Looking back on the A-share market last week, the Shanghai and Shenzhen stock markets continued the trend of shock and decline, all three indexes ushered in adjustment, the rotation effect of industry and concept sectors was obvious, and the market was not substantially bad. This trend was more emotional pressure and catharsis.
As mentioned in Founder Securities Co.Ltd(601901) , at the beginning of 2022, the overall performance of A-Shares was poor and the market differentiation was obvious. Growth stocks lagged behind value stocks, small cap stocks continued the market leading large cap stocks since 2021.
First, since the Spring Festival in 2021, the valuation digestion of the high boom sector has lasted for a long time, and the valuation premium of the leading companies in the high boom sector represented by fund heavy positions has fallen to a reasonable range.
Second, the current round of adjustment at the beginning of 2022 is mainly for leading companies, and the impact on small cap stocks in the sector is not large. The valuation differentiation level of GEM has reached a new low in recent three years, which also reflects the continuous diffusion of market preference from high premium large cap stocks to long-term depressed small cap stocks.
Third, from the historical data, the current valuation of high boom industries is not too high, and the valuation risk has been greatly released.
From the technical point of view, Dongguan securities mentioned that the market continued to be weak last Friday, and the weight sectors generally weakened, indicating that the market selling pressure was further released, and the popularity was relatively low. Wait for the market to stabilize moderately, and pay attention to the changes of trading volume and the gains and losses near the annual line . In terms of operation, it is recommended to pay attention to food and beverage, household appliances, electrical equipment, TMT and other industries.
In terms of the future market, Huaxi Securities Co.Ltd(002926) indicates that the watershed is ready to go after the Spring Festival . Since the beginning of the year, A-Shares have been disturbed by the Federal Reserve’s monetary policy and the valuation adjustment of the high boom track, and the characteristics of the “spring lack” market are more obvious. Near the Spring Festival, in view of the uncertainty of overseas news during the holiday, some off-site funds stay on the sidelines, and the market may be light. The watershed may be after the Spring Festival, when the path of the Fed’s interest rate increase will be clearer, and China’s liquidity will remain abundant. At the same time, the steady growth policy related to infrastructure and real estate investment continued to work, becoming the driving force for A-Shares to get out of the “cold spring” .
Considering that China’s monetary policy is loose and the valuation of A-Shares is reasonable on the whole, incremental foreign investment is also expected to continue to flow into the A-share market. In terms of configuration, mainly focuses on “undervalued blue chip” : first, it is related to traditional infrastructure, such as banks and building materials; Second, the real estate and its upstream and downstream industrial chain benefiting from the marginal improvement of real estate policy. Focus on topics: digital economy, meta universe, traditional Chinese medicine, etc.
In addition, Ping An Securities believes that the market direction of is still unclear, and it is recommended to focus on wait-and-see in the short term. The stabilization of the overvalued track needs to pay attention to the changes expected by the Federal Reserve to increase interest rates. The continuous fermentation of the epidemic will continue to support the prosperity of the pharmaceutical sector in the short term, and the sustainability and specific foothold of the policy still need to be observed in the stable growth sector.
China Merchants Securities Co.Ltd(600999) pointed out that looking forward to the future stage, the local two sessions will be held in mid and late January. It is expected that more policies to stabilize economic growth will be launched to clarify and firm the market’s expectations for steady growth. Monetary policy may be further relaxed until the growth rate of new social finance significantly improves, showing the force of steady growth, which will bring a turnaround for a shares.
In the short term, A shares may have a structural rebound , which can be arranged along the direction of the performance forecast exceeding expectations (basic chemical industry, electronics, power equipment and new energy, non-ferrous metals), continue to benefit from the steady growth of relevant sectors, and use the adjustment to increase positions. Steady growth direction in addition to the layout of the undervalued repair market in traditional fields, we should also focus on the layout of new infrastructure. In , we can pay more attention to the depression with low configuration and low expected underestimated value.
Macroscopically, China International Capital Corporation Limited(601995) said that there is no need to be overly pessimistic in the medium-term of a shares. At present, the means of “steady growth” of China’s policy is still being gradually implemented. It is expected that in the future, with the continuous introduction of “steady growth” policy details and the gradual stabilization of China’s growth, the market sentiment is expected to be repaired. The “growth style” with poor early performance has stabilized recently. We believe that the sharp decline of “growth style” may come to an end, but we may not be in a hurry to copy the bottom; Although the “steady growth” style has been corrected this week, there may be room for performance in the future. maintaining the previous “steady growth” style may last until about the end of the first quarter, which may be the turning point for the style to return to the growth style .
In terms of operational strategies, the institution further put forward configuration suggestions: 1) potential areas supported by marginal changes or forces of policies, including industrial chains related to stable demand for infrastructure and real estate (construction, building materials, household appliances, home furnishings, real estate, etc.), potential areas of consumer support, securities companies ; 2) For the middle and lower reaches consumption that has been adjusted this year, the valuation is not high, and the medium – and long-term prospects are still clear, choose stocks from the bottom up, including household appliances, light industrial homes, automobiles and parts, Internet and media, agriculture, forestry, animal husbandry and fishery, food and beverage, medicine, aviation and hotels, etc. ; 3) The short-term share prices of the manufacturing growth sector with a large increase last year may be suppressed, including new energy vehicles, new energy and technology hardware semiconductors. The potential turnaround depends on the change of market style again. The potential time point may be at the end of the first quarter and the beginning of the second quarter.
AVIC Securities pointed out that focuses on four main investment lines : the first is the mandatory consumption sectors such as food, beverage, medicine, agriculture, forestry, animal husbandry and fishery that perform better in the period of economic downturn, the second is the banking, real estate and infrastructure sectors with reversed difficulties and seriously oversold, and the third is the national defense industry with high growth rate and strong certainty, which is an important direction of national development, The fourth is the new energy vehicles, photovoltaic and new material tracks under the carbon neutralization sector.
In addition, Anxin securities firmly believes that we should not be pessimistic at present. The recovery of market sentiment needs to wait for key signals such as clear policy expectations, improvement of incremental funds and stability of the external environment. in mid February after the Spring Festival (social finance data) or an important decision point, “value building and growth singing”. This round of spring agitation is still worth looking forward to .
Before that, the organization maintained a high winning rate by looking for the judgment idea of elastic sector in the undervalued value, and the deviation between the increase income and the fundamentals will converge. In the short term, it is suggested to pay attention to the performance forecast of the annual report that exceeds the expected varieties: Chemical Industry (including traditional varieties +), nonferrous metals, transportation (including express), building materials, electronics and securities companies; Focus on the transformation of undervalued central enterprises + emerging industries.
