact of the epidemic in China has intensified. On the one hand, the closure and control in Shanghai has affected the normal operation of enterprises in Shanghai and even the surrounding areas. On the other hand, it has gradually tightened the epidemic prevention and control measures throughout the country, and the risk of loss of China’s export orders is gradually rising.
In addition, the accelerated contraction of the Federal Reserve will also affect the intensity of China’s monetary easing. Shi Feng asset believes that the general direction of China’s monetary operation will still be adjusted according to the changes of China’s economic situation. The tightening of the Federal Reserve will more affect the intensity of China’s monetary easing than the direction of easing.
“The market is expected to continue to find the bottom, and there is still a lack of positive factors for rebound in the short term.” Shi Feng assets believes that the impact of the epidemic on the economy may be greater than that in the first quarter, and the downward trend of corporate profits is not expected to reach the bottom. In the short term, the market still lacks positive factors for rebound, so we need to wait for more policies.
Specifically, in terms of investment operation, Shi Feng assets believes that under the suppression of the epidemic, the Russian Ukrainian war and US debt, the A-share market will probably continue to find the bottom. In terms of operation, we should continue to “be cautious”, but we also need to objectively look at the suppression factors in the following three aspects.
First, the epidemic situation in Shanghai is slowly entering a remission period, which should be significantly improved after May; Second, the Russian Ukrainian war is entering the final stage; Third, the yield of 10-year US bonds is about 3%, which is already the top area. Therefore, Shi Feng believes that the turning point of the market should not be too far away.
