Entering mid-May, how will the A-share market be interpreted?
The Paper has collected the opinions of 10 securities companies. Most of the securities companies believe that although the formation of the market bottom does not happen overnight, and the improvement process of the main contradictions inside and outside the market may also be repeated to some extent, the mid-line value of A shares is already available, and it can be strategically Gradually turn to optimism, and the mid-term recovery market is approaching.
CITIC Securities said that with the subsequent improvement of the epidemic situation, external pressure has gradually eased, resumption of work and production is gradual, and the implementation of support policies has been accelerated. The extreme pessimism in the market has been fully released.
CICC pointed out that although 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 the market already has a mid-line value.
China Securities believes that although the market's "U-shaped bottom" still requires patience, it is no longer strategically pessimistic and should gradually turn to optimism.
In terms of configuration, stable growth is still the main line that many institutions are optimistic about.
CICC stated that structurally, the low-valued “stable growth” field still has a certain allocation value. Investors can comprehensively pay attention to changes in macro factors such as overseas growth, inflation, and policies to determine whether the relevant growth sector has entered an inflection point of repair.
Haitong Securities advises investors to pay attention to the low-carbon economy and digital economy.
As the policy of stabilizing growth continues to advance, the new infrastructure is expected to demonstrate greater flexibility.
CITIC Securities: Mid-term market recovery is approaching
Looking ahead, as the high point of the domestic epidemic has passed, the external pressure has gradually eased, the resumption of work and production is gradual, and the implementation of support policies has been accelerated. The extreme pessimism in the market has been fully released. It is expected that the market will start in May.
Specifically, first of all, this round of domestic local epidemics has a clear trend of improvement, and the resumption of work and production is gradual.
After the Politburo meeting fully set the tone, the policy entered a period of accelerated implementation. It is expected that after the domestic macro data in April bottomed out during the year, there will be a marginal improvement in May.
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 the A-share market is approaching.
In terms of allocation, investors are advised to actively deploy the four main lines of modern infrastructure, real estate, resumption of work and production, and consumption restoration.
CICC: The value of the middle line is already available
At present, the characteristics of Chinese and foreign policy reversal are becoming more and more obvious, especially under the pressure of global inflation caused by the conflict between Russia and Ukraine.
Looking forward to the market outlook, the growth and policy cycles of China and foreign countries are dislocated, and whether the follow-up will gradually converge to the simultaneous decline of China and foreign countries, or whether China will continue to lead and take the lead in recovering, will be an important macro variable affecting the performance of global and Chinese asset prices in the next six months to one year.
At present, the latter may be a relatively high probability situation, but it is highly dependent on the implementation of China's stable growth policy and the progress of epidemic prevention and control.
At the market level, 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 already has mid-line value. In the follow-up, it is necessary to wait patiently for positive catalytic factors.
In terms of allocation, structurally, the low-valued "steady growth" field still has a certain allocation value. Investors are advised to pay attention to changes in macro factors such as overseas growth, inflation, and policies, as well as domestic measures to "stabilize expectations" and progress in epidemic prevention and control. Determine whether the relevant growth sector has entered the inflection point of repair.
CITIC Construction Investment Securities: "U-shaped bottom" still requires patience
Looking forward to the market outlook, on the one hand, we can no longer be pessimistic in strategy, and gradually turn to optimism.
On the other hand, the improvement process of the main contradictions inside and outside the market is likely to have certain repetitions, and it still needs to be patiently grounded.
As far as the current situation is concerned, the overall situation of the national epidemic has improved, but it is still complex and severe, and the implementation of policies to stabilize growth and economic recovery will also need to wait.
Inflationary pressure overseas remains unabated, the US stock market shocks US bond interest rates, and the devaluation of the renminbi brings pressure and challenges.
Among them, the global recovery economic cycle is dislocated, the domestic fundamentals are superimposed on the recent epidemic disturbance, and short-term exports may also weaken. In the case of an inverted Sino-US interest rate differential, the RMB exchange rate is under pressure to adjust, and the "U-shaped bottom" still requires patience.
Therefore, in terms of strategy, it is recommended that investors remain patient, take a slow-moving plan, and take the basic principle of bargaining.
In terms of configuration, it is recommended that investors pay attention to three main lines: first, valuation flexibility; second, fundamental recovery flexibility; third, varieties with certainty of fundamental recovery, such as express delivery, food, building materials, hotels, and auto zero.
Guotai Junan Securities: The market still needs time to grind the bottom
The formation of a market bottom does not happen overnight.
Although the PE valuation and PB valuation of the Shanghai Composite Index have been equal to 2440 in January 2019 and 2660 in March 2020, the stock market has reflected pessimistic expectations.
However, the market has not been blunted by the negative information due to the low valuation, and the high volatility indicates that the current market still needs more time to grind the bottom.
Specifically, the premise of simple comparison of valuations in the time dimension requires the stability of the macro-expectation model.
The risk expectations currently faced by the market still require very high compensation.
For example, the complexity of the situation in Russia and Ukraine, the pressure of overseas monetary policy tightening, and the unpredictability of the virus.
At the same time, changes in new cyclical factors are also emerging, such as the slowdown in global trade activities, the weakening of domestic residents and enterprises' willingness to spend on capital, and constraints on the expansion of real estate and local government credit balances.
Coupled with the lack of incremental funds, the game of fundamentals or risk expectations is very difficult.
In terms of strategy, investors are advised to wait for a better time, especially when the credit path is clear.
Among them, three main investment lines for stocks with low risk characteristics can be paid attention to: First, coal, petrochemical, and banks with stable cash flow.
The second is buildings, power grids, wind and photovoltaics with certainty of public investment.
The third is the deep optimization of the supply side of live pigs, liquor, hotels, etc.
Haitong Securities: Growth is expected to dominate in stages
During the period from 2019 to 2021, the growth style represented by the ChiNext Index has dominated for three years. Since the overall market correction at the end of 2021, the ChiNext Index has fallen even more, and the CSI 300, China Securities Value and other value-biased indexes have Earnings continue to outperform the broader market, and the A-share style has clearly switched from growth to value.
Similar to 2012, 2022 is a staged rebalancing in the big style cycle, with a slightly dominant annual value, and growth is 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 gains in 2022 have become more obvious. Based on the analysis of the four dimensions of excess return, valuation, policy and performance, growth in 2022 will also be significant. It is expected to dominate in stages.
Specifically, from the perspective of excess returns, value sectors such as coal, real estate chains, and banks have significantly oversold, while growth-oriented industries such as TMT, Dianxin, and military industries have oversold significantly.
From the perspective of policy, looking ahead to the market outlook, with the continuous advancement of the policy of stabilizing growth, new infrastructure will show greater flexibility than old infrastructure, such as low-carbon economy and digital economy.
Huatai Securities: The most pessimistic stage of market expectations is over
In the context of the easing of the epidemic, the continued consolidation of policy bases, and the timing of the Fed's rate hike and schedule reduction, the most pessimistic stage of A-share market expectations is over.
At the same time, the three major factors supporting the rebound of A-shares have been further improved and implemented in the last week. It is recommended that investors continue to explore and deploy the market in the second half of the year.
Among them, in terms of allocation, it is recommended to focus on three logics: changes in current financial reports, high certainty of long-term demand, and long-term capital increase.
Specifically, first of all, from the current financial report, the fixed asset turnover rate of midstream manufacturing is still rising, ROE is mainly suppressed by the net interest rate, but the single-quarter gross profit rate has bottomed out and the pressure of subsequent changes in costs is expected to be further eased. It is recommended to pay attention to special Machinery, general equipment, electrical equipment, power equipment, defense industry, motorcycles, agrochemicals, other chemicals, power generation and power grids, petrochemicals, etc.
Secondly, the capital expenditure direction of upstream companies with good cash flow and basically completed debt reduction targets has certainty of long-term demand, and the opportunity is likely to be in equipment upgrades, energy transformation, and circular economy.
Finally, long-term funds such as insurance funds and national teams will increase their positions in midstream manufacturing in the first quarter of 2022.
In addition, before the bottom of the A-share performance, it is recommended to continue to pay attention to the infrastructure and real estate where policies are exerted; under the scissors difference between PPI and CPI, you can continue to pay attention to agricultural stocks, food and beverages.
Everbright Securities: Focus on the Two Main Lines of Consumption and Steady Growth
Looking ahead, although the Fed is promoting balance sheet reduction, liquidity may not have a significant impact on the domestic market.
On the one hand, in the historical period of the Fed’s balance sheet reduction, domestic market fluctuations are not highly correlated with overseas liquidity.
On the other hand, the peak of expectations for Fed monetary policy tightening may gradually pass.
From the perspective of configuration, with the change of policies, the platform economy may usher in a turnaround, and related industries are worthy of attention.
The change in policy may be a turning point for the Hang Seng Technology Index. It is recommended to focus on investment opportunities in the Hang Seng Technology Index of Hong Kong stocks.
Looking forward to the market outlook, under the background that the overall performance of A shares is facing certain pressure, it is recommended to focus on the direction of relatively high prosperity, including the two main lines of consumption and steady growth.
Among them, in terms of consumption, it is recommended to pay attention to industries such as liquor, medicine, home appliances, mass consumer goods, aviation, airports, and tourism.
In the direction of steady growth, it is recommended to focus on traditional infrastructure such as building materials, as well as new infrastructure such as wind power and photovoltaics.
Caitong Securities: The point of buying large consumption has entered the comfort zone
With the Federal Reserve raising interest rates, wages spiraling upwards, and economic growth declining, the US stock market has become more volatile, volatile, and divergent.
However, in China, despite the economic and epidemic disturbances and the decline in profits in the second quarter, the stock price has basically responded. With the continuous increase and introduction of stable growth policies, from the relaxation of real estate supply and demand, the issuance of consumer coupons, to supply chain protection and county urbanization , the economy is expected to show signs of gradual improvement.
Looking ahead 1 to 2 quarters, the market is getting better and better.
At present, the "big consumption" buying point has entered the comfort zone of cost performance, odds, and winning rate.
It is recommended to focus on three levels of large consumption: First, the post-real estate cycle, including home furnishing, home appliances, and consumer building materials.
The second is service consumption, including social services, airports, medical services, and media games.
The third is traditional consumer goods, such as mass consumer goods, liquor, pigs, etc.
In addition, considering that the policy of stabilizing growth will be strengthened, and the "big finance" market is still expected, it is recommended to use high-quality targets to adjust the fundamentals of the layout.
In terms of real estate, attention can be paid to high-quality real estate companies that benefit from supply-side reforms and can "survive".
In terms of banks, you can pay attention to the city commercial banks and rural commercial banks with good performance growth in the Chengdu-Chongqing Economic Circle and the Yangtze River Delta Economic Circle with excellent fundamentals, as well as some joint-stock banks and large banks with good quality.
Ping An Securities: Short-term consolidation
Two trading days after the May Day, A-shares ushered in adjustment, the impact of overseas games increased disturbance, and asset price fluctuations increased significantly.
In the short term, the market may be dominated by consolidation. Although overseas games have intensified and the possibility of short-term disturbances has increased, domestic policies have also increased and the epidemic has improved.
Looking ahead, structurally, it is recommended to focus on more deterministic investment opportunities, such as the areas of consumption and infrastructure that are focused on by policies.
In addition, judging from the previous experience of shrinking the balance sheet, A shares have the possibility of short-term impact, and the stable sector and the oversold sector have relatively excess returns.
Therefore, the oversold rebound of bargain-hunting layout opportunities is still worthy of attention.
Specifically, since April 26, some industries in the oversold rebound sector dominated by high-end manufacturing have rebounded by more than 10%, with the defense industry taking the lead.
And household appliances, textiles and apparel, which benefited from consumption and exchange rate depreciation, also had a good performance in the short term.
Huaxi Securities: The price-performance ratio of A-share allocation is gradually emerging
Looking ahead, the risk of stagflation in the global economy is increasing.
Although the Fed has played down expectations for a single 75 basis point rate hike, it will remain hawkish for some time to come.
Before inflation shows a downward trend, the expectation of continuous interest rate hikes by the Federal Reserve will still restrict the risk appetite of global funds.
For A shares, it is still optimistic on the whole.
With the current market valuation level falling to a historically low level, the price-performance ratio of the allocation has gradually emerged.
At the same time, the implementation of the stable growth policy will continue to consolidate the "policy bottom" of A shares.
The market outlook will continue to pay attention to the trend of the domestic epidemic, the implementation of incremental policy tools, and wait for the signal of improvement in economic fundamentals.
In terms of allocation, it is recommended that investors focus on low-value blue-chip sectors.
In the industry, investors are advised to pay attention to banks, electricity, petroleum and petrochemicals, etc.