Securities Times reporter Zhang Juanjuan

　　A few days ago, five major international investment banks including Credit Suisse, Wall Street investment bank Bernstein, HSBC, Goldman Sachs and UBS are collectively bullish on China.

Among them, Goldman Sachs believes that A-shares are now more investment-oriented.

Analysts at Bernstein believe that the market is expecting an increase in new social financing in China, looser monetary policy and more attractive stock valuations relative to the rest of the world.

UBS upgraded China's rating to "overweight", especially optimistic about Chinese Internet companies.

　　A-shares pull back during the year

　　ChiNext Index fell nearly 15%

　　While overseas investment banks are optimistic about the Chinese stock market, domestic institutions are divided on the future trend of A-shares.

Based on the fluctuating and declining market since the beginning of the year, some investors took short positions even a few years ago and were bearish on the market in the first quarter.

　　As of February 18, the three major A-share indexes fell to varying degrees during the year, and they performed at the bottom of the world's major capital markets. Among them, the ChiNext Index fell by nearly 15% during the year.

　　From the perspective of individual stocks, more than 530 individual stocks fell by more than 20% during the year. More than 60 stocks such as Oriental Risen, Snowman, and Guoxin Health fell by more than 30%. *ST Changdong's share price was cut in half; stocks that rose by more than 20% during the year Less than 200.

New shares also performed poorly. More than 60% of new shares fell after listing, and the market's profit-making effect was poor.

　　Foreign investors have generally been cautious about Chinese stocks over the past few months, though their attitudes have begun to slowly shift and they expect policies to support economic growth.

Where does the confidence for foreign investors to be bullish on China's capital market come from?

Securities Times Data Treasure has preliminarily confirmed the judgment of foreign capital from four dimensions: valuation, asset allocation, economy, and monetary policy.

　Shanghai Stock Exchange Index Valuation

　　about half of the Dow

　　Although some individual stocks have high valuations or even bubbles, the valuations of the A-share market indices are relatively low, which has been a phenomenon for many years.

　　According to statistics from Databao, as of the latest closing day, the price-earnings ratio of the Nasdaq is close to 33 times, the price-earnings ratio of the Dow Jones index is more than 22 times, the price-earnings ratio of the Shanghai Composite Index is about 13 times, and the price-earnings ratio of the Shenzhen Component Index is about 26 times.

The valuation of the A-share index is generally much lower than that of US stocks.

　　MSCI expects the MSCI China index to rise 16% this year, as the index is valued below the bank's target price-to-earnings ratio of 14.5 times.

　　Foreign investment in Chinese assets

　　low configuration

　　Compared with the United States, whether it is bonds or stocks, the proportion of foreign investment in Chinese assets is lower.

Data treasure statistics show that overseas investors hold about 30% of U.S. Treasury bonds, while foreign investors hold less than 5% of Chinese bonds.

　　From the perspective of stocks, the market value of foreign investors buying Chinese stocks through Beishang capital, QFII, RQFII and other channels is close to 3 trillion yuan, of which Beishang capital holds a stock market value of 2.55 trillion yuan. Although the stock market value is more than three times that of 2018, but Only 3% of the total market value of A shares.

Including QFII, foreign capital still holds less than 5% of the A-share market value.

Foreign investors hold about 15% of the total market value of U.S. stocks, and foreign holdings in Japan, Brazil and South Korea account for a higher proportion.

　　With the continuous opening of China's capital market, foreign investors will continue to increase their investment in Chinese assets.

Since the beginning of the year, the total net inflow of northbound funds has exceeded 20 billion yuan. Among the stocks that have recently disclosed their 2021 annual reports, many stocks have received new QFII positions.

　China's economy continues to improve

　　The new crown pneumonia virus is still widespread overseas. Zhang Yuxian, director of the Economic Forecast Department of the State Information Center, believes that the continued positive trend of China's economy will not change.

In 2020, China is one of the few countries with positive economic growth. In 2021, China's GDP will increase by 8.1% year-on-year, the US GDP will increase by 5.7% year-on-year, and Japan's only 0.8%.

　　2022 is the year when the "14th Five-Year Plan" is fully implemented. Although facing the triple pressure of demand contraction, supply shock and weakening expectations, Xing Ziqiang, chief economist of Morgan Stanley believes that China's economy will show a recovery trend in 2022. , the annual GDP growth rate is expected to reach 5.5%.

At the same time, the United States is still deeply affected by high inflation, high unemployment and the high outbreak of the new crown epidemic. The IMF has significantly lowered its 2022 US economic growth forecast by 1.2 percentage points to 4%, down 1.7 percentage points from 2021.

　　US loose monetary policy

　　Expectations tighten

　　After nearly two years of monetary easing, the United States has begun to tighten monetary policy, while China still maintains a prudent, flexible and moderate monetary policy, while increasing its efforts to adjust across cycles.

During this year, the central bank launched a series of medium-term lending facility (MLF) operations. On January 17 and February 15, it launched a one-year MLF operation of 700 billion yuan and 300 billion yuan respectively.

　　The central bank's incremental parity sequel to MLF is intended to increase long-term capital investment, guide financial institutions to increase support for the real economy such as agriculture, rural areas, small and micro enterprises, and release the central bank's policy orientation of active and stable growth.

　　Foreign bond yields rose on expectations of policy contraction.

The latest data shows that the yield on the 10-year U.S. Treasury bond is nearly 2%, the highest since 2020; the United Kingdom, India, and France have all reached their highest levels since 2020.

China's current 10-year treasury bond yield is 2.8%, a slight decrease from the beginning of 2020, a decrease of 0.36 percentage points from the beginning of 2019, and a small change.

In addition, from the perspective of China's broad money supply, it will reach 243.1 trillion yuan in January 2022, a year-on-year increase of 9.8% and a month-on-month increase of 2.02%.

　　At the same time, the renminbi is expected to appreciate.

Under multiple factors, for foreign capital, Chinese assets not only have the advantage of hedging, but also can obtain higher investment returns.

　　Blue-chip blue chip stocks with low valuations

　　Outperforming small caps

　　Foreign investment banks believe that low-valued large-cap blue chips are still attractive.

Data treasure is classified according to stock market value, and calculates the average rise and fall since the beginning of the year. It is found that stocks with a market value of more than 500 billion have risen by nearly 2% on average, stocks with a market value of 300 billion to 500 billion fell on average by about 3%, and stocks with a market value of 10 billion to 50 billion fell on average. More than 7.5%, and below 10 billion fell by about 6% on average.

Large-cap stocks fluctuated within a narrow range, and small-cap stocks pulled back sharply, which is basically consistent with the views of investment banks.

　　Which stocks get the most attention from institutions?

According to statistics from Databao, since the beginning of this year, it has received capital from Beijing to increase its positions. From 2019 to 2021, the return on net assets in the three quarters of 2019 to 2021 will exceed 10%, and the latest price-earnings ratio is less than 30 times. There are only 15 stocks with a market value of more than 10 billion.

These 15 stocks have all received institutional research since 2021. Among them, Haier Bio has received research from 590 institutions, and Jinjia and Oriental Bio have received research from more than 30 institutions.

　　According to data treasure statistics, Orient Bio, China Eastern Logistics, and Tianjian Group received more than 1 percentage point increase in capital from northbound during the year, and Tianshan Co., Ltd. and Satellite Chemical all received increased positions.

Hubei Yihua, Satellite Chemical, and Orient Bio have outstanding performance in 2021. Among them, Hubei Yihua’s net profit will increase by more than 10 times. Since the beginning of the year, the company has received 0.28 percentage points of capital from the north, and the latest price-earnings ratio is less than 15 times.