Yesterday, the A-share market picked up, as of the close, the Shanghai Composite Index closed up 0.92%, the Shenzhen Component Index closed up 0.57%, and the ChiNext Index closed down 0.04%. On the first day of July, today is the 103rd anniversary of the founding of the Communist Party of China, and a number of "Zhongzitou" enterprises in the market took the lead in the rise, among them, the China Energy Conservation Index, the Central Enterprise Real Estate Index, and the Central Enterprise Coal Index rose first.
Data source: Wind, 2024.07.01, past data is not indicative of the future
In the first half of the year, central state-owned enterprises were sought after
In the first half of this year, the market was full of ups and downs, and the central state-owned enterprise sector with higher dividend yields and a more stable market was sought after.
Friends who are familiar with the market in the first half of this year should be able to find that in the first half of this year, the top three Shenwan first-class industries - banking, coal and public utilities, there are many "Zhongzitou" enterprises.
According to the latest research released by Goldman Sachs, mainland listed companies have returned more than 2 trillion yuan to shareholders through dividends and buybacks in the past three years. The report highlights that investment strategies focused on shareholder returns are increasingly dominating the market. Goldman Sachs also highlighted that some companies not only generate stable cash flow, but also show surprise potential in dividend distribution or buybacks, especially some central and state-owned enterprises.
At present, the market risk appetite is reduced, and the central state-owned enterprises are expected to resonate with the market's "high dividend" strategy under the requirements of focusing on market value management, so the high-dividend sector has the characteristics of attacking, retreating and defending.
FTSE China SOE Openness and Win-Win Index
Among the many industry indices related to central state-owned enterprises in the current market, the FTSE China State-owned Enterprises Open and Win-Win Index may be a good choice.
The FTSE China SOE Open and Win-Win Index has been an outstanding performer for a long time
Data source: Wind, FTSE Russell China official website, as of 2024.06.17, the past performance of the index does not represent the future, and the past performance of the index does not represent the performance of the product. Funds are risky and should be invested with caution.
Since March 2017 (the index was established), the FTSE China SOE Open and Win-Win Index has risen by 64.39% and nearly 50% since 2023, significantly ahead of the CSI 300 and better than similar comparable indices such as central enterprise innovation, structural adjustment, and state-owned enterprises along the Belt and Road.
Source: Wind, FTSE Russell official website, as of 2023 annual report. Past performance of the Index is not indicative of the future, and past performance of the Index is not indicative of the performance of the product. Funds are risky and should be invested with caution.
The profitability of the constituent stocks of the FTSE China SOE Open and Win-Win Index is relatively strong. Historically, its net profit and operating income attributable to the parent company have exceeded similar comparable state-owned enterprise indices such as structural adjustment, central enterprise innovation, and state-owned enterprise Belt and Road Initiative.
Back to the present, on the first trading day of the second half of the year, real estate stocks rose sharply to lead the market. With the introduction and implementation of the new policies for the property market in various places, the property market has gradually stabilized and the real estate industry has rebounded. The recovery of the real estate industry is not only good for many construction industry enterprises in the central state-owned enterprises, but also with the gradual emergence of economic recovery expectations, the central state-owned enterprises, as enterprises closely related to the macroeconomy, may have considerable development prospects in the second half of the year.
"Investment is risky, and you need to be cautious when entering the market"