A-share deep V reverse public offering debate on high valuation structural opportunities

 A-share deep V reverse public offering debate on high valuation structural opportunities

The Shanghai Composite Index fell more than 2% in the morning trading of the 23rd, but it was forced to stop falling and recover. Long money again poured into the hot plate, the military plate concussion upward, and finally ranked the top of the industry plate with an increase of 4.43%. In addition, biological products, pharmaceutical business and other sectors also received large capital intervention in the afternoon, and finally achieved a rise of about 2%. According to Dongfang fortune data, the biological vaccine sector received a net inflow of nearly 1.4 billion yuan of main funds, and the main capital intervention of aircraft carrier concept, monoclonal antibody concept and other sectors was more than 1 billion yuan.

According to the performance forecast of 2020 semi annual report disclosed by A-share listed companies, the performance of manufacturing enterprises such as automobile and electrical equipment improved significantly, the performance of medical and technology sectors rebounded, and the performance of consumer industry remained stable. On the whole, structurally, there are still quite a number of industries in the macro-economy that need to be fostered. In the global liquidity to maintain a loose environment, the recovery of the A-share market is likely to continue

Liu Su, deputy director of research in the stock investment department of Jingshun Great Wall Fund, said he was optimistic about the stock market for a period of time in the future. On the one hand, domestic enterprises have gradually recovered from the impact of the epidemic and their profits have improved; on the other hand, the liquidity environment of the financial market is still relatively friendly, which has a greater support for market valuation.

Chuang Jin Hexin fund also said that the current economic recovery trend is established, and the cycle plate takes the lead. It is expected that the market will maintain the plate rotation pattern supported by macro factors. We can pay close attention to the epidemic situation, vaccine research and development progress, enterprise financial report and other factors.

Anchor in valuation

However, fund managers still have different views on the valuation differentiation among sectors.

Liu Su pointed out that in recent months, the large consumer sector represented by tax-free, medical services, food and beverage, and the science and technology sector represented by semiconductors and electronic components have led the way in overall performance, while the valuation of financial and real estate sectors has continuously hit new lows. From this differentiation, the importance of stock selection is greater than timing. Yang Ruiwen, deputy director of investment and fund manager of the stock investment department of Jingshun Great Wall Fund, also believes that some popular industries and companies have experienced rapid rise in the early stage, and there has been an obvious phenomenon of virtual high valuation. No matter how good the industry and company, there is valuation anchor.

However, some fund managers believe that virtual high valuation is a static perspective. For the growth industry with high momentum, if the time is a little longer, the sustained growth of enterprise performance will digest the short-term overvalues and return to the valuation anchor.

Cai Songsong believes that in the long term, scientific and technological innovation is an important weapon to help Chinas science and technology take-off. With the arrival of the peak period of 5g communication terminal construction, the business cycle of science and technology industry has just begun. At present, the static valuation of these stocks may be on the high side, but if we switch to next year or the following year, their performance growth will digest the valuation very quickly and basically reach a new steady-state valuation.

There are also fund managers who believe that the stock price is a kind of expectation for the future growth of enterprises, and good companies are not cheap is also a kind of normal. For leading companies with good growth, there will be a regression phenomenon of release of performance - lower valuation in stages, but it is unrealistic to expect them to go down to the valuation level of financial blue chip and other industries.

Layout of structural opportunities

In terms of future market layout, fund managers believe that valuation should match the boom and seek structural opportunities in their respective ability circles.

According to China Merchants Fund, the future market needs to closely follow the two cores of industry prosperity and valuation matching, look for structural opportunities with a positive attitude, focus on the post cyclical real estate consumption, undervalued finance and construction sectors in Pro cyclical industries, and select the consumer, pharmaceutical and technology sectors carefully.

Cai Songsong said that in the next investment in science and technology growth stocks, he will continue to focus on the high business cycle technology track with a top-down investment framework, and select excellent leading companies following the industrial logic. In the process of the companys growth, there will be a variety of factors. In the investment, we should have insight into the details of the target from the perspective of the big pattern, that is, while grasping the development rhythm of the industrial cycle, we should continuously track and deeply understand the technical barriers and product moat of technology stocks

After the periodic adjustment of the market, it is expected that the traditional cyclical industries will gradually fluctuate upward, while the big consumption and technology themes will fluctuate downward or sideways, thus completing the style switching of the market. Equity fund managers said that the recent market has been greatly affected by internal and external news, which is basically concentrated in the growth sector, which is likely to discount the follow-up performance of the growth sector. On the contrary, under the background of capital market reform and economic recovery, undervalued financial blue chip and cyclical plate are expected to usher in periodic market.

The recent growth plate is indeed in shock downward, and with the rise of the military industry and other plates, the undervalued plate is expected to take over the main line of the market. Next, the boom branches of traditional cycle industries can be appropriately long. Said the equity fund manager.

Source: Ren Hui, editor in charge of China Securities Journal_ NBJ9607