Basic conclusion
Looking at the market around the Spring Festival in recent ten years, the Spring Festival market is usually better in the year with loose liquidity under the downward pressure of the economy. The catalytic factors of spring agitation mainly come from two aspects: first, the liquidity is often relatively loose before and after the Spring Festival and the two sessions; second, the economic data and the performance of listed companies are often in a vacuum period that is difficult to prove false. In 2012, 2015 and 2019, when the spring market is good, the loose liquidity under the economic downturn promotes the spring market. However, there are certain policy, fundamental and event shocks in the years with large market fluctuations in spring. For example, the real estate regulation in early 2010, the two circuit breakers in 2016, the thunder of goodwill in 2018 and the impact of the epidemic in 2020 all made the market fluctuate greatly before and after the Spring Festival. In addition, the low expectation difference before and after the Spring Festival in 2017 led to a relatively flat market.
Whether from the macro-economic and liquidity environment, or from the relative cost performance of the current stock market valuation, we believe that the Spring Festival market is still worth looking forward to. 2012, 2015 and 2019 were in the stage of increasing downward pressure on the economy, and some policies to boost the economy were introduced at the end of last year, such as reducing reserve requirements and even interest rates. These characteristics are similar to the current market environment. From the perspective of valuation and risk appetite, there are similarities in distinguishing different market styles and structures. From the risk premium of CSI 300 and CSI 500, at present, the risk premium of CSI 300 is in the middle in the past three years, and the risk premium of CSI 500 is more than double the standard deviation of the average in the past three years. By analogy, the current CSI 300 risk premium is similar to that in early 2015, and the CSI 500 index is similar to that in early 2012.
Market view: at the end of the adjustment, we will not be pessimistic about the A-share market in the next quarter. The downward pressure on China’s economy is increasingly apparent. In the next half of the year, the economy is at the bottom stage, and the economic probability will reach the bottom in the middle of next year. The downward performance has become the unanimous expectation of the market and will not become the core factor leading the market. Policy is the core driver of A-Shares in the next stage. As stated in our report “the end of adjustment: the stabilization of heavy position stocks and the rise of TMT” on January 12, in the absence of changes in fundamentals and policies, the reasons for the obvious adjustment of the market (especially institutional heavy position stocks) before and after new year’s day are highly likely to be related to the capital game. From historical experience, this adjustment lasts about 2-3 weeks, and the current adjustment of heavy position stocks may be coming to an end.
Industry configuration: focus on the return of the main line of the new energy sector, layout TMT hard technology, and pay attention to the short-term and fast opportunities of securities companies.
First, there is a high probability of stabilization and recovery of heavy position stocks of new energy and other institutions. At present, there is no significant change in the fundamentals and policies of the heavy positions of institutions such as new energy, which has stabilized and rebounded or is a high probability event. According to the recently disclosed annual report forecast, companies in the sector have generally achieved high growth. Although some investors are worried that the market has too high expectations for the performance growth of the new energy sector, there is a potential risk that the performance is lower than expected. But at present, the probability of smoothly passing the performance test is high.
Secondly, the TMT sector with high cost performance is arranged on the left. TMT expects the sectors with large difference, especially the communication and computer that prefer hard technology in TMT. First, the industry boom remained stable and upward; Secondly, the sector valuation is basically at the bottom of history; In addition, policies such as new infrastructure may become market catalytic factors. It is suggested to actively layout the core industrial chain: automobile intelligent industrial chain, 5g to b-end applications, information innovation industry, Huawei industrial chain, etc.
Risk tips: the economic recovery is lower than expected (China’s economy is lower than expected, and the overseas economic recovery momentum is lower than expected), the risk of macro liquidity contraction (the Federal Reserve raises interest rates and shrinks the table than expected), and the overseas black swan event (geopolitical policy risk)
