Source: Broker China
Author: Yang Yucheng
CITIC Securities: The peak of internal and external suppression has passed, the mid-term recovery of A shares is approaching, and the four main lines are laid out
CITIC Securities believes that the high point of the domestic epidemic has passed, the external pressure has gradually eased, the resumption of work and production is gradual, the implementation of support policies has been accelerated, and the extreme pessimism in the market has been fully released. First of all, the improvement trend of the domestic epidemic situation in this round is clear. The epidemic situation in Shanghai continues to improve steadily, and the resumption of work and production is gradual; after the comprehensive adjustment of the Politburo meeting, the policy has entered a period of accelerated implementation. It is expected that after the domestic macro data in April bottomed out this year, the There will be marginal improvements. Secondly, the Fed’s extreme tightening expectations have basically come to fruition, and the probability of subsequent tightening beyond expectations is low. The main reason for the devaluation of the RMB is the weakening of economic expectations, and the window for the greatest depreciation pressure has passed. Finally, after the extreme pessimism in the market has been fully released, profit expectations, index valuations, and institutional positions have all been fully revised down. The reaction to negative factors has been blunted, and they are more sensitive to positive signals. The mid-term recovery of A shares is approaching.
In terms of configuration, it is recommended to continue to actively deploy the four main lines of modern infrastructure, real estate, resumption of work and production, and consumption restoration. From the perspective of the whole year, it is recommended to focus on modern infrastructure and real estate layout. The infrastructure sector should focus on low-value building leaders, power grids, data centers and cloud infrastructure, and the real estate sector should focus on high-quality developers, property management and building materials. From the quarterly perspective, it is recommended to actively add related industries that resume work and production, focusing on smart cars and parts, semiconductors, photovoltaic wind power equipment, etc. On a monthly basis, it is recommended to focus on consumption repair related to aviation, hotels, duty-free, food and beverage, department stores and supermarkets. It is expected that these industries will also usher in a phased recovery under a package of policies such as the subsidence of the large-scale epidemic, bailouts of market players and consumption stimulation. .
Haitong Securities: The style of the year is more like 2012, and the growth is expected to dominate in stages
Haitong Securities said that A-shares have a major style switch every 3-5 years, the relative trend of profitability is the decisive variable, and the correlation between interest rates and styles is weak. The background of the growth style started in 2019 is the industrial upgrading driven by information technology and energy reform, similar to the wave of mobile Internet driven by the popularity of smartphones in 10-15 years.
This year is similar to 12 years. It is a staged rebalancing in the big style cycle. The value of the whole year is slightly dominant. Next, the growth is also expected to be dominant in stages. At present, benefiting from the steady growth policies of traditional sectors such as infrastructure and real estate, the value-style returns have been more obvious this year. However, we analyze the four dimensions of excess return, valuation, policy and performance. We believe that it is similar to that in 2012. , this year’s growth is also expected to dominate in stages.
Huatai Securities: Three major factors have improved, and we will dig and deploy for the repair market in the second half of the year
The performance of A-shares on the two trading days last week was diametrically opposed. Huatai Securities believes that the weakness of A-shares on Friday is mainly due to the interference of market sentiment caused by violent fluctuations in the outer market. Against the background of the easing of the epidemic, the continued consolidation of policy bases, and the implementation of the Fed’s interest rate hike and schedule reduction, the most pessimistic stage of A-share market expectations is passing. The three major factors supporting the rebound of A-shares have further improved and landed in the last week. (1) Shanghai epidemic has been decompressed; 2) The policy has a 6-point marginal change compared with March; 3) The Fed rate hike will be implemented on May 5 . ) It is recommended to continue to dig and deploy the market in the second half of the year, and maintain the view: the mid-year A-share performance is expected to bottom out, the third-quarter and annual reports may rebound quarter by quarter, and Q4 can play against the marginal changes in the Fed’s policy.
In terms of configuration, the focus is on the midstream manufacturing that the three logics of current financial report changes + high certainty of long-term demand + long-term capital additions all point to. 1) The turnover rate of fixed assets is still rising, ROE is mainly suppressed by the net profit margin, but the single-quarter gross profit margin has bottomed out, and the subsequent variable cost pressure is expected to further ease the midstream manufacturing: special machinery, general equipment, electrical equipment, power equipment, National defense and military industries, motorcycles, agrochemicals, other chemicals, power generation and power grids, petrochemicals, etc.; 2) The capital expenditure direction of upstream companies with good cash flow and basically fulfilled debt reduction targets, with certainty of long-term demand, and a high probability of Equipment upgrade, energy transformation, circular economy; 3) Long-term funds such as insurance funds, national teams, etc., have increased their positions in midstream manufacturing in Q1. In addition, before the bottom of the A-share performance, continue to pay attention to the infrastructure and real estate where policies are exerted; under the scissors difference between PPI and CPI, continue to pay attention to agricultural stocks, food and beverages.
Guotai Junan Securities: Don’t be obsessed with offense, the bottom of the market is not formed overnight
Guotai Junan Securities believes that the formation of the market bottom is not overnight. The PE valuation and PB valuation of the Shanghai Composite Index have been equal to 2440 in January 2019 and 2660 in March 2020. Some investors believe that the stock market has reacted to pessimistic expectations and thus can make great progress. However, recent stock market investors have not been blunted by negative news because of low valuations. On the contrary, high volatility indicates that the current market still needs more time to grind the bottom. What investors often overlook is that the premise of simple comparison of valuations in the time dimension requires the stability of the macro-expectation model. The current market risk expectations still require very high compensation, the complexity of the situation in Russia and Ukraine, the pressure of overseas monetary policy tightening, and the unpredictability of virus mutation. At the same time, we also see changes in new cyclical factors. Global trade activities have begun to slow down, domestic residents and enterprises are less willing to spend on capital, and real estate and local government credit balance expansion is facing constraints. Coupled with the lack of incremental funds, it is very difficult to game fundamentals or risk expectations. Therefore, we still recommend investors to wait for a better time, especially when the credit path is clear.
Investment opportunities are in stocks with low risk characteristics: low valuation, performance, performance certainty. However, the point and intensity of stable growth are different from those in the past, and stock selection should pay more attention to the leading share advantage rather than tail elasticity. Recommendations: 1) Stable cash flow: coal, petrochemicals, banks; 2) Certainty of public investment: construction, power grid, wind and photovoltaics; 3) Dilemma reversal, core focus on deep supply-side optimization: live pigs, liquor and hotels, Q2 focus Consumption of building materials, steel.
CICC: A-share sentiment is “grinding the bottom”, the main line of stable growth still has stage allocation value
CICC stated that there are still many uncertainties in the current internal and external environment, market valuations have been significantly adjusted, sentiment has entered a state of “grinding the bottom”, and it has mid-line value, and the follow-up needs to wait patiently for positive catalytic factors. Structurally, it is believed that the low-valued “stable growth” field still has certain allocation value. It is recommended to comprehensively pay attention to changes in macro factors such as overseas growth, inflation, and policies, as well as domestic “stabilization expectations” measures and progress in epidemic prevention and control, to determine whether the relevant growth sectors are. Enter the inflection point of repair.
Industry allocation suggestion: The main line of stable growth still has the value of stage allocation, and pay attention to the growth style according to the progress of the global inflation situation. 1) In the stage of “grinding the bottom” of the market, stable growth sectors with relatively low valuations may still have relative gains in the current macro environment, such as traditional infrastructure and real estate demand-related industry chains (real estate, building materials, construction, home appliances, home furnishing, etc. ), etc.; 2) Mid-stream and downstream consumption with a lot of adjustment in the early stage, low valuation, and still bright medium and long-term prospects, choose stocks from the bottom up, including home appliances, light industry and home furnishing, automobiles and parts, agriculture, forestry, animal husbandry and fishery, medicine, etc. 3) The risks of manufacturing growth sectors including new energy vehicles, new energy and technology hardware semiconductors have been released, but the turning point lies in whether the “stagflation” risk, global liquidity and market sentiment factors can be marginally improved.
CITIC Construction Investment Securities: Be patient and wait for opportunities
CITIC Construction Investment Securities said that on the one hand, we can no longer be pessimistic in terms of strategy, and we must gradually turn to optimism; on the other hand, the process of improving the main contradictions inside and outside the market is likely to have certain repetitions, and it still needs to be patiently grounded. For now: the domestic epidemic situation has improved, but it is still complicated and severe, and the implementation of stable growth policies and economic recovery still needs to wait; overseas inflationary pressures remain unabated, U.S. stocks have a huge shock and U.S. bond interest rates have surged, and the devaluation of the renminbi has brought pressure and challenges. Investors are advised to be patient, and should take it slow and take the low-level layout as the basic principle. Under the impact of the epidemic, the prices of cyclical products have fallen sharply recently, and the recovery of consumption, especially optional consumption, has been delayed. Referring to 2020, the follow-up recovery of industry fundamentals will revolve around the epidemic as the main line. At the molecular end, there is a high probability that the transaction logic of epidemic damage and repair will still be performed in May.
Low-level layout of epidemic recovery and stable growth. If various industries return to normal operating levels after the recovery of the epidemic, we need to prefer: 1) valuation flexibility; 2) fundamental recovery flexibility; 3) products with certainty of fundamental recovery. Taking into account comprehensively, it is recommended to focus on the layout of the epidemic improvement varieties: express delivery, food, building materials, hotels, and auto zero. And the direction of infrastructure/real estate that will grow steadily after the epidemic improves.
Industrial Securities: A-shares are already in the mid- to long-term bottom area, but it still takes time to consume, oscillate, and consolidate
Industrial Securities said that standing in the current mid-to-long-term bottom area, it should remain calm in the face of uncertainties at home and abroad. In line with the principle that price is more important than time, and taking fundamentals as the criterion, we will find and deploy a direction with strong profitability.
1) Recently, the decision-makers have continuously increased the “steady growth” and stabilized market expectations on several important occasions, and constantly consolidated the “policy base”. From the Two Sessions, to the Finance Committee meeting, and to the recent Politburo meeting, the decision-makers’ determination to “stabilize growth” has been repeatedly confirmed. The follow-up monetary and credit policies are still expected to be further relaxed. At the same time, the decision-makers also repeatedly emphasized “maintaining the stable operation of the capital market”, and made clear arrangements for key issues such as supply chain, real estate, and Internet supervision that the market is concerned about. 2) Combined with our exclusive construction of eleven bottom characteristic indicators to Look, most indicators have reached or are close to historical market bottoms. 3) But in terms of time, the current A-share market is still in the stage of consumption, shock and consolidation. The construction of complex bottoms is difficult to do overnight. On the one hand, overseas tail risks have not been fully released. On the other hand, the drag of the domestic epidemic on the national economy and corporate profits has not yet fully manifested.
Combined with the first quarterly report and the outlook for the future, we will focus on the following three directions: 1) core consumer assets (alcohol, duty-free, aviation, scenic spots and hotels) 2) “stable growth” sectors (infrastructure, real estate, banks, etc.) 3) In the “new half army”, the direction of strong immunity and high prosperity (new military materials, photovoltaic modules, wind power machines, semiconductor materials, 5G fiber optic cables, UHV)
BOCI Securities: Inflation trading ebbs, waiting for A-share U-shaped reversal
Bank of China International Securities believes that inflation trading has receded, and the market’s squeeze on valuation has come to an end, waiting for the U-shaped reversal of A shares. The stage of the fastest decline in A shares during the year is likely to pass, and it is currently in the bottom grinding stage. In terms of profitability, considering the strong correlation between the growth rate of all-A revenue and nominal GDP, it is expected that the earnings of A-share companies will still bottom with the pace of GDP in the second quarter. Gross profit recovered quarter by quarter and achieved positive growth. In terms of valuation, the factors that suppressed the market in the early stage have been priced or tended to ease, and there is room for repair in the market.
For balanced allocation in the industry, it is recommended to focus on three investment directions: 1. From low valuation to stable growth. As far as the second quarter is concerned, under the bottom of corporate profits, the stable growth represented by the necessary consumption may have a performance certainty premium; 2. The policies represented by Internet platforms and real estate are expected to stabilize and reverse the direction of the predicament; 3. Risk appetite has recovered, valuation has been repaired, and there is a hard technology track with room for oversold and rebound.
Western Securities: Market rally may be late, but not absent
Western Securities said that for the A-share market, the overall market performance is often weak during the period of exchange rate depreciation, but there will also be structural opportunities. The market rally may be late, but it will not be absent. Historically, although the short-term sharp adjustment in overseas markets will lead to the adjustment of A-share market sentiment, it does not change the rhythm of A-shares themselves. The Russian-Ukrainian conflict and the epidemic have disrupted the market rhythm to a certain extent, but they have not changed the trend of post-epidemic economic recovery and market operation. For the market, the choice of style will be more important than the overall judgment of the market.
From a structural point of view, we 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 lines of the year; Electronics, communications, automobiles, shipping and other industries; 3) Traditional consumer sectors such as food and beverages, home appliances, and medicine, which are less disturbed by the epidemic, are also expected to usher in a turnaround; 4) After the epidemic prevention policy is stabilized, express logistics, catering, tourism, airport aviation, And offline economy-related industries such as media are expected to usher in repairs.
Minsheng Securities: Rather than judging when the market will rebound, it is more important to seize the strongest main line in the future
Minsheng Securities believes that in the past two weeks, due to the short-term “falling too much”, the market’s “bottom has been found” has been heard endlessly. We believe that several important observations are more important than blindly emphasizing the bottom. 1. The 10Y U.S. real interest rate has risen to 0.62%: the current 10Y U.S. bond real interest rate is 0.26%, which has increased by 130bp compared to this year’s lowest point of -1.04%. In 2013, the rate was 166bp, and it will gradually slow down in the future; The epidemic has entered a new stage of normalized epidemic prevention: the top provinces and cities in terms of affordability after entering the new epidemic prevention state also account for a relatively high proportion of the national GDP. After this round of clearing is successful, it is expected to enter a new normal state. Pay attention to the newly added ones. Beijing and Jiangsu are on the rise; 3. The growth rate of social financing has risen to 11.2% and is maintained: “Opinions on Promoting Urbanization with County Towns as Important Carriers” has been launched, and the stabilization of real estate and promotion of consumption are all in progress. Historically, the recovery period required social financing to be higher than the nominal GDP growth rate by more than 2.8%, and the difference was 2.23% at the end of March.
May will find order in chaos. The absolute level of inventory and the growth rate of inventory in major mid- and downstream industries are at historically high levels. However, the inventory of related finished products in upstream industries is at a historically low level, and the capacity utilization rate of major upstream industries is still operating at a high level. The performance of the middle and lower reaches driven by the resumption of work and production, consumption encouragement and infrastructure can be expected in the short term, and inflation pressure is not obvious, but after the downstream inventory is digested, the contradiction between supply and demand will soon be transferred to the upstream where there is not too much safety redundancy. . The upcoming peak domestic energy consumption season and the acceleration of overseas inflation will resonate with it at the same time. The decline in mid-stream and downstream inventories will be an early observation of an upward trend in domestic inflation. The overall recommended order for the next stage is: oil and gas, copper and aluminum, gold, oil transportation, coal, fertilizer, zinc, real estate and banking. The rebound of growth stocks is more staged, and the sectors that can stay away from inflation in terms of supply and demand will be more sustainable.
Editor/Corrine
This article is reprinted from: https://news.futunn.com/post/15317558?src=3&report_type=market&report_id=204946&futusource=news_headline_list
This site is for inclusion only, and the copyright belongs to the original author.