[observing policies and discussing the market] A-Shares have stabilized and rebounded as scheduled, and gradually entered a new round of upward cycle. In the future, with the epidemic situation in China under control, the “incremental policy tools” that have been issued and are being planned emphasized at the Politburo meeting are expected to be implemented and promoted. The implementation and commencement of investment projects will drive social finance back to the upward direction and improve market economic expectations. A shares are expected to gradually stabilize and recover and gradually move towards the starting point of a new upward cycle. First, focus on the two directions of growth and stable industry allocation. It is mainly recommended to start the construction of traditional infrastructure such as [chemical industry], [cement], [industrial metal], [steel] and new infrastructure such as [photovoltaic], [wind power], [energy storage] for the benefit of new construction and construction acceleration; Second, economic activities resumed after the epidemic. Pay attention to the consumption voucher activities launched by various places, from quantitative change to qualitative change, and support the [food], [daily necessities], [home] and [consumer building materials] brought by the demand for rigid and improved housing.
[resumption · internal view] all major A-share indexes rose this week , mainly due to: 1) the epidemic situation in some areas has improved significantly recently, and the resumption of work and production has been steadily promoted; 2) Recently, the relief policies for small and medium-sized enterprises have been continuously introduced; 3) The five-year LPR was lowered more than expected, which on the one hand had positive support for the valuation of a shares, on the other hand strengthened the expectation and intensity of economic recovery after the epidemic.
[meso · boom] in April, the output of smart phones turned negative year-on-year, the output of integrated circuits expanded year-on-year, and the output of industry Siasun Robot&Automation Co.Ltd(300024) turned negative year-on-year; From January to April, the year-on-year decline in the completed area of houses, sales volume of commercial houses, sales area of commercial houses, newly started area of houses and the cumulative value of development fund sources expanded, and the cumulative completed amount of real estate development investment turned negative year-on-year From 1 to April, the cumulative year-on-year growth of China’s power generation narrowed, and China’s power consumption turned negative year-on-year in April. This week, billet and rebar prices continued to decline, while iron ore price index rose. The cement price index of the whole country and many regions decreased.
[capital · numerous and few] northward capital flows back sharply, and the two financial institutions continue to flow in northward capital inflow of 15.22 billion yuan this week; The total net inflow of financing funds in the first four trading days was 3.02 billion yuan; 2.33 billion partial equity public funds were newly established, an increase of 990 million over the previous period; ETF net redemption, corresponding to a net outflow of 4.42 billion yuan. In terms of industry preference, banks, chemical industry, public utilities, etc. have higher net purchase scale of northbound funds; Net purchase of chemical industry, food and beverage, building materials, etc. with financing funds; There are more applications for pharmaceutical ETFs and more redemption of information technology ETFs. The net reduction scale of important shareholders expanded and the planned reduction scale decreased.
[theme · wind direction] this week’s industry observation – People’s cloud “goes online, focusing on the continuous promotion of Xinchuang, state-owned assets cloud and Eastern digital Western computing. may 20, the” people’s cloud “positioned in security cloud, Xinchuang cloud, state-owned assets cloud and industry cloud was officially launched as” state-owned assets cloud ” “The nationwide landing provides a basic platform, which effectively ensures the core demand of the information and innovation industry in pursuit of intrinsic safety, and helps to promote the national” East digital and West computing strategy. It is suggested to pay attention to the investment opportunities in state-owned assets cloud, East digital and West computing and information and innovation.
[data · valuation] the valuation level of all A-Shares this week increased compared with last week , PE (TTM) increased by 0.3x to 13.8x, which is in the quantile of 30.3% of the historical valuation level. The valuation of the sector was divided, among which the valuation of the electrical equipment sector rose more and the pharmaceutical and biological sector fell more.
[risk warning] the strength of the policy was less than expected, and the US dollar appreciated significantly
