(Original title: A-share “starts off to a good start”, 8 well-known private equity companies look forward to the market in 2023!)
The A-share market will have a “good start” in 2023. The Shanghai stock index has risen for two consecutive days and closed at 3123.52 points this Wednesday. Recently, Chongyang Investment, Star Rock Investment, Renqiao Assets, Qinghequan Capital, Zhongou Ruibo, Qinchen Assets, Shicheng Investment, Hanchuan Investment and many other well-known private equity companies have published their latest strategies for 2023. , market trends and investment opportunities for outlook and analysis.
Mr. Fund sorted out the core views of 8 well-known private equity companies:
Chongyang Investment: 2023 will be a turning point for the Chinese economy. A new round of mid-level market is brewing, and the market may usher in a “Davis double-click” in which valuation expectations and earnings expand together. We are optimistic about the field of self-reliance and self-improvement in science and technology. There is still a lot of room for in-depth exploration of related topics after the epidemic.
Renqiao Assets Xia Junjie: 2023 is a year of opportunities far outweighing risks. The undervalued style is expected to return to the center of the stage. The performance of Hong Kong stocks is more to be expected. The potential and stamina of consumption should not be underestimated. The new energy industry may experience a washout Brands and industries cleared.
Qinghequan Capital: A shares have ushered in four major turning points, and valuation restoration is expected. The key industries to be laid out include optional consumption, building materials, new chemical materials, Internet and energy storage.
Star Rock Investment Yu Zongliang: The domestic epidemic situation is repeated, the real estate market is sluggish, overseas is expected to usher in an inflection point due to rapid interest rate hikes under high inflation. In 2023, with the revival of China‘s economy, domestic demand will continue to advance. It is judged that this year’s domestic and foreign demand will be interchangeable. The domestic demand sector is expected to Usher in the return of value.
CEIBS Ruibo Wu Weizhi: The probability of structural bullishness in China‘s capital market this year is relatively high, and areas such as high dividends and low valuations, cycle reversals, and epidemic reversals may benefit more; high-growth stocks with reasonable valuations, 2023 The probability of positive annual returns is still very high.
Cui Ying of Qinchen Assets: It is expected that after the second quarter at the latest, the domestic economy is expected to usher in a wave of obvious post-epidemic recovery. Market risk appetite is expected to bottom out and rebound. We are optimistic about the machinery and pharmaceutical sectors with a mid-term boom reversal. Pan-security assets may maintain a high level of prosperity. In the next stage, we will strengthen our focus on pro-cyclical sectors.
Shicheng Investment Chen Jialin: I am full of expectations for the economic recovery in 2023, and I believe that Pan Medicine is expected to take over consumption and become a star in 2023. In the process of economic restart, coordinating development and security is also the meaning of the topic.
Hanchuan Investment: I believe that the marginal optimization of capital and sentiment in 2023 is highly probable, and market opportunities will mainly be corrective stage valuation repairs. Subdivided industries such as consumption and the Internet have opportunities for valuation restoration.
Chongyang Investment: 2023 will be a turning point for China‘s economy
The market may welcome the “Davis double-click” of valuation and profit expansion
Looking back on 2022, Chongyang Investment stated that under the multiple impacts of the Russo-Ukraine war, the second outbreak of the epidemic, and the Federal Reserve’s unexpected interest rate hike, China’s capital market encountered a rare “Davis double kill”. “However, looking forward to 2023, we believe that the A-share and Hong Kong stock markets may have formed a medium-term bottom in the next 2-3 years. Although the market may still have ups and downs in the short term, a new round of mid-level market is brewing, and the market may usher in an overvaluation. A ‘Davis double-click’ where value expectations and earnings co-extend.”
Specifically, according to the analysis of Chongyang Investment, in terms of profitability, with the adjustment and optimization of domestic epidemic prevention and control policies in 2023, the certainty of virus mutation is expected to be transformed into the certainty of the economic environment, and the confidence of market players will be significantly restored. The credit contraction on both sides of real estate supply and demand is coming to an end. 2023 will be a turning point for China‘s economy. The GDP growth rate will start to recover from the second quarter, and the annual growth rate is expected to reach more than 5%, corresponding to a 5-10% increase in the net profit of A-share listed companies.
In terms of interest rates, the central government’s monetary policy for 2023 is “precise and powerful”, which means that direct credit tools will still be the first choice of policy, and the reduction of the total reserve ratio, especially the interest rate reduction policy, may be more restrained. The domestic risk-free interest rate There is a high probability that the shock pattern will be maintained. The Federal Reserve may remain hawkish in communication in 2023, keep the benchmark interest rate unchanged in the second half of 2023, and cut interest rates rapidly in 2024 after the certainty of inflation declines. In the case that the market has relatively fully priced in the US interest rate hike expectations, the US long-term bond interest rate and the US dollar exchange rate may have peaked, and the global liquidity environment is generally improving.
In terms of systems, the downturn in the A-share market does not change the trend of two-way expansion. The risk of delisting Chinese concept stocks has been substantially reduced. The personal pension system will bring long-term funds to the capital market. In terms of scale, it is estimated that my country’s personal pensions are expected to exceed one trillion yuan within five years.
In terms of risk appetite, the biggest highlight of macro policies in 2023 is to release economic vitality through the adjustment of epidemic prevention policies and contractionary policies in other fields, which will greatly increase the risk appetite of market players.
Therefore, in terms of the market, Chongyang Investment believes that with the release of economic vitality and the improvement of market risk appetite, there are considerable opportunities for valuation restoration in both A-shares and Hong Kong stocks. Among them, under the extreme valuation level, Hong Kong stocks have benefited from the liberalization of the domestic epidemic situation, the increase in the policy of stabilizing growth and the easing of dollar liquidity. The room for valuation repair may be greater than that of A shares.
In terms of structure, Chongyang Investment is most optimistic about companies with both short-term recovery flexibility and long-term growth logic, especially companies related to the field of technological self-reliance and self-improvement. At the same time, there is still a lot of room for in-depth exploration of related topics after the epidemic. This includes not only possible retaliatory consumption after the epidemic, but also possible compensatory investment in certain industries after the epidemic, as well as areas where the supply structure of the industry has improved significantly during the epidemic.
Renqiao Assets: The undervalued style is expected to return to the center of the stage
The new energy industry may experience a reshuffle
Overall, Xia Junjie, general manager of Renqiao Assets, believes that 2023 is a year in which opportunities far outweigh risks.
First of all, in 2023, the style transformation will be further deduced, and the undervalued style is expected to return to the center of the stage. After more than three years of a growth style cycle, the value style has gradually returned since 2022, but in a unilaterally declining market in 2022, the value style represented by the SSE 50 has only gained limited gains. It is only relative income, far from the goal of absolute income. In 2023, in the process of the overall recovery of the market, the value style is expected to stand out, and we are optimistic about the performance of undervalued core assets. Of course, Hong Kong stocks are the home of undervalued core assets, and their performance in 2023 is even more worth looking forward to.
Secondly, in 2023, the potential and stamina of consumption cannot be underestimated. With the recovery of real estate policies and the liberalization of epidemic control, China‘s domestic consumption will show vitality. Summarize the consumption data of the United States, Japan, Singapore and other countries after the release of epidemic control. Among them, there are some common directions worth learning from. Overall, the recovery of commodity consumption is significantly better than that of service consumption. Among them, housing and home furnishing, luxury goods, sporting goods and beverages are the strongest recovery. As for whether China‘s consumption recovery will follow this path, Wait and see.
Again, in 2023, the new energy industry will undergo a reshuffle and clear the industry. As a typical cyclical growth stock, the new energy industry has fully demonstrated its growth in the past three years. The installed capacity of the photovoltaic industry has reached a new level, and the penetration rate of new energy vehicles has also reached a new height. Until recently, the strongest link in the industry began to loosen, and the price of photovoltaic silicon materials and lithium carbonate began to adjust. Behind this is the result of the combined effect of supply and demand. Demand is gradually slowing down, and supply is rapidly releasing. Therefore, the cycle The power will only be late, and will not be absent. The curtain of industry adjustment has officially opened. The industry will experience a painful reshuffle, the total profit will decline, and some links will even suffer losses. In the end, only the real production capacity can be saved. Industry, a new round of rising cycle may come again.
Finally, there is a risk that the domestic economy will overheat in 2023. This time, the two major engines of real estate and consumption will be activated almost at the same time, which is rare in domestic history. When the economy really shows signs of overheating, investors will inevitably start to worry about inflation and monetary policy. The good thing is that in 2023, many domestic industries will be in a cycle of releasing production capacity, including the pig cycle. It is expected to hover at a low level. Therefore, for the whole year, inflation is likely to be controllable, but it may be different in 2024.
Qinghequan Capital: A shares ushered in four major turning points
Optimistic about optional consumption, building materials, new chemical materials, etc.
Looking back on the past, Qinghequan Capital believes that in 2022, major assets will be in a “stagflation” cycle, global risk assets will be under substantial pressure, and A shares will also face multiple shocks at home and abroad. Looking forward to 2023, large-scale assets are expected to switch to the “recession” quadrant, and valuation pressure will ease, while the A-share market has ushered in multiple turning points, and it is expected to start repairing from a low level. “We believe that the market is expected to get out of ‘stagflation’ in 2023. To a certain extent, we can refer to 2019. A shares are expected to usher in valuation restoration.”
Standing at the moment, Qinghequan Capital believes that A-shares have ushered in four major turning points, one is the major optimization of China‘s epidemic prevention policy, the other is a comprehensive shift in China‘s real estate policy, the third is that overseas inflation has confirmed the turning point, and the fourth is that the Fed’s tightening policy is retreating . “Although the road to economic restart in the future still faces obstacles, and the rebuilding of market confidence is not smooth, we are full of expectations for the market in 2023.”
Regarding the market environment in the new year, Qinghequan Capital believes that there are three characteristics: First, the atypical recovery of the Chinese economy. The second is the alternation between economic development and security. Third, the Fed’s interest rate hike will come to an end. “So, in the main line of investment, we believe that there are more opportunities in the consumption chain and real estate chain in the first half of the year, and the opportunities in the safety chain are expected to spread in the second half of the year.”
Qinghequan Capital said that since 2022, the market has shown three major characteristics: increased volatility + industry rotation + style rotation. There are changes in some macro long-term factors behind it, such as deteriorating economic stability + rising interest rate center + weakening growth sustainability. Therefore, the new market characteristics may continue in 2023. Investment refinement and portfolio balance are the future responses .
In terms of investment direction, Qinghequan Capital stated that along several promising main lines, the key layout industries include optional consumption, building materials, new chemical materials, Internet and energy storage. In addition, the risks that may exist in the market focus on three aspects: first, whether the recovery of domestic demand in China will be weak; second, whether there will be a deep recession overseas; third, whether overseas inflation will be deeply rooted.
Starstone Investment: The domestic demand sector is expected to usher in a return of value
Looking back on 2022, Yu Zongliang, chief research officer and deputy general manager of Star Rock Investment, believes that the domestic epidemic situation is repeated, the real estate market is sluggish, and overseas interest rates are being raised rapidly under historically high inflation. “Internal stagnation and external inflation” are the core factors that suppress the trend of A shares . Looking forward to 2023, the above three mountains are expected to usher in an inflection point. As China‘s economic revival and domestic demand continue to advance, it is judged that this year’s internal and external demand will be swapped, and the domestic demand sector is expected to usher in a return of value.
Specifically, the risk of overseas recession will increase in 2023, and the fundamentals of export-oriented industries will be under pressure. Since the second half of 2022, the impact of the Fed’s interest rate hike on the economy has accelerated, and the fundamentals require that monetary policy be suspended and tightened; however, supply factors such as geopolitical factors, energy transformation, and labor shortages will raise the long-term center of inflation, and the Fed’s high interest rate may last for a long time , there is a possibility of an unexpected recession in external demand.
Yu Zongliang said that as the decline in external demand deepens, the policy of stabilizing domestic demand has entered a period of force, and the Central Economic Work Conference has made it clear that expanding domestic demand will become the strategic focus of the next stage. On the one hand, changes in the epidemic prevention policy will drive the recovery of employment, which will further increase income growth, thereby promoting the recovery of consumption; in the process of economic recovery, consumer confidence will gradually recover, thereby promoting the release of excess savings and enhancing flexibility. On the other hand, real estate sales and investment have fallen back to close to the long-term equilibrium level. With the strengthening of real estate policies and the gradual fading of the impact of the epidemic, the drag of real estate on the economy will be significantly weakened.
Therefore, in terms of investment direction, we are optimistic about the return of domestic demand value. Revisiting the past few rounds of downward cycles of external demand. After the strengthening of policies to stabilize domestic demand, consumption generally performed better. It is expected that this cycle will be similar. In addition to demand recovery, the supply side of the consumer industry in this cycle is better than any previous period. Under the dual effects of supply and demand, the profitability of the consumer industry will be significantly enhanced.
According to Yu Zongliang’s analysis, since 2012, more and more domestic demand industries have shown the characteristics of slowing down the total growth rate but optimizing the pattern; and under the impact of the three-year epidemic, the willingness and ability of enterprises to spend capital have become weaker, and the industry supply curve has become weaker. The lack of flexibility has become increasingly inelastic, and the pricing power of leading companies has increased significantly. With the support of a large supply clearing, once the recovery of demand reaches the equilibrium point, a small increase in demand may bring about a rapid rise in prices. After changes in overseas epidemic prevention and control policies, consumer prices have generally rebounded. In the past two years, the capital expenditure of some export-oriented industries with high prosperity has increased significantly, and they may face a situation of increasing supply and slowing demand in the future.
“Overseas, the Fed’s anti-inflation target is still under pressure, and the persistence of high policy interest rates may exceed expectations. The current domestic fundamentals are still sluggish, and the remaining liquidity is still at a historical high in the short term. However, with the recovery of demand, the excessively loose remaining liquidity The property will gradually return to neutral, and the domestic demand field whose valuation is in the historically low quantile is better.” Yu Zongliang said.
China Europe Ruibo: China‘s capital market may welcome a structural bull market this year
Areas such as high dividends, low valuations, cycles and epidemic reversals will benefit
In terms of overseas markets, Wu Weizhi, chairman of China Europe Ruibo, believes that after the round of decline in U.S. stocks in 2022, the risk of high valuations has been released to a certain extent, but considering that this round of Fed rate hikes and dollar appreciation is still in the process, For many enterprises and financial institutions, the real recession test has not really come before them. In layman’s terms, it is necessary to let the bullets of high interest rates and recession fly for a while. But in the era of rapid information transmission, this effect may not last a whole year. It is not ruled out that the U.S. capital market will fully respond to the U.S. economic recession in the first half of the year. If so, will the U.S. capital market go out of a trend of first decline and then rise in 2023? Not sure, but anything is possible.
“However, for high-quality companies in the U.S. stock market, it is rare to face a recession that triggers panic selling by investors. From the perspective of long-term investors, it must be a rare strategic opportunity that cannot be missed. Perhaps it is like digging out stocks in 2022. It’s like a deep pit.” Wu Weizhi said.
In terms of China‘s capital market, Wu Weizhi said that after the release of continuous structural adjustments in the past few years, the overall valuation of the market is not expensive, and many areas are even historically underestimated. Superimposed on the background of stabilizing the economy in 2023, the monetary and fiscal margins will remain loose, so it is positive for the economy and the capital market.
Wu Weizhi believes that historically, the greater the pressure of the international economic recession, the greater the urgency of domestic start-up investment and consumption. Therefore, even if the global environment does not support full-scale bulls and bubble bulls, the probability of structural bullishness in China‘s capital market is still relatively high. “For high-growth stocks with reasonable valuations, the probability of positive returns in 2023 is still very high. For areas with high dividends and low valuations, cyclical reversals, epidemic reversals, etc., we believe that these areas will be in the structural bull market in 2023 It will be a more beneficial area.”
Qinchen Assets: The economy is expected to usher in a wave of obvious post-epidemic recovery
Focus on machinery and medicine, pan-security assets, procyclical, etc.
Looking forward to 2023, Cui Ying, a partner of Qinchen Assets, believes that inflation in the United States, China’s epidemic control, and European wars and energy crises all have a tendency to ease: the month-on-month growth rate of the core CPI in the United States has returned to 0.2-0.3% for two consecutive months , although the market is still worried that the height and duration of the final interest rate will exceed expectations, but as the US inflation enters the top area, global liquidity is likely to enter an inflection point; It is a “twist and twists and turns”, but with reference to international experience, it is estimated that after the second quarter of 2023 (low base in 2022), the domestic economy is expected to usher in a wave of obvious post-epidemic recovery; and the Russo-Ukraine war is approaching an inflection point, for oil prices and the world The spillover effect of inflation has been significantly weakened.
Cui Ying pointed out that whether the market in 2023 can be similar to the strong rebound in 19 years depends on the degree of real estate recovery, which should be more important than forecasting. However, under the background of a low base in 2022, it is relatively easy to judge that the real estate drag on the economy will drop significantly in 2023. In 2023, market risk appetite is expected to bottom out and rebound, and there should be more market structural opportunities than in 2022.
In terms of investment direction, Cui Ying is optimistic about the machinery and pharmaceutical sectors where the mid-term boom is reversed. The possible short-term chaos and lack of work after the release of epidemic control have limited impact on the manufacturing industry. Under the background of economic de-localization, the added value and contribution rate of the manufacturing industry have increased, and the export share of China‘s high-end manufacturing industry has confirmed. The trend of localization is clear. After the epidemic control is loosened, areas such as traditional Chinese medicine and pharmacies will definitely benefit, and the recovery of related demand after the epidemic is the more rigid “must-choice consumption”.
The poor performance of pan-security assets at the end of 2022 is more because the market has previously allocated such assets as safe-haven assets. Emphasizing the security of the country’s supply chain after the COVID-19 epidemic is a common phenomenon in countries all over the world. Especially after the Central Economic Work Conference emphasized high-quality development, pan-security assets are expected to maintain a high degree of prosperity under the background of policy support, including industrial instruments and meters, Localization in fields such as computer and military industry.
The probability of economic fundamentals bottoming out in 2023 is high. Although the short-term Reopen will bring pressure, it is expected to usher in a “post-epidemic recovery” after mid-2023. Confirm the superposition of “government-directed stimulus” policy. From the perspective of the economy in 2023 The upside risk is greater than the downside risk. In the next stage, we will pay more attention to the procyclical sector, especially some central state-owned enterprises in the procyclical field combined with the valuation system with Chinese characteristics. continuous improvement in communication and other aspects.
Shicheng Investment: full of expectations for economic recovery
Pan Medicine is expected to take over consumption and become a star in 2023
Chen Jialin, founder of Shicheng Investment, said that the key word in 2023 is restart. This restart will happen simultaneously in all areas, from the economy to social life to capital markets. Looking forward to the economic recovery in 2023.
Among them, consumption is undoubtedly an important starting point for economic recovery in the New Year. However, the service consumption sector related to economic restart and travel in the secondary market has long been “preempted”. In the field of pan-consumption, only one type of individual stocks can enter the “eyes of justice”: the fundamentals are damaged by the macro and the industry, while the company’s own excess operating capacity remains good, and the stock price is also significantly damaged companies and their stocks.
In comparison, I look forward to the restart of the pan-pharmaceutical sector. Combined with the positive changes in industry policies, certainty of the external business environment, transaction structure, etc., the price/performance ratio of the pan-pharmaceutical sector after a full correction has reached a new equilibrium, and its attractiveness has increased significantly. Although the stock price has rebounded slightly recently, the trading enthusiasm is still moderate, far from being overheated. It is believed that Pan Medicine is expected to take over consumption and become a star in 2023.
Following the line of industry policy, Shicheng Investment has upgraded the investment rating of the Internet platform economy in 2023.
In addition, in the process of economic restart, coordinating development and security is also the meaning of the topic. In terms of ensuring the independent controllability, safety and reliability of the industrial chain and supply chain, the manufacturing industry represented by the energy revolution presents a broad space for investment.
Hanchuan Investment: Marginal optimization of funds and emotions is highly probable
Consumption, the Internet, etc. have opportunities for valuation restoration
Regarding the macro and the market, Hanchuan Investment believes that this year the market will bring more support and overall stability due to the marginal improvement at the macro level, but at the same time, it will continue to reshape investment methods in the development trend of the political and economic levels the process of.
Compared with 2022, Hanchuan Investment said that it believes that the marginal optimization of capital and sentiment in 2023 is highly probable: First, the process of raising interest rates in developed markets in Europe and the United States to curb inflation is approaching a critical point and has to be constrained by potential recession. In the face of a possible local economic recession, the possibility of capital reallocation to emerging markets has increased; secondly, although the phased trend of the global political game is still unclear, with the liberalization of control, at least one demand and supply in China will be suppressed Factors are withdrawn faster than expected, and the recovery of domestic consumption and investment confidence will help improve market sentiment. In this slow recovery process, domestic interest rates are expected to remain low for a considerable period of time.
Hanchuan Investment believes that before the re-emergence of the overall economic growth driver, market opportunities will mainly be corrective stage valuation repairs, while opportunities at the “Alpha” or individual stock level are scarcer, but long-term elastic. It will also be bigger. Under the premise of high-quality development, common prosperity and other principles, stock market investment may also continue to change from “big and big” to “small and beautiful”.
Regarding investment opportunities, Hanchuan Investment stated that China‘s economy is highly resilient, and at the portfolio level, considerable allocation space has been reserved for individual stock investments with “new” performance growth that brings value increments, including new materials, general equipment, and metals. There are many targets related to processing and new energy; at the same time, the market has also accumulated a lot of valuation restoration trading opportunities in sub-sectors, such as consumption and the Internet.