Citic Securities Company Limited(600030) : the inflow of market funds will resume, the “bottom of the market” is gradually approaching, and continue to layout high-quality blue chips
Citic Securities Company Limited(600030) said that the “policy bottom” has been made clear, the “emotional bottom” is coming, and the “market bottom” is gradually approaching. It is suggested to continue to focus on the “two low” layout of blue chips to meet the starting point of the market in the first half of the year. First of all, the data show that the time point of the greatest downward pressure on the economy has passed, but the dependence on policies is still strong. The local “two sessions” show that there is an obvious trend of stabilizing the economy with investment, and after the monetary force exceeds expectations, the policies of other ministries and local governments are forming a joint force, and the “policy bottom” has been clear. Secondly, the emotional catharsis induced by the collapse of high-level groups is coming to an end. The short-term adjustment of the market deviates from both the trend of monetary easing and the fundamental trend of policy support. The differentiation of internal and external capital behavior is also evidence that the “emotional bottom” is coming. Finally, with the continuous improvement of the consensus on the main line of steady growth and the end of emotional catharsis, it is expected that market funds will resume inflow, and the “market bottom” is gradually approaching.
Closely follow the main line of “steady growth” and continue to layout high-quality blue chips around the “two low positions”. Specifically include: 1. For the varieties whose fundamentals are expected to be still low, focus on the midstream manufacturing suppressed by cost problems in the early stage, such as vehicle, lithium battery cell, photovoltaic equipment, etc., and the tax-free and entertainment content consumption whose fundamentals are expected to be still low; 2. For the varieties whose valuation is still relatively low, it is recommended to pay attention to the high-quality developers, building materials and home furnishing enterprises after the expected mitigation of real estate credit risk, the Internet leaders of Hong Kong stocks after the impact of medium concept stocks, and the fine chemical enterprises with the ability to develop new businesses such as new materials.
Securities: through the darkness before dawn! Steady growth relay, valuation repair is on the way
Guotai Junan Securities Co.Ltd(601211) Securities believes that since the beginning of 2022, China’s market has fluctuated downward, and the core reason is the negative disturbance at the denominator end. On the one hand, the expectation of overseas interest rate increase and table contraction was advanced, and the real interest rate rose rapidly. The 10-year US bond interest rate once hit 1.88%, and the NASDAQ index fell sharply by 7.55% during the week. As the inflection point of global liquidity has arrived, it will bring marginal fluctuations to China’s liquidity expectations from the perspective of asset allocation. On the other hand, China’s real estate credit worries and covid-19 epidemic twists and turns suppress risk appetite. We believe that overseas, although high interest rates will negatively suppress the equity market, the rise of low US bond interest rates will not have a severe impact on the valuation of US stocks, and the resulting “US stocks → A shares” risk transmission is relatively limited. At the same time, China is still in the window period of monetary policy easing, and the central bank actively “moves forward”. With the comprehensive reduction of reserve requirements in December and the reduction of MLF and LPR interest rates in January, the momentum of “steady growth” is further consolidated, and the negative expectations are accelerating to digest.
Industry allocation: grasp the value in value. The market value is relatively dominant, and the rate of correction of pessimistic expectations is superimposed according to the order of steady growth. It is recommended that: 1) consumption: accelerate the expected bottom, recommend the pigs, household appliances, furniture, social service / tourism, Baijiu and other directions that are supported by performance and negative expectations. 2) Infrastructure: improve infrastructure investment, help “revitalize infrastructure” exceed expectations in the future, and recommend building materials, construction, power operation and other directions; 3) Finance: securities companies and banks; 4) Consumer electronics.
China International Capital Corporation Limited(601995) : “steady growth” plus force, waiting for the “emotional bottom”
China International Capital Corporation Limited(601995) said that historically, the Chinese market often experienced a “policy bottom, emotional bottom and growth bottom” in turn in the cycle of bottoming and recovery. We believe that the “policy bottom” has been confirmed between September 30 and December last year at the central economic work conference, and the “emotional bottom” may be around from the near future to the early part of the first quarter, The “bottom of growth” is expected to appear around the first quarter to the second quarter. During the three rounds of obvious “steady growth” at the end of 2014, the end of 2018 and the beginning of 2020, the initial market performed poorly due to emotional inertia, and the growth style decreased significantly. After the relevant forward-looking indicators such as social finance, credit, infrastructure and real estate were repaired, the market tended to perform better after the improvement of market sentiment.
We expect that the above-mentioned emotional factors may still inhibit the market performance near the Spring Festival. In particular, the announcement by some real estate developers of overall default of overseas debt this week may also disturb the market sentiment. However, in the future, with the continuous introduction of “steady growth” policy details, the possible improvement of forward-looking indicators and the gradual stabilization of China’s growth, the market sentiment is also expected to be repaired. In terms of style, we believe that “steady growth” is still the main line of the future stage, and the space for sharp decline in the growth style may be relatively limited, but we may not be in a hurry to copy the bottom. We still maintain the previous “steady growth” style, which may last until about the end of the first quarter.
Industry configuration suggestions: the steady growth style may continue, and the manufacturing growth is waiting for a turnaround. 1) Areas potentially 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 consumption support, securities companies, etc; 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; 3) The short-term share price of the manufacturing growth sector with a large increase last year may be restrained, 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. The above three directions may overlap slightly, of which the first direction is more phased and needs to pay more attention to the policy rhythm.
China Securities Co.Ltd(601066) Securities: seize the opportunity of counterattack at present, and the two sessions after the festival are a favorable window
China Securities Co.Ltd(601066) Securities believes that positions should not be reduced at present and should be gradually increased next week. Three major negative concerns in the early stage: 1. Worry about the slow monetary policy and poor credit easing effect in China; 2. Insufficient incremental funds, and the issuance of new funds is lower than expected; 3. Fed hawks said global liquidity tightening expectations. Recently, it has been basically reacted by the market, or it will land or be excessively worried: compared with Hong Kong stocks and funds going north, the A-share market is pessimistic enough about the economic downturn. At present, China is in the “double width” cycle of wide money + wide credit, and there is still room for further easing in the follow-up. With the gradual force of the steady growth policy, the market doubts are expected to improve, and the benefits of interest rate cuts on the numerator and denominator will gradually appear. At the same time, after the Spring Festival, the market risk appetite has improved, the issuance of new funds has warmed up, and the FOMC meeting of the Federal Reserve next week makes the expectation of raising interest rates bearish, which is expected to form a favorable time window from after the Spring Festival to before the two sessions. At present, our view on the follow-up market has become more positive. It is suggested to cherish and grasp the upcoming counter attack market.
The steady growth market is not over, and growth stocks are expected to fight back. In terms of industry configuration, we believe that the market style will be relatively convergent in the subsequent counter offensive stage.
The steady growth market can still be deduced, and there is still room for absolute returns. However, since December, the relative return difference of the steady growth sector relative to the growth style has reached the upper limit level of the five steady growth markets since the financial crisis, and the steady growth may be difficult to have significant excess returns relative to high-quality growth stocks. Short term position reduction growth tangential to steady growth is of little significance, and high-quality growth stocks supported by the fundamentals of the first quarterly report are expected to rebound. Focus on industries: real estate, home appliances, banking, construction, electronics, new energy, food and beverage, etc. Focus on topics: digital economy, specialization and innovation, metauniverse, state-owned enterprise reform, etc
Haitong Securities Company Limited(600837) : the steady growth policy is clear, and the value and growth are expected to take turns
Haitong Securities Company Limited(600837) said that the spring market of A-Shares has never been absent in the past 20 years, and the spring market with the background of stable growth policy, such as 2012, the end of 2014 – the beginning of 2015 and 2019. The common characteristics of the steady growth spring market are: value first and then growth. In the early stage, the value of Shanghai and Shenzhen 300 and national securities led the rise, and in the later stage, the growth of gem and national securities led the rise. The steady growth policy is clear. The market background in spring is similar to that in the previous three times. The value and growth are expected to take turns, such as underestimated large financial real estate and hard technology of new infrastructure.
China Merchants Securities Co.Ltd(600999) : after stabilizing and recovering, the equity market will have a new round of opportunities
China Merchants Securities Co.Ltd(600999) said that at present, China’s economy is in the scenario of simultaneous decline of growth rate and inflation rate, which generally corresponds to weak stocks and strong debts; After stabilizing and recovering, the equity market will have a new round of opportunities. The US economy is overheating and is trying to control inflation. Overheating scenarios generally correspond to bond bear market and stock bull to bear market.
There are two reasons behind the obvious correction of US stocks since January. First, as the inflation rate continues to rise, the Federal Reserve will accelerate the reduction of bond purchase, and may start raising interest rates and shrinking the table within the year in 2022q2, resulting in the yield of U.S. 10-year Treasury bonds rising from about 1.4% to about 1.8% within one month; Second, the economy fell. In December, US retail sales and existing home sales turned negative month on month, and manufacturing PMI continued to decline.
Looking to the future, the best measure for the United States to deal with inflation is actually to accelerate energy production, rather than the Federal Reserve to accelerate contraction, which may lead to further decline of the U.S. economy and fall into the risk of stagflation. The stagflation environment is a bear for both stocks and bonds. For China, the current corporate earnings expectations are declining, so the stock market is underperforming. However, a new round of steady growth policies have been introduced one after another. If the recovery can be realized in 2021q1, a new round of opportunities should appear in the equity market. At the same time, as China’s trade surplus, capital inflow and RMB exchange rate remain high, it has the ability to implement the “I-oriented” policy and resist external shocks to a certain extent.
China Industrial Securities Co.Ltd(601377) : this round of market or similar “mini version 2014” is now the left layout window
China Industrial Securities Co.Ltd(601377) indicates that the market is still tangled in the bottom area. 1. This week, the MLF interest rate was lowered, the central bank said to “open the monetary policy toolbox more”, and the one-year and five-year LPR was lowered. The direction of policy easing has been clear, but the market is still skeptical about the rhythm and intensity of policy easing. 2. The Fed’s concern about raising interest rates and even shrinking the table, and the sharp rise in US bond interest rates led to a sharp decline in US stocks, especially technology stocks, which also dragged down China Shanxi Guoxin Energy Corporation Limited(600617) , semiconductors and other sectors.
The layout on the left is “mini version 2014”. 1) Grasping the main contradiction is now a time window for “steady growth” and “broad credit”: since the economic work conference in December 2021, the central bank has continuously reduced the reserve requirement and policy interest rate, issued the new special debt of 1.46 trillion in advance, and issued major projects in some provinces and cities in January earlier than in previous years. Various signals and data are constantly verifying the direction of marginal “wide credit”. 2) Referring to 2014, the policy relaxation tone was established in the first half of the year, and social finance basically hit the bottom in April, but the index market was not officially launched until the interest rate cut in November. Every tangle and adjustment has become a layout opportunity. 3) However, the difference between now and 2014 is that, on the one hand, 2014 is a comprehensive and systematic relaxation. At present, under the general tone of “no speculation in real estate and housing” and “no promotion in infrastructure”, the intensity and space of policy easing are relatively limited, which is more likely to be phased and underpinned relaxation. On the other hand, in 2014, it gradually evolved into a round of leveraged cattle. At present, the market leverage is weak, and institutional funds are still the dominant force in the market. Therefore, this round of market or similar “mini version 2014”, and now it is the left layout window.
Investment strategy: on the one hand, grasp the undervalued repair market of Finance and real estate, on the other hand, lay out “small high-tech” with long playing short and bargain hunting. For a long time, focus on the five directions of scientific and technological innovation. 1) New energy (new energy vehicles, photovoltaic, wind power, UHV, etc.), 2) new generation information and communication technology (artificial intelligence, big data, cloud computing, 5g, etc.), 3) high-end manufacturing (intelligent CNC machine tools, Siasun Robot&Automation Co.Ltd(300024) , advanced rail transit equipment, etc.), 4) Biomedicine (innovative drugs, CXO, medical devices and diagnostic equipment, etc.), 5) Military industry (missile equipment, military electronic components, space station, space shuttle, etc.).
Huaxi Securities Co.Ltd(002926) : before the festival, the risk appetite of the A-share market decreased slightly, and the A-share market still showed the characteristics of structural market
Huaxi Securities Co.Ltd(002926) said that the market power of incremental funds is insufficient recently, and the market sentiment may be light. 1) Net sales of financing funds for five consecutive weeks, and the proportion of financing purchases in the turnover of A-Shares was 6.67%, which fell below 7% for the first time since 2020, at a low level in recent three years; 2) Since the beginning of the year, the average interval returns of equity funds and partial equity hybrid funds are – 4.70% and – 6.18% respectively. The lack of profit-making effect corresponds to the cooling of the fund issuance market, and the issuance of equity funds is relatively flat; 3) The all a equity risk premium is above the median since 2010, and the turnover of A-share market has also shrunk in the past five days, indicating that the risk appetite of A-share market decreased slightly before the festival.
Investment strategy: the shock remains the same, and we should follow the main line of “stable growth”. Near the Spring Festival, A-Shares are affected by the disturbance of the Federal Reserve’s monetary policy and the uncertainty of the news before the long holiday. The power of incremental funds to enter the market is insufficient, and A-Shares still show the characteristics of structural market. Since December, China’s steady growth policy has made forward-looking efforts. The central bank has successively lowered reserve requirements and interest rates, and there is still room for subsequent interest rate cuts. The market is in a “wide money” window period, and macro liquidity is expected to remain relatively loose. Structurally, “wide credit” is the ultimate demand of the central bank for wide money. Infrastructure and real estate are important. The real estate regulation policy is expected to be marginal loose. Urban renewal, affordable housing construction and new infrastructure are the key directions. In terms of configuration, it is suggested to focus 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.
Guosheng Securities: there is no agitation, but there is no need to be pessimistic. The market in the lunar new year can be expected
Guosheng Securities believes that since December last year, real estate sales, new construction and other data have deteriorated again, and the real estate chain continues to become an economic drag. The risks at the real estate side and the weakness of front-end data also mean that there is a need for further easing at the policy side. The signal released by the 5-year LPR reduction is of greater significance. The policy bottom has been clear, and the probability will be substantially loosened in the future. Before the real reversal of economic data, the easing intensity may be amplified step by step. The credit conditions have ushered in a real sense of stabilization, and the m1-ppi scissors gap has been repaired upward. The policy easing, credit stabilization and market expectation are expected to gradually return to a virtuous circle. In the stage of weak credit and economy in history, the success rate of large finance is the highest.
With the digestion of growth, it is expected to open a resonance market after the Spring Festival.
Strategic suggestions and industry recommendations: (1) steady growth is still the largest beta main line in Q1. High quality banks, state-owned enterprise developers, buildings / building materials are recommended; （2） The new infrastructure development direction is: wind and solar energy storage, power operation and communication; （3） Auto parts and household appliances with reversed upstream costs benefit from low valuation and concept catalyzed media.
Minsheng Securities: risk linkage and infection, but hope is breeding
Minsheng Securities said that last week, the overall A-share market was still down, the market and value style led, and the small and medium-sized growth style led the market. The return of value is becoming a market consensus. At present, two risks are already on the way of Pricing: first, the synergy of Chinese and American stock market styles is rising; Second, in the process of market adjustment, the “contagion” between heavy positions may have begun to affect the market. It is impossible to predict the end of short-term fluctuations, but the market opportunity is already emerging. Investors should not only focus on the risks in the market, but rather think ahead rather than stop.
The portfolio avoiding the problem of aggregate economy is falling into the pressure of retreat and continuous adjustment. It seems like a “desperate situation”, but it is also forcing investors in the whole market to gather a new consensus. We cannot expect the end of short-term fluctuations, but market opportunities are already emerging. Investors should not only focus on the risks in the market, but rather think ahead rather than stop. Our suggestion is: pay attention to the recovery of credit, pay attention to the elasticity of inflation, and embrace the return of value. Recommended: nonferrous metals (copper, aluminum, gold), banks, coal, real estate, steel and crude oil (oil and gas exploitation, oil transportation). On the theme, Rural Revitalization (digital government, county consumption) is recommended.
