Haitong Securities: Market likely in bottom area, big finance a focus
Financial News Agency, January 21 – In a recent strategic weekly report, Haitong Securities has predicted that the current market is likely to be in the bottom area. The report states that from the perspective of adjustment time, space, and valuation, the current adjustment space of the CSI 300 is close to the historical average level.
The report highlights that the current decline of the CSI 300 has lasted for 35 months, with the maximum decline reaching 46%. Additionally, the valuation level of A-shares is relatively close to the historical bottom. As of January 19, 2024, the rolling three-year PE and PB quantiles of all A-shares have dropped to around 0%, indicating that the valuations are at historically low levels.
Haitong Securities advises that investors should closely track the pace of changes in capital and fundamentals, and pay attention to the implementation of specific measures related to stabilizing growth, especially the implementation of the “three major projects” and their supporting policies. Furthermore, the report suggests focusing on big finance in stages and the growth of White Horse in the mid-term.
The report notes that as growth is stabilized and risk prevention policies are stepped up, big financial companies, whose valuations have been under pressure since this year, may experience phased performance. In the medium term, the current price-performance ratio of the White Horse Growth Sector is gradually becoming more and more prominent.
Drawing on the historical A-share earnings upward cycle, the report emphasizes that the White Horse Growth Sector has performed better, with specific emphasis on hard technology manufacturing and medicine represented by electronics. As such, investors are advised to pay attention to big finance and the growth of the White Horse sector in the coming months.