China Fund News Taylor
Hello everyone, according to the usual practice, let's take a look at the sudden events next Sunday night, as well as take a look at the latest research and judgment of brokerage teachers on A-shares!
In the past week, the Shanghai Composite Index fell 1.03%, the Shenzhen Component Index fell 2.38%, and the ChiNext Index fell 4.13%.
Moutai broke big news
Late at night on June 30, a heavy signal came out from Moutai!
According to the WeChat official account of "Kweichow Moutai", Wang Li, deputy secretary of the Party committee and general manager of Moutai Group, led a team to Shanghai, Zhejiang, Jiangsu, Beijing and other cities to carry out market research from June 25 to 30, and organized a market work meeting in Nanjing, Shanghai and Anhui provinces and regions and Beijing, Tianjin, Hebei, Mongolia, Heiji and Liaoning provinces and regions on June 28 and 30 to further analyze the situation, unify ideas and build consensus.
The meeting pointed out that the basic attributes of Moutai have not changed, and the basic demand side has not changed. In the past few decades, the liquor industry has undergone several rounds of adjustments, and each time Moutai has smoothly passed through the cycle with strong determination and strength, and has achieved better development. Compared with the past, although the current situation is more complex, the current Moutai has stronger core competitiveness, better market channel ecology and more resilience in risk prevention, and has the confidence, strength and ability to go through this cycle. All distributors and channel parties should maintain their determination and confidence, further establish a strong confidence that "the fundamentals of China's long-term economic growth have not changed and will not change", continue to strengthen the strategic determination of Moutai's first-class brand, quality and culture, continuously deepen the awareness of the "three communities" of emotion, interests and destiny of Moutai's marketing channels, and strongly promote the "three transformations" of Moutai's market work, fully condense the strong synergy of channel synergy, and strive to achieve high-quality and sustainable development.
Recently, the fluctuation of the wholesale price of Moutai liquor market has aroused widespread concern in the market. In 2024, the wholesale reference price of bulk bottle Feitian Moutai will fall below 2,100 yuan, reaching a record low of 2,080 yuan, and triggering a sharp drop in the share price of Kweichow Moutai.
Subsequently, it was reported that the 12-bottle (large box) Feitian Moutai will be canceled, and the Feitian Moutai unpacking policy will also be canceled. At the same time, some Moutai dealers also received notices of suspension of shipments of 15-year-old Moutai and boutique Moutai.
As of June 30, the bulk bottle of Feitian Moutai in 2024 rose to 2,290 yuan per bottle; The original box will rise to 2,550 yuan per bottle in 2024.
Taylor counted that A-shares are big this year, and companies with a market value of more than 400 billion yuan have all risen except for Kweichow Moutai and Wuliangye, two liquor companies.
According to the analysis of Guojin Securities, the batch price of Feitian Moutai has stabilized and rebounded, which is in line with the prediction of its batch price in the early stage, and with the gradual combing of the price expectations of all participants in the channel chain, it is expected that the batch price of Feitian Moutai may still rise. At present, the valuation of the liquor sector has dropped significantly, and IFC still recommends seizing the opportunity of strong cost-effective allocation.
The latest research and judgment of the top ten brokerages
1. CITIC Securities: The three major signals are to be clear, and the market inflection point will appear
At present, the market has basically completed the adjustment caused by the expected revision, and the trend of survival of the fittest in the market continues. Looking forward to the third quarter, policy signals, price signals and external signals are expected to become clearer, market liquidity is expected to improve significantly after the Third Plenary Session, investors gradually shift from the PEG framework to the free cash flow framework, and funds gather to the leaders of various industries.
First of all, from the perspective of the three inflection point signals, in terms of policy signals, the Third Plenum will focus on comprehensively deepening reforms, which can stabilize market expectations after landing; In terms of price signals, the stabilization of housing prices in core cities needs to be further verified, and the incremental policies of collecting and stimulating demand may be increased; On the external signals, the pressure on a strong dollar remains to be unleashed, and the impact of the US election will be gradually priced in in the third quarter.
Secondly, from the perspective of marginal changes in market liquidity, investors are expected to resume their enthusiasm for trading after the Third Plenary Session, and the liquidity inflection point will also appear, the trend of survival of the fittest in the market will continue, and funds will gradually gather to the leading companies in various industries.
Finally, from the perspective of allocation strategy, the value of the bottom position of low dividend volatility has not been shaken, and some growth industries have already seen performance inflection points.
2. Investment strategy: emotional repair, bottoming rebound
Looking ahead to July, the Third Plenum will be held, and since this is an important meeting to "promote Chinese-style modernization and further deepen reform in an all-round way", the major reform directions in the meeting may have a key impact on the market and increase the likelihood of boosting market sentiment.
In addition, July is the peak period for the disclosure of interim performance forecasts, and from the low base of last year, the proportion of this year's performance forecasts may increase, alleviating previous concerns about fundamentals. Judging from economic data, the current issuance of treasury bonds is accelerating, and the growth rate of broad fiscal expenditure is expected to turn positive from June; External demand still maintains a relatively high growth rate; Corporate earnings continued to grow steadily. In terms of incremental funding, investors in major ETFs continued to significantly increase their holdings, providing financial support for market stability. After the market correction in the early stage, the pessimism was obviously released, and in the future, with the heating up of reform expectations and the gradual stabilization of performance, A-shares are expected to gradually bottom out and rebound in July.
3. China Securities Construction Investment Strategy: Don't be sad or anxious, wait for the opportunity to come
Last week, the market as a whole remained weak, especially the STAR Market index hit a new low in this round of adjustment last Friday, and the market is worried about the risk of another sharp decline like in January. As far as this year's market performance is concerned, short-term fluctuations may not be mainly dominated by fundamental factors, but are more related to the valuation side, that is, the impact of funds and policies. Considering that the current capital and policy environment are stronger than in January, if the market adjusts significantly, it will provide a good opportunity for layout.
Combined with the recent important policy documents of ministries and commissions and the main topics of the series of meetings of the Central Deep Reform Commission, we believe that the Third Plenary Session of the 20th Central Committee is expected to further focus on fiscal and taxation reform, optimization of factor resource allocation, development of new productive forces, opening up and other directions. Looking back at the market performance before and after the convening of the 18th and 19th Plenary Sessions of the 19th Central Committee, the index level was generally volatile, and the winning rate of the growth style increased after the meeting.
Combined with high-frequency prosperity combing, looking forward to the third quarter, the growth sectors of the independent business cycle are still upward, including consumer electronics, storage, power grid power equipment, construction machinery, nuclear power, etc., and the recent market has paid special attention to the electronics industry chain. With the implementation of Apple's AI layout, the consumer electronics innovation cycle and the recovery cycle of the global semiconductor industry are worth looking forward to. At the same time, the Chinese prefix, fiscal and tax reform, IT, etc. are also expected to usher in the theme market catalyzed by the policy expectations of the Third Plenary Session of the Central Committee in the short term.
4. Guotai Junan: Blue chips are the front, technology is the first
The stock market bottomed out and stabilized, and the layout rebounded in July. Approaching the interim reporting period, the impact of performance growth on stock prices will increase significantly (the rise and fall of A-shares in July is highly correlated with performance). It is expected that the relatively dominant sectors in the report are: 1) technology hardware that benefits from industrial trends or cycle recovery: optical modules/consumer electronics/semiconductors/panels/computer equipment, etc.; 2) Resources with significant price increases: such as precious metals/industrial metals/shipping/fluorine chemicals, etc.; 3) Export of midstream manufacturing that continues to boom: such as ships/home appliances/tires/two-wheeled vehicles/hand tools/rail transit equipment, etc.
Considering that the market uncertainty has decreased, but the willingness of micro entities to take risks is low, the investment focus is on blue chips with products, orders, performance, and reasonable valuations. The market fully values macro risks, the stock market has bottomed out, and the investment perspective should be changed to the direction of layout rebound and greater stock price elasticity: 1) Focusing on the acceleration of the comprehensive deepening reform of Chinese-style modernization, the establishment of the third phase of the large fund, the increase in support for scientific and technological innovation mergers and acquisitions, and the stabilization and improvement of capital expenditure in the technology sector, recommended: electronics/military industry/communications/machinery/new materials; 2) AI+ devices are expected to promote a new round of terminal update demand and create new consumption scenarios, while Open AI terminates the provision of API services to Chinese manufacturers, which may mean that AI demand, innovation and domestic substitution are expected to resonate. 3) Pay attention to cash flow and stable operation, and the economic expectation is supported: operators/power/Hong Kong stock high dividend companies, etc.
5. Bank of China Securities: Dividends highlight the characteristics of "ballast stone".
At the end of the first half of the year, A-shares had significant advantages in dividend assets and continued to strengthen their dominant style. In the short-term market risk appetite reduction stage, the dividend strategy continues to play the role of absolute return ballast. The factors that broke the market deadlock in the second half of the year came from the substantial repair of real demand or the further release of policies beyond expectations.
Last week, the regulator expressed his stance to "consolidate the foundation and cultivate the yuan", encouraging patient capital, and the expectation of short-term strong stimulus may be difficult to achieve. In May, the profits of industrial enterprises rebounded, and the cumulative year-on-year growth rate and the year-on-year growth rate of the month both fell from the previous value. Structurally, revenue growth rebounded by 0.3 percentage points, cost increased by 0.2 percentage points, and profit growth fell by 0.9 percentage points. In terms of industry structure, the petrochemical, nonferrous metals and other industries have continued the upward trend at the bottom since the beginning of the year, and the growth rate of the computer and electronic equipment industry has declined, but the overall level is still at a high level. The key to domestic demand in the second half of the year is the stabilization and recovery of real estate data and the fiscal force, until then the market needs to wait patiently.
6. Zhongtai Securities: The next month is an important long "window" in the second half of this year
In terms of fundamentals, the next month is an important long "window" in the second half of the year. In the context of the Politburo meeting at the end of April, which clearly required the policy to "move forward", monetary policies such as interest rate cuts and RRR cuts, large industrial funds, brokerage integration, and "strong reform expectations" before the Third Plenary Session of the CPC Central Committee may be more intensive.
Geographically, with the German Vice Chancellor's visit to China in the coming month, China and the EU are in a "risk window" of consultations, and short-term risks may have been fully released. In terms of market capital behavior, domestic long-term funds and industrial capital are the most important sources of incremental funds for A-shares, and they are also important factors in determining the relative performance of short-term market sectors. From the perspective of the recent buying direction of the above-mentioned funds, the key directions of capital operation such as mergers and acquisitions and restructuring (science and technology innovation board enterprises), etc., dividend + technology are the most important directions in the future.
At this point in time, it is recommended that investors can focus on the technology stock layout opportunities related to improved liquidity and risk appetite. In terms of the segmentation of technology stocks, you can pay attention to: core military industry, semiconductor equipment and AI hardware-related consumer electronics. Semiconductor equipment: Under the further strengthening of scientific and technological restrictions in the United States and other countries, industrial policies before and after the Third Plenum may further make significant efforts. AI PC and mobile phone hardware: Recently, after the release of a series of blockbuster products such as GPT-4o real-time interaction, Microsoft AI+PC, and Apple M4 chips, the new AI ecology that can directly run locally on PCs and mobile phones has been opened, which may bring a new round of consumer electronics replacement boom.
7. Haitong Securities: The improvement of three major factors in the second half of the year is expected to promote the rise of the market center
As far as the current round of market is concerned, the money-making effect of the market structure has been differentiated since April, and the trend of various indices has gradually turned to a resting after mid-May. The recent cooling of market sentiment is also relatively obvious, which shows that the current market has entered the stage of accumulation of fundamental verification. With the positive changes in risk appetite, capital and fundamentals, the three major factors affecting the market in the second half of the year, A-shares are expected to come out of the rest and the market center may go to the next level. On the sentiment side, the Third Plenum in mid-July is expected to be a catalyst for sentiment and promote the market's risk appetite. From a fundamental point of view, the fundamental inflection point is expected to be confirmed under the promotion of policies. In terms of capital, in the context of overseas interest rate cuts, the improvement of economic expectations and the recovery of corporate earnings are expected to attract long-term capital to return to the A-share market. Under the many positive changes, the center of the A-share index in the second half of the year is expected to rise compared with the first half of the year.
With the gradual improvement of fundamentals and capital in the second half of the year, the white horse sector with low valuation, low allocation and greater performance elasticity may prevail. China's advantageous manufacturing sector with increasing advantages and high performance certainty is expected to become the main line in the medium and long term, and the mid-to-high-end manufacturing with export competitive advantages and the scientific and technological manufacturing leading the development of new quality productivity are worthy of attention.
8. Shenwan Hongyuan strategy: some medium-term changes worth paying attention to
The validation period of the overseas political cycle has begun, and some expectations worth paying attention to:1. The strengthening of trade protection in the United States is a bipartisan consensus, and the strengthening of relevant statements during the election is actually expected, and the market impact may be limited. The key is to observe how Chinese export/overseas enterprises break the situation; 2. Anti-inflation is a bipartisan consensus, Trump uses high inflation to put pressure on Biden, and Trump's clues to reduce inflation and promote interest rate cuts are clearer. This could be a key difference between Trump and his previous terms.
The actual effect of the management's scientific and technological innovation policy layout is mainly to improve the elasticity of the right side of the market (improving the risk-return ratio), and the current industrial trend is still on the left side, and the market that only relies on policies to promote is mainly a thematic market. We suggest that better opportunities for science and technology innovation need to wait patiently for the arrival of the right side of venture capital in the new economy industry.
We continue to emphasize the judgment that the dividend in the third quarter is low and the relative return is superior. The judgment that the intrinsic stability of the stock price with high dividends is the first to recover has been verified. At this stage, science and technology only do prosperity investment, and after the disclosure of the second quarter report of the public offering (reflecting the increase in the position of prosperity technology in the second quarter), the game of prosperity technology will also increase. Continue to recommend high-quality companies in automotive IT, AI mobile phones and computing power. In the fourth quarter, the index pivot rose, and the elasticity came from the new energy vehicle battery chain, the M&A and restructuring of the technology track, and the investment opportunities of the export chain Alpha.
9. People's livelihood strategy: physical revaluation and preparation from defense to offense
In January ~ May 2024, the profit growth rate of domestic industrial enterprises will further decline, and the revenue growth rate will show signs of stabilization and recovery. Combined with the latest official manufacturing PMI data, compared with 49.5 flat last month, ending the downward trend that began in March, and after the expectation of "rushing for exports", new export orders in June did not decline further. Overall, the downward trend in economic activity has largely stabilized, which is markedly different from the decline at the beginning of the second quarter of 2023. However, the pattern of profit distribution is still worth paying attention to. From the perspective of profits and revenues of industrial enterprises, the profit growth rate of upstream industrial enterprises has shown a further upward trend, excluding the decline in non-ferrous mining revenue, and the upstream basic revenue also has a significant upward trend, showing a trend of both volume and price. From the perspective of the manufacturing industry as a whole, the revenue growth rate is picking up but the profit growth rate is declining, and the overall volume is rising and the price is falling, while the revenue and profit of automobile manufacturing and general equipment are falling, and the volume and price are under pressure. On the whole, the contractionary pressure of prices is widely seen in the middle and downstream fields, but upstream enterprises still have good bargaining power. Considering that the proportion of profits is still stable at a high level under the trend of upstream destocking since April, once the economy is expected to stabilize and rebound, the upward trend of profits will still have a certain elasticity, and the revaluation of production capacity value under profit redistribution is far from over.
Recognizing that the main line has not changed is itself an important marginal change in Q3: in the past two months of marginal weakness in economic activity, the physical consumption sector remained resilient, and resilient power and energy became the ballast stone of the market. We recommend: 1. Revaluation of the capacity value of upstream resource stocks: oil, copper, aluminum, coal and gold; 2. Focusing on manufacturing activities, the layout of a new pattern of global trade: shipping (dry bulk, oil transportation, container transportation, shipbuilding), power grid equipment; 3. Dividend assets: Physical consumption is the core of resilience, taking into account the absolute low valuations: electricity, water, gas and banks.
10. Everbright Strategy: The bottom of the upward trend can be expected to be styled or still biased towards the market
At present, the market is back in the bottom range, and it is expected that the market downside is limited, and the upside of the market depends on the timing and strength of key policies and the timing and elasticity of significant price increases. From the perspective of timing, it is expected that policy will be an important catalyst for the market in the third quarter, and the change in prices in the fourth quarter may be an important factor affecting the market. In terms of market style, historically, in the early stage of economic recovery, the performance of leading enterprises has a relative advantage, so in the context of the current gradual economic recovery, the performance of leading enterprises may be more resilient than that of non-leading enterprises, and it is expected that the market style will be biased towards the market.