A shares rebounded further this week, breaking 3100 in volume, reflecting the market's confidence in policies and the cognition that China's economy is showing a trend of further improvement. During the exchange with market investors, three new concerns were added: first, while the epidemic situation in Shanghai improved, the recent epidemic prevention and control measures in Beijing became stricter. How to comprehensively evaluate the impact of the current epidemic on the economy? Second, compared with the first two rounds of decline rebound since the beginning of the year, is it the end of the rebound or the beginning of the reversal? For this problem, it is necessary for us to make an updated assessment of the current A-share market, especially the oversold rebound of the high boom track. Third, the continuous decline of US stocks this week began to show concern about the economic recession, and will this trigger a global chain reaction?
Since the beginning of the year, the A-share market has experienced three waves of decline - rebound: in contrast, the rebound range of this round is significantly higher than that of the first two rounds, and the rebound time and range have reached the average level of historical sharp decline rebound. The first round of decline rebound occurred from early January to early March. The rebound lasted 18 trading days. The Shanghai stock index rose 3.65%, led by the old infrastructure at the industry level. The second round of decline rebound occurred from early March to early April. The rebound lasted 14 trading days. The Shanghai Composite Index rose 7.16%, led by real estate at the industry level. This round of decline rebound has lasted 15 trading days since the beginning of April. The Shanghai stock index rose 9.01%, led by the high boom. We found that during each round of continuous market decline, there are often 3-4 rebounds, with an average rebound range of about 10%, a maximum rebound range of more than 20%, an average trading time of about 15 days and a maximum trading time of more than 30 days.
In terms of this round of oversold rebound of high boom track, it is expected that the oversold rebound of high boom track based on emotional level is coming to an end, and the improvement of incremental funds needs to be observed in the follow-up. Benefiting from the promotion of resumption of work and production and the decline of cost concerns, photovoltaic and new energy vehicles have rebounded by more than 25% since April 26 (rebound range of high boom track: photovoltaic (+ 36.05%) new energy vehicles (+ 27.85%) semiconductor (+ 25.15%) wind power (+ 24.84%) national defense and military industry (+ 22.05%). After this round of oversold rebound, the current valuation level of high boom core track has deviated from the level of absolute undervaluation, and the valuation quantile is at the level of low median. According to PE of high prosperity track and the quantile of ten-year history: new energy vehicles (44.2x, 80.9%) photovoltaic (37.1x, 48.5%) wind power (23.6x, 23.1%) semiconductors (40.5x, 14.4%) national defense and military industry (60.6x, 12.7%). From the current high boom track fundamentals and boom trends, we believe that the internal order is: photovoltaic national defense and military industry semiconductor, new energy vehicles wind power. For market reversal, we still need to wait for a clearer signal on the right. From the economic data and real estate data just released in April, it can be seen that the deep-seated negative impact of this round of epidemic on China's economy is beginning to show. At present, China's fundamentals are still in a downward trend, and there is no signal of improvement in relevant economic data. In April, the unemployment rate of people aged 16-24 in China rose sharply by 18.2%, up from 16%, significantly exceeding the peak unemployment rate of 16.8% under the impact of the epidemic in 2020. The employment situation of young groups (including college graduates) is very grim. In the process of communicating with the market, investors pay most attention to the verification of real estate micro data in the determination of the inflection point of China's fundamental profit expectation. From the data of the real estate sales investment construction chain, the data fell further in April. In April, the national commercial housing sales area fell by 20.9% year-on-year. Since May, the transaction area of commercial housing in 30 large and medium-sized cities in China has fallen by 50.80% compared with the same period last year. In April, the growth rate of real estate investment turned negative (- 2.7%) year-on-year, and the year-on-year growth rate of new construction area fell the most significantly, from - 17.5% in March to - 26.3%. At present, the inflection point of real estate data has not yet appeared.
For external factors, out of concern about the U.S. economic recession, the three major U.S. stock indexes fell for seven consecutive weeks, and the "soft landing" of the U.S. economy still needs to be observed. At present, concerns about the US economic recession are indeed rising. According to the latest data evaluation, the current US economy is still some distance from the official recession, mainly for the following reasons: us personal consumption and investment still maintain strong growth, and the US job market remains strong. Historically, raising interest rates is often accompanied by the decline of the US economy, but it does not necessarily lead to recession. Whether the Federal Reserve will adjust its monetary policy before the recession is also the key to whether the US economy can achieve a "soft landing".
For the current four main lines "steady growth, high prosperity, post epidemic repair and global inflation", we believe that "steady growth" is still the main position (positional warfare, not switching back and forth). It is suggested that the configuration priority is: steady growth (infrastructure, real estate chain and bank) high prosperity (digital intelligence, photovoltaic, military industry, semiconductor, wind power and new energy vehicles) Post epidemic rehabilitation (social services, logistics, medical beauty, food and beverage, etc.) global inflation (coal, nonferrous metals, petrochemical).
Risk tip: the spread of the epidemic exceeded expectations, the policy was less than expected, the Sino US relations deteriorated again, and the overseas monetary policy changed
