Top 10 Brokerage Strategies: Fixing the Market Is Near?Continue to focus on the main line of steady growth
The Financial Associated Press reported on May 29 that the A-share market experienced volatility this week under the background of the National Convention and the Economic Stabilization Teleconference. As local and local consumption-promoting policies have entered a period of intensive introduction, the expectation of stabilizing growth policies is gradually being fulfilled.
CITIC Securities: A package of policies to stabilize the economy is expected to take effect in a concentrated manner The main market is approaching
Entering June, after the epidemic is effectively controlled, a package of policies to stabilize the economy is expected to take effect in a concentrated manner. The stage of the greatest overseas disturbance pressure has passed, and it has begun to gradually ease. The slow rise is the characteristic and will last for several months, and the four main lines will be firmly laid out.
First of all, from the perspective of the internal environment, since the second quarter, the policy of stabilizing growth has been fully rolled out, but the repeated epidemics have made it difficult to release the policy synergy. It is expected that the epidemic situation nationwide will be fundamentally improved in June. The economy has shown signs of recovery, and it will begin to enter the accelerated recovery phase in June.
Secondly, from the perspective of the external environment, under the heavy pressure of overseas inflation, the Sino-US trade environment may improve in stages, the Fed’s expectation of raising interest rates has passed the peak, the rising risk of US economic recession may further ease the expectation of interest rate hikes, and the conflict between Russia and Ukraine is increasingly It is clear that the period when the biggest shock to global commodity markets is expected has passed.
Finally, the liquidity of the A-share market has improved significantly recently, and the current position of investors with absolute returns is still relatively low. With the accelerated improvement of the internal and external environment, the main market for medium-term repair is approaching, and we will firmly deploy modern infrastructure, real estate, resumption of work and production and consumption. Repair the four main lines.
Industrial Securities: “New Half Army” will enter the verification period and layout period in June
June will be a window to take advantage of volatility and lay out for the long term. 1) For the market as a whole, after the oversold rebound in May, as the United States re-entered the window of interest rate hike and balance sheet reduction, and the domestic market entered the verification period from “speculation expectations”, the market is likely to return to shock consolidation in June. 2) For the “new half army”, on the one hand, the rebound is more significant, on the other hand, the three driving factors have entered the verification period, and the “new half army” may experience periodic fluctuations in June. 3) But from a medium-to-long-term perspective, we believe that after experiencing a substantial underperformance in technological growth in the first quarter, after the market is relatively balanced in the second quarter, the style in the second half of the year will gradually return to technological innovation represented by the “new half army”, and Take the lead in leading the market out of the bottom.
Specific to the sub-sectors: 1) In the “new semi-military”, the direction of strong immunity and high prosperity: photovoltaic modules/silicon wafers, new military materials/structural parts, wind power machines/upstream materials, semiconductor materials/ Equipment, 5G fiber optic cable. 2) Consumption core assets (alcohol, duty-free, aviation, scenic spots and hotels): On the one hand, benefiting from the improvement of the domestic epidemic situation, the lockdown has been gradually lifted in various places. On the other hand, the stock price and valuation of the sector are already at a low level, and both internal and external uncertainties can attack and retreat. 3) “Stable growth” sector (infrastructure, real estate, banking, etc.): On May 25, the State Council held a national teleconference on stabilizing the economy and urging the implementation of the “stable growth” policy. At the same time, global markets remain in a chaotic mess of high volatility and low risk appetite. Infrastructure, real estate, banking and other sectors are both safe and policy-driven.
Guotai Junan: The eating market is coming to an end, not fighting, but starting to switch
The eating market is coming to an end, and it is not suitable for chasing high. It has been more than a month since the A-share market rebounded on April 27, and the oversold sectors have been significantly repaired. The automotive sector has risen by 25%, the new energy sector has risen by 21%, and the military sector has risen by 19%.
Many investors see this market rally as the worst of times have passed and economic expectations have improved. However, if the above logic is correct, the damaged sectors related to the economic cycle and affected by the epidemic should be significantly repaired, but the downstream consumer sector is the weakest in the rebound.
Analysts have generally lowered profit forecasts for broad-spectrum industries since May, and weak bill interest rates continue to reflect sluggish financing demand. The above all show that the current round of food market has no direct connection with the fundamentals, and more comes from the revision of the pre-expected risk awareness (such as epidemic control, US bond interest rates, policy space, etc.). However, after the stock market rebounded, the revision of risk perception, especially the expectation of stable and unstable policy growth, has moved from divergence to consensus, and the divergence of policy effects is still very high. We can see the willingness of traders to participate in this round of rebound. Very low, the strong stocks that rebounded in the early stage began to weaken, indicating that the eating market has entered the middle and late stage. After the middle and early June, the demand judgment will re-dominate the market, so don’t fight.
A-shares are in the stage of bottom-building and bottom-grinding, but the real main line of investment will begin to emerge. After the previous adjustment, the stock valuations of most industries are already at historically low levels. In addition, investors have a clearer view of the market bottom. Therefore, the psychological state is very different from the panic in January-April. In the down market, the index opportunities are lackluster, but the opportunities for individual stocks will be more active. Recommendations: 1) Public investment sector: construction/power grid/light and wind power/consumer building materials. 2) The direction of holding physical assets and having stable cash flow: coal/chemical resource products/second-tier central state-owned enterprise real estate. 3) Layout supply-side optimized consumption: live pigs/food and beverages/hotels, and technology leaders in Hong Kong stocks.
GF Securities: On the right side of the “credit bottom”, what clues are there for “recovery transactions”?
The most pessimistic moment of China’s economic policy has passed, and “steady growth + steady employment” is imminent. After this week’s National Regular Meeting and the State Council’s meeting on stabilizing the economic market, local policies have been intensively implemented, involving promotion of consumption, stabilizing employment, and stabilizing industrial growth.
“China’s recovery” is the key word in the next stage, looking for clues for post-epidemic reconstruction according to the level of supply and demand repair.
The core contradiction of A-shares has been transformed into “the Fed is resolutely tight, and the bottom of China’s credit has been seen”, and the market has changed from a slump to a richer structural opportunity. It is recommended to focus on value stocks first, followed by small-cap growth stocks (below 50 billion) that benefit from the improvement of the private credit environment, are limited by the Fed’s tightening and have an uncrowded transaction structure. Carbon transformation and leveraging have been carried out. Suggested configuration: 1. “Old-style” steady growth (real estate/consumer building materials/home appliances/banks); 2. “Supply and demand gap” inflation-beneficial resources/materials (coal/copper/potash fertilizer); 3. Benefit from the improvement of private enterprise credit and Small-cap growth stocks with more attractive odds (photovoltaic modules/semiconductor equipment).
CICC: “Steady Growth” Continues Its Forces
The A-share market has been volatile and rebounded since the end of April, and the year-to-date decline of the index has narrowed. During the recent rebound in major overseas markets such as the United States, the performance of A-shares has temporarily lagged behind. We believe that there may be several reasons: 1) China’s economic situation was affected by internal and external disturbances from April to May, and the policy of stabilizing growth since the meeting of the Political Bureau of the Central Committee at the end of April After a further increase, after more than a month of rebound, investors may pay more attention to whether the fundamentals show signs of stabilization; 2) The positive progress of the epidemic in Shanghai and other places is also one of the main factors for the early market rebound. At the current time, the market may I began to look forward to the rhythm of orderly recovery in major cities; 3) The A-share market showed strong resilience during the decline in overseas markets in the early stage. Recently, sentiment has been repeated, and the rebound momentum has weakened due to the withdrawal of some short-term profitable funds.
From the perspective of the market outlook, after the rebound has continued for a period of time, we believe that the focus of the market has shifted from the previous policy warming and the inflection point of the epidemic to paying more attention to whether the stabilization of the fundamentals can be confirmed, which may become the market trend in the next stage. key. At present, the local epidemic situation in Shanghai, Beijing and other countries continues to improve. With the subsequent resumption of work and production, it is expected that concerns about growth will be alleviated marginally. We reiterate that the current market has some characteristics of bottoming out in terms of policies, valuations and capital sentiment, and the market already has mid-line value; the market environment still has certain challenges, and more room for further upside requires more positive fundamental catalysts, especially The month-on-month improvement in profit expectations may be more important. In the future, we will focus on the restoration of domestic fundamentals, including real estate and consumer demand. Structurally, we believe that the low-valued “stable growth” field still has certain allocation value; the growth style is under the uncertainty of the macro environment, and the opportunity to switch remains to be seen.
Configuration suggestion: focus on “stable”, defend first and then attack. We recommend focusing on three directions for now:
1) Some areas of “steady growth” or policy support: infrastructure (traditional infrastructure and some new infrastructure), building materials, automobiles and housing-related industries have policy expectations or actual policy support;
2) Fields with low valuation and relatively low correlation with macro fluctuations, especially some high dividend fields: such as infrastructure, power and public utilities, hydropower, etc.;
3) Some areas where the fundamentals have bottomed out, the supply is limited or the prosperity continues to improve: agriculture, some non-ferrous metals and some chemical sub-sectors, coal, and photovoltaic and military industries.
Guosheng Securities: Signals from left to right
For the current market, the easing in the aggregate sense is no longer the focus. The core lies in whether the endogenous credit expansion represented by the medium and long-term loans of enterprises can be realized. From a fundamental point of view, the opening of credit channels is the key to boosting risk appetite. Since the epidemic in 2020, the endogenous credit trend characterized by long-term corporate loans has actually determined the trend of the broader market.
To sum up, after a monthly rebound, the market’s oversold momentum and space have basically been realized. The current situation of credit entities is not optimistic. It is necessary and urgent to improve macro policies. After the disturbance of the epidemic, stable growth is entering a second period of force.
From a longer-term perspective, the bottom of A-shares is basically proven, and there is no need to be pessimistic in strategy; with the establishment of the inflection point of medium and long-term loans, the direction of long-term layout is emerging.
(1) Industry rotation, who will relay the steady growth? –Consumption. The current stable growth market is gradually transitioning to the middle and late stages. If the endogenous credit expansion can be realized in the second half of the year, the broader market will also usher in a real reversal. Based on the rhythm of the stable growth cycle and the ternary framework of “money-credit-entity” From the point of view, consumer stocks are expected to continue to grow steadily and become the main market line in the medium term, and the strategic allocation opportunities for large consumption have gradually approached. (2) Kechuang 50, the king of price-performance ratio in the long-term allocation sector. Comprehensive performance trends, institutional positions and valuation levels, the high growth + undervalued + low allocation of the Science and Technology Innovation Board has entered the strategic layout window.
Strategies and industry recommendations: (1) Credit entities are weak, the policy is ready for the second period of force, and the direction of stable growth recommends local infrastructure, state-owned enterprise developers, and high-quality banks; (2) Performance certainty & short-term supply and demand mismatch of photovoltaics , aerospace equipment, oil transportation, agrochemical; (3) tax-free, hotel, express delivery of the concept of dilemma reversal.
Sinolink Securities: Fundamental reversal will drive the market to rise
Intensive policies were introduced to stabilize market sentiment, medium-term fundamentals supported the bottom range, and external factors may also show positive changes. First, the most serious impact of the Russian-Ukrainian conflict on the market may have passed; secondly, China-EU and China-US relations or margins have shown positive changes after the meeting of the heads of state; in addition, the Fed is expected to raise interest rates and shrink its balance sheet more fully; finally, the current foreign capital outflow does not have similar The macro environment in 2015, such as the continued sharp depreciation of the RMB and the continued economic downturn. The interest rate gap between China and the United States will stabilize in the future, and the RMB exchange rate will also stabilize.
Concerns about the market: 1) There is no need to be too bearish on US stocks, the fundamentals of US stocks have not deteriorated significantly, and the impact of the Fed’s policy on US bond interest rates has come to an end; 2) The RMB exchange rate has stabilized in the follow-up Sino-US interest rate spread, and there is no single 3) The domestic epidemic situation is expected to show an accurate and efficient dynamic clearing effect under the follow-up normalized nucleic acid and other policies.
In the follow-up, A-shares will turn from defensive to offensive, and A-shares may usher in a growth period. The prosperity track and consumption dance together, which does not rule out the possibility of the market hitting new highs. 1) In the track investment, the research and judgment of the inflection point of the growth curve is the most critical. For example, in 2017, the shipments of Apple mobile phones ushered in a downward inflection point, and the relevant sectors have obviously continued to adjust. Taking new energy vehicles as an example, since 2019, the continuous excess returns of the sector have been accompanied by the continuous increase in the penetration rate of new energy vehicles. The inflection point of the growth curve of the new energy sector is still difficult to see in the short term, and the logic in the medium and long term is difficult to falsify; 2) For the consumer sector, in the final stage of the Shanghai epidemic, the three arrows of efficient epidemic clearance are expected to greatly ease the epidemic, and superimpose incremental promotion fees and other increments Policy, pay close attention to marginal changes in the consumption field.
Western Securities: After the epidemic, the recovery rebounded into the second half
Following the positive signals released by the State Council and the Central Finance and Economics Commission in late April, consumption stimulus policies in the real estate, automobile and other industries have been implemented one after another. During the promulgation period, the expectation of the stabilizing growth policy is gradually being fulfilled. On the other hand, the high-frequency economic and financial data has remained weak since May, and the overall economic recovery after the normalization of nucleic acids in multiple cities is close to slow. This also makes the market more doubtful about the recovery of the post-epidemic economy, which has become a pressure to suppress the market’s further upward movement. important resistance.
After the epidemic, the recovery rebounded and entered the second half, winning with slowness, quickness and stability. Since May, market sentiment has been greatly boosted by policy support, and sectors with relatively high valuations have achieved significant excess returns. For June, the market’s focus will shift from fast-variable policy expectations to a gradual return to slow-variable ones. Economic and financial data verification, which also means that the rhythm of market transactions will gradually slow down, and the trading style will be more balanced.
The normalization of nucleic acids brings about changes in the rhythm and structure of post-pandemic recovery, and the 15-minute nucleic acid circle brings investment opportunities in short-distance consumption scenarios. Drawing on the experience of Shenzhen’s epidemic recovery, structural changes in consumption have led to different recovery rhythms in the consumption sector. From the perspective of the two chains of travel chain and consumption chain, under the background of normalized nucleic acid detection, residents are more inclined to self-driving and bicycles, and private travel is faster than public transportation. , freezer demand, smart projection and other home entertainment ushered in restoration. Optimistic about automobiles, new energy vehicles, bicycles and accessories in the travel chain; outdoor products, textiles and apparel, chain restaurants, white goods, and smart projections in the consumption chain.
The short-term market is still bumpy, but it’s not yet time for a full retreat. With the recent periodic revision of the Fed’s interest rate hike expectations, the domestic policy of stabilizing growth has gradually been implemented, and Shanghai has resumed orderly development after the epidemic. As the post-epidemic recovery rebounds into the second half, the choice of style will be more important than the overall judgment of the market. From a structural point of view, we should focus on four main lines: 1) With the gradual increase in inflation expectations, CPI-related agriculture and other consumer staples sectors are still the main line of the year; 2) Cars, food and beverages, and home appliances that are expected to benefit from consumption-promoting policies 3) Offline economy-related industries such as express logistics, catering tourism, airport aviation, and media related to post-epidemic recovery; 4) Textile clothing, home appliances, light industry, etc. that benefit from the depreciation of the RMB exchange rate.
Huaxi Securities: The U-shaped market has entered the 2.0 stage, and the volatility has increased, from general rise to differentiation
Since the end of April, A-shares have experienced a round of oversold rebounds under the anticipation of resumption of work and production and the policy of stabilizing growth. Industry indices have generally risen, and oversold sectors have led the gains. However, the rebound cannot be achieved overnight, and the conditions for the current rebound to reversal are not yet available. The market trend reversal needs to verify the improvement of fundamental data and the return of corporate profits to the upside. A-share ROE has continued to decline since mid-2021, and the growth rate of net profit attributable to the parent is still in a downward period. At this stage, high-prosperity industries and industries that benefit from stable growth policies are expected to dominate.
The U-shaped market has entered the 2.0 stage, from general rise to differentiation. We predicted that the fluctuation range of the Shanghai Composite Index in the U-shaped market may be 3000-3200. This round is defined as a technical oversold rebound from 2900 points to 3150 points, and the driving factor for the follow-up market is corporate profits. As of May 27, the Shanghai Composite Index is at 3130 points. We believe that this round of U-shaped market has entered the 2.0 stage, that is, the A-share market has been driven from “technical oversold rebound” to “corporate profit”, and is driven by “general rising market”. ” to the “Structural Differentiation” quote. At the current point in time, we do not recommend continuing to chase the high, but to wait for the relative bottom range of the U-shaped market 2.0 stage to be re-arranged. While maintaining a moderate position, selecting high-quality stocks has become the only way to obtain excess returns in the future. From a medium and long-term perspective, A-shares are in a solid bottom range, and the trend of the center’s gradual upward movement has not changed.
In terms of industry allocation, focus on three main investment lines:
1) Low valuation and high prosperity sectors: mining, petroleum and petrochemical, non-ferrous metals, electricity, etc.;
2) “Infrastructure” sectors related to “steady growth”, such as building materials;
3) New energy sector with high prosperity: power grid, photovoltaic, wind energy, etc.
Zheshang Securities: Differentiation and Rebirth – The Market Bottom We Experienced in Those Years
In reviewing the market bottom that we have experienced in those years, differentiation and new life are the key words. The current market has entered the bottom-building stage again, which is both an opportunity and a challenge. It is recommended to look at the bottom area and look for the long-term growth, and use domestic substitution as a clue to find the next batch of star stocks , pay attention to the new shares listed in the past 2-3 years.
1. How to grasp the bottom area
Combining stock and bond yields and remaining liquidity, we believe that the market has entered a bottoming period since the end of April.
The key words of the bottom-building period are differentiation and regeneration. On the one hand, differentiation means that the market follow-up opportunities will be structural, similar to 2012-2013 or 2016-2017; , and the new stocks listed in the past 2-3 years have begun to brew the next batch of star stocks, and individual stocks have quietly started to rise in an orderly manner.
2. In those years, the market bottom in history
Since 2000, there have been four typical market bottoms in the market. One is that the Shanghai Stock Exchange Index was 998 in June 2005; the second was that the Shanghai Stock Exchange Index was 1664 in October 2008; The Shanghai Composite Index started a narrow range between 1849 and 2444 until the bull market started in August 2014; fourth, the Shanghai Composite Index was 2449 in October 2018.
After the market bottoms out, it usually goes through a bottom-building period. Taking these four market bottoms as samples, review and summarize the commonalities of the market bottom-building stage, and then guide the future.
3. Common 1: The dimension of stock-to-bond income ratio
The stock-bond yield ratio has a significant guiding significance for the assessment of the bottom of the market.
Looking back on the experience since 2005, the return on stocks and bonds is mostly in the range of 2.0 to 2.5 compared with the previous peaks. On May 24, the stock-to-bond income ratio rose to 2.21, which was close to the bottom of the market in Q4 in 2008, Q4 in 2012, Q4 in 2018, and March 2020.
4. Common 2: Remaining liquidity turned positive
From the macro perspective, the market bottom usually occurs ahead of the economic bottom, and the economic bottom usually lags behind the market bottom by 1-4 quarters.
In fact, the market bottom often occurs when the surplus liquidity (that is, “M2 growth rate – nominal GDP year-on-year growth rate”) turns from negative to positive. As of 2022Q1, “M2 growth rate – nominal GDP growth rate” has once again turned from negative to positive.
5. Common three: the law of structure operation
Taking history as a mirror, in the stage of market bottoming, there are regularities in the structural operation: first, market sentiment tends to be flat, with some features such as a gradual decline in trading volume, or the ebb of subject stocks, or strong white horse stocks compensating for declines, etc.; second, market bottoms tend to lead the economy At the bottom, at this time, it is often accompanied by the steady growth policy, and then the low valuation fluctuates and stabilizes; three, and more importantly, the new growth stocks representing a new round of industrial directions quietly start to rise in an orderly manner.
These features are often overlooked, but have important practical significance for us to judge the bottom and the bottom of the layout.
The more critical point here is that during the new round of star stocks, although there is no index market, individual stocks have quietly started to rise in an orderly manner.
6. Outlook: the bottom area looks long and grows
We suggest that the bottom area should pay attention to differentiation and optimize the structure, starting from the certainty of policy and industry, and look at the long-term.
To lay out the next round of structural market, it is recommended to pay attention to “Science and Ports Stability” on the board.