**: IN coffee.
Conform to the 'slow' stage, but also be unwilling to be mediocre, to continue to pursue excellence, and give full play to the spirit of 'volume king'."
Yesterday (December 12), the Global Strategy 2024 Annual Strategy Report hosted by Industrial **Zhang Yidong, Global Chief Strategist of Henyep** and Co-Dean of the Institute of Economics and FinanceThe global "slow" era and investment opportunities are analyzed and interpreted in detail.
Zhang Yidong made it clear that under the pressure of high interest rates, the U.S. economy will slow down but still be relatively resilient, "Be cautious but not pessimistic about the U.S. economy, and 2024 will be a 'slowdown' rather than a 'stall'." ”
The general trend of inflation in 2024 is to fall, and economic and financial risks will become the key considerations for the Fed. And the 10-year yield on US Treasury bonds will fall, while the US dollar will move weaker than in 2023.
During the exchange, Zhang Yidong repeatedly talked about "slowing down" is not "stalling", and it is necessary to have an objective understanding of the US economy.
After all, the aftermath of the "super water release" in the United States is still there, the excess savings can only be basically spent in the first half of next year, and the household leverage ratio is relatively healthy, and the proportion of household debt expenditure to disposable income in the United States is also low, so there is no need to be too pessimistic.
Regarding the outlook for U.S. stocks, Zhang Yidong said that the index is still expected, but the probability of a small rise is high, and structural opportunities focus on areas where micro fundamentals are improving, such as information technology and the performance of the pharmaceutical industry is worth looking forward to.
When it comes to the domestic capital market, Zhang Yidong bluntly said that the way to win in the "slow" era depends more on the structure.
In line with the "slow" era, we are looking for the "volume king" in the field of manufacturing and consumption, but to break the "slow" era, science and technology is the core grasp, and we must strive to achieve self-reliance and self-improvement of high-level science and technology.
Looking forward to next year, Zhang Yidong believes that whether it is A-shares or Hong Kong stocks, next year will usher in a respite period and a repair period, which will not be as bad as this year, but it will not enter the bull market overnight, and it is likely to be a ** city repair.
In the repair, it is necessary to go at both ends of the offense and defense, "attack" to select "volume king" and science and technology, and "defend" to reverse thinking and low absorption and low wave dividends.
The following is the full content of this exchange to share with you:
The global "slow" era refers to the fact that the major economies represented by China and the United States will enter a new stage of relatively low or slow real GDP in the next few years after a period of high growth in the past few years.
At this stage, we must conform to the "slow" stage, but we must also be unwilling to be mediocre, and we must continue to pursue excellence and give full play to the spirit of "volume king". At the same time, respecting scientific and technological innovation and breaking through the "slow" era requires the power of scientific and technological innovation.
The exchange focused on four aspects, namely overseas outlook, U.S. stock capital market outlook, Chinese capital market outlook and China equity strategy.
1. The U.S. economy is likely to "slow down" rather than "stall" in 2024
First, let's talk about overseas outlook.
In 2024, the U.S. economy will "decelerate", and U.S. bond interest rates and the U.S. dollar may usher in a fall, and the probability of a decline in the first half of the year is relatively high.
Why is the U.S. economy slowing down?
First, the U.S. is a consumption-driven economy, with 70% of GDP supported by household consumption. Therefore, when analyzing the U.S. economy, the focus is on U.S. consumption.
From the perspective of consumption, the consumer credit of US residents has dropped very significantly from the second quarter of 2023, and the year-on-year growth rate of consumption has continued to decline. From the fourth quarter of this year to the first half of next year, the momentum of the U.S. residential sector to increase leverage will weaken.
Moreover, under the suppression of high interest rates, the consumption momentum of the United States will face some troubles, especially the suppression of housing sales in the United States is becoming more and more obvious.
Let's look at this graph.
Data**: CEIC
The blue line reflects the fixed rate on 30-year mortgages in the United States, which has soared all the way to around 8% from 2022 to date. The red line is the number of U.S. home sales, both new and second-hand, which can see a significant decline.
As a result, the Fed's continued tightening has begun to dampen demand.
From the perspective of the classification of U.S. residents' liabilities, excessively high interest rates have also suppressed the liabilities of the U.S. residential sector.
Data**: CEIC
The blue line is mortgage loans, mainly related to housing, and the gray line is car loans, which can be seen to have also seen a significant decline from the second quarter of 2023.
Currently, the growth rate of credit card liabilities remains high. Because credit cards have interest-free periods, every resident sector is still making full use of the interest-free period of credit cards in the case of high interest rates.
As interest rates reach a restrictive level and will remain in place for a longer period of time in the first half of 2024, the inhibitory effect of high interest rates on the leverage of the U.S. household sector will become more and more obvious.
On the other hand, the restraining effect of high interest rates on the leverage of the US corporate sector is also quite obvious, and the amount of non-financial corporate bonds issued has fallen relatively quickly this year.
This has inhibited buybacks in U.S. stocks. In a low-interest rate environment, U.S. listed companies are Xi to repurchase shares of listed companies through the money from bond issuance, thickening EPS and pushing up stock prices. The amount of bonds issued this year has declined significantly, which has had a certain impact on the profits of listed companies.
In addition to the inhibition of the household sector to increase leverage, the excess savings in the United States will gradually turn into consumption momentum in the second half of this year, and the excess savings in the United States are expected to be exhausted in the first half of next year.
In other words, the excess savings of the household sector brought about by the super water release in 2020 and 2021 have come to an end, although there is still inertia, which will support the US economy in the first half of next year, but the support will be visibly weakened.
This will make it normal for the US economy to slow down next year.
Second, another force that has supported the US economy to exceed expectations this year is the US fiscal stimulus.
In the third quarter of this year, the real GDP of the United States was about 6%, and the nominal GDP was as high as 9%, as the world's largest economy, the pattern of "elephant running" is unsustainable.
The fiscal stimulus is reflected in the increase in the individual income tax threshold on the residential side, which has increased the disposable income of residents and boosted consumer confidence very significantly.
At the same time, the U.S. fiscal stimulus is reflected in the guidance of private sector capital spending.
However, since next year is the first year in the United States, if there is a risk of exceeding expectations"Black swan", be careful of geopolitical risks as well as domestic political risks in the United States. Even if there is no black swan, there is a high probability that there will be party disputes.
In the first year, against the backdrop of high debt in the United States, the bipartisan battle between Republicans and Democrats will limit the room for fiscal expansion, because the Republicans control the House of Representatives, the House of Representatives holds the money bags, and fiscal spending needs Republican approval.
According to the estimates of the U.S. Congressional Budget Office (CBO), the U.S. public will hold 98% of GDP in 2023, close to the 106% level during World War II.
Against this backdrop, high debt could easily become a target for bipartisan attacks in the first year, thus limiting the deficit rate next year.
Let's look at this graph of the U.S. deficit ratio, which is the U.S. deficit as a percentage of GDP.
Data**: CEIC, CBO
According to the CBO, the U.S. deficit rate will fall to 5 in 2024About 5%, with 6 this year3% will also weaken the support for the U.S. economy.
The deficit rate in the United States was as high as 15% in 2020, nearly 12% in 2021, and 6 in 20233%, which could slide further to 55%。As a result, the boosting effect of U.S. fiscal stimulus on the U.S. economy next year will be weakened.
This gives us an observation perspective, not to treat the high deficit rate as a tiger and a wolf, but to emancipate the mind and solve problems in the process of development.
Although the structural problems of the United States are large, in recent years, the United States has expanded demand and actively increased leverage to mitigate risks, make the balance sheet of the household sector healthier, and make the economy more resilient.
Next year, the US economy will slow down, on the one hand, the surplus grain of landlords' households will decrease, excess savings will decrease, and the household sector will not be as laviish as before. On the other hand, the impact of fiscal stimulus has weakened, and the deficit ratio has fallen.
It is normal for the U.S. economic growth rate to fall next year, which is a "slowdown" but not a "stall".It is necessary to have an objective view of the US economy, and we should not think that once the "slowdown" is a financial crisis and a hard landing.
In the short term, the U.S. economy is resilient, and the leverage ratio of the U.S. household sector will remain healthy at least in 2024, and the proportion of household debt expenditure to disposable income will remain at a historically low of only about 10%.
Because of the large release of water in the United States in 2020 and 2021, in the environment of low interest rates and zero interest rates at that time, a large number of American residents locked in low interest rates through long-term fixed-rate liabilities, such as 10 or 30 years.
So, despite the sharp interest rate hikes in the United States in recent years, the balance sheet of the US household sector has not deteriorated.
Overall, the leverage ratio of the U.S. residential sector is healthy, and the debt ratio is at a historically low level, which shows that the debt pressure of U.S. residents is small, which is the core foundation for the resilience of the U.S. economy in the future, and it is also the biggest difference from 2008.
In the medium and long term, this wave of AI technology led by the United States may drive a new Jugra cycle in the United States and even the world, similar to the 90s of the 20th century.
Biden has passed a series of preferential policies such as the CHIPS and Science Act and the Inflation Reduction Act to attract advanced manufacturing to return to the United States.
According to Biden** data, the total planned investment in high-end manufacturing to return to the United States continues to rise, and as of November 20, 2023, private companies have announced future industrial investment plans of up to $614 billion, which is still to increase capital spending in the environment of high interest rates in the past two years.
Invest in **?
This chart shows the number of non-residential construction completions in the United States, mainly construction investment and factory investment.
Data**: CEIC
The blue line reflects projects related to computers, AI, electronics, semiconductors, advanced packaging, power equipment, and some clean energy, whose plant construction has soared since the second half of 2021.
Usually the investment cycle is divided into several steps: the first step is to establish the project and build the plant;The second step is to equip the equipment and update the equipmentThe third step is to form an intellectual property patent.
At present, the growth rate of equipment investment in the United States is still hovering at a relatively low level, and this round of AI wave is only reflected in the construction of plants.
You can focus on observing whether the investment in equipment renewal will begin to reverse next year.
If there are such signs, we have reason to believe that this wave of AI led by the United States is driving a new Jugra cycle in the United States and even the world, similar to the 90s of the 20th century.
So, in the medium to long term, we may be at the beginning of a Jugra cycle.
However, from a short-term perspective, the U.S. economy may slow down normally next year, at the end of the boom brought about by the super release of water in 2020 and 2021.
So,Next year is very interesting, as it is equivalent to the alternation of two cycles, both the end of the short-cycle boom and the possible beginning of a new Jugra cycle. It is more certain that the short-term downside will be, and there is still uncertainty about whether the medium-cycle can begin.
With more and more tech giants investing in AI and the latest advances they are making, when the Fed starts cutting interest rates next year, there may be more private companies willing to increase capital spending.
If more private companies are willing to join this wave of technology, perhaps in 2025 or 2026, the United States and the world may confirm a new Jugra cycle.
Therefore,I am cautious but not pessimistic about the US economy, and 2024 will be a "slowdown" rather than a "stall". The United States may not have a major crisis or a hard landing next year. A soft landing is the consensus expectation of the market. But it can also be somewhere between a soft landing and no landing.
Second, the general trend of inflation in 2024 is to fall
Now that we've talked about the U.S. economy, let's talk about inflation in the U.S.
In the short term, I am optimistic about inflation in 2024, but in the medium to long term, I am not optimistic about inflation in the United States.
In the short term, the U.S. economy is falling, and inflation may fall next year, especially considering that the Federal Reserve will maintain relatively tight financial conditions in the first half of next year, which will make the core services inflation in the United States fall as scheduled.
However, if the Fed starts easing interest rate cuts in the first quarter of next year, as everyone expects, (which we judge is a small probability), the inflation situation in the United States will be disturbed, especially the super core inflation may exceed expectations**.
So, still according to the Fed's model, preferably before next year.
Maintain a tight monetary policy for three or four months, so as to completely reduce this round of inflation.
Therefore, inflation is likely to fall in 2024.
In the medium term, we need to be wary that when the United States confirms that it has entered a new round of the Jugra cycle, the cycle of equipment renewal investment, the return of advanced manufacturing will eventually lead to a tight labor market in the United States, and super core services inflation is easy**.
Once the United States confirms the Jugra cycle from 2025, the core inflation and overall inflation level in the United States are likely to return to the level of the first decade of the last century, a little lower than the seventies, after all, there are still globalization dividends, although they have been damaged, but the globalization dividend makes the integrity and efficiency of the industrial chain and the first chain higher than in the seventies and eighties.
Even taking into account the de-risking and restructuring of the ** chain in the United States, under the general trend of manufacturing returning to the United States, inflation in the United States will at least return to a level similar to that of the mid-to-late nineties (3%), which is higher than the level of the past 20 years (2%).
Combining the above two considerations,Inflation and the economy will fall in 2024, and the Fed will most likely pivot. However, it will be up to the US to enter the next Jugra cycle in 2025, and if so, it may usher in inflation** and US interest rate hikes.
Combined with our view on super-core services inflation, if the Fed considers easing next year, it should be in the mid-to-late Q2May and June may be the time nodes when the Fed has a high probability of easing.
In the second quarter of next year, there will be no need to worry about inflation at all, and economic and financial risks will become the main consideration for the Fed.
Among them, there are two main financial risks:
One is that the reverse repo "reservoir" is expected to return to normal levels by the second quarter of next year, and if the Fed continues to tighten, it will lead to liquidity risks.
Except for the brief expansion of the balance sheet in March this year, on the whole, the Federal Reserve is shrinking its balance sheet, and the U.S. Treasury is also continuing to issue Treasury bonds, and reverse repo has become the core force to hedge the Fed's balance sheet reduction and undertake the new Treasury bonds issued by the U.S. Treasury.
Over the past few years, due to the great easing in the United States, the reverse repo market has become a "reservoir" and has accumulated liquidity. However, from the second half of 2023, after the end of the U.S. debt ceiling crisis, the U.S. Treasury began to issue a large number of Treasury bonds, and the reverse repo market was rapidly depleted.
According to the pace of consumption this year, by the second quarter of 2024, the reverse repo market will basically return to the normal level before the epidemic.
If the Fed continues to continue to relax at that time, it will have a significant impact on the reserves of the US banking system, bringing bank reserves to what the Fed considers to be a critical threshold.
We refer to the values in 2019 when there was a liquidity shock in the repo market, when US bank reserves were around 8% of GDP, and the Fed began to expand its balance sheet and easing.
At present, the ratio of U.S. bank reserves to GDP is about 10%, considering the pace of the Fed's monthly balance sheet reduction of $95 billion, and considering that the reverse repo market will return to normal levels in the second quarter of next year, at that time, in order to prevent shocks and risks in the banking system, next year.
In May and June, the Fed is likely to "borrow the slope to get off the donkey".
At that time, the growth data and inflation data in the United States have fallen, and if they are not relaxed, there may be liquidity risks in the banking system due to low reserves.
Therefore, one of the opportunities for the Fed to ease policy is the normalization of the "reservoir" by the second quarter.
Another factor is that if the second quarter of next year is not relaxed, the risk of a commercial real estate explosion in the United States will be strengthened, and at the same time, the probability of small and medium-sized banks in the second quarter next year is higher.
Combining the above factors,Next year's Fed easing will be implemented in early summer.
3. The 10-year yield on U.S. Treasury bonds will fall in 2024
After the Fed easing, we need to focus on whether the US has a soft or hard landing.
Judging by the US Treasury yields, from the 80s of the 20th century to the present, there have been about six rounds of interest rate hike cycles turning into interest rate cuts, and we found an interesting phenomenon after combing through it.
Before the first rate cut, Treasury yields were all in retreat, and the trend was clear.
After the first interest rate cut, if the U.S. economy has a soft landing, U.S. Treasury yields begin to stabilize, ** rise, U.S. bonds have a small bull market, and U.S. stocks are not bad.
If the U.S. economy has a hard landing, the downward trend in U.S. Treasury yields will continue to be violent and fluid, with a big bull market in U.S. Treasuries, but U.S. stocks are bearish.
For example, the last interest rate hike in February 1995, the start of interest rate cuts in July 1995, before the first rate cut, the US bond bullish, the 10-year US Treasury yield has been "rushed", the 10-year US Treasury yield fell by about 160 bp at the lowest, but after the start of the interest rate cut, there was a period **.
At the moment, the probability of a soft landing in the United States may be higher, and U.S. bonds are expected to be in a small bull market. In terms of pace, the fourth quarter of 2023 (the 10-year Treasury yield) is likely to be above 4%, and it is difficult to fall below 4%.
Judging from the downward rhythm of U.S. Treasury yields, in the first half of 2024, especially in the first quarter, considering the resilience of the economy and the stickiness of inflation, the lower bound of the 10-year U.S. Treasury yield is still expected to be around 4%.
In the second quarter, as inflation falls and employment and economic pressures rise, the Fed is expected to start cutting interest rates, which will further open up the downside of the 10-year Treasury yield, which is expected to reach a low of 3 before and after the first rate cutAbout 5%.
From a long-term perspective, if the U.S. confirms the Jugra cycle, the long-end interest rate on U.S. Treasuries may reference the U.S. 90s.
In the 90s, the 10-year yield on US Treasury bonds fluctuated between 6% and 8%, which is a high of 7%.
Considering that the debt ratio of the U.S. sector and the overall U.S. debt ratio are both at historically high levels, even if there is a new Jugra cycle, the fluctuation range of long-term interest rates on U.S. bonds will be lower, and 4% may become the fluctuation center of long-term U.S. bonds.
Fourth, the trend of the US dollar in 2024 will be weaker than in 2023
Looking at the U.S. dollar again, from a short-term perspective, the U.S. economy will turn from strong to weak next year, and the long-term interest rate of U.S. bonds will fall.
After years of deflation, Japan has begun to reflate, and the Bank of Japan will abandon YCC (yield curve control) next year and exit the ultra-loose monetary policy environment. Add to that the fact that the European economy is doing better than this year.
Combined with the above considerations, in the first half of next year, the dollar is expected to weaken, and the dollar index is likely to return to within 100, or even back to around 98.
But it will not necessarily continue to weaken in the second half of next year. If the US economy experiences 1-2 interest rate cuts in the second half of next year and the expectation of a soft landing is realized, the dollar may stabilize around 100.
In the long run, if the U.S. cycle of capital spending on scientific and technological innovation and investment in equipment renewal kicks in, the dollar is hopefully similar to the strong dollar in the 90s. But without a new cycle, the dollar's highs this year could be the highs of many years to come.
In the face of the future, we must always have dreams in our hearts and believe that the power of science and technology innovation can form a breakthrough in the "slow" era.
Fifth, look for novelty in the plain, and science and technology will continue
The second part is about the outlook for the U.S. market.
On the whole, looking for novelty in the ordinary, science and technology will continue.
Flat means that next year's US GDP will be worse than this year's in both nominal and real terms, but not necessarily a hard landing.
Looking for novelty in the dull is to look at the earnings of listed companies, and many people think that if the U.S. economic growth rate falls, the earnings of listed companies will collapse.
Let's look at this picture.
In terms of S&P 500 earnings growth, this year is the lowest point in the past two or three years, and next year will be better than this year, both year-on-year and month-on-month.
On the one hand, the U.S. economy remains resilient.
On the other hand, the fall in interest rates has helped the repurchase of U.S. stocks. Because a large part of the earnings of listed companies in the United States is the contribution of buybacks to EPS.
This year's buybacks are slightly different from previous ones, and next year's buybacks may return to a strong position.
According to FactSet statistics, in the second quarter of this year, the S&P 500's earnings bottomed out year-on-year and began to recover in the third quarter, with the S&P 500's earnings** of 3% in the fourth quarter and 6 in the first quarter of next year6%, compared to 10 in the second quarter of next year8%。
As a result, U.S.-listed companies tend to be ahead of the macroeconomy, not follow.
Big tech stocks will remain an important driver of S&P 500 earnings growth next year, and a little different from this year, 2024 may be a hundred flowers, and this year is the "seven golden flowers".
This year, whether it is the contribution to corporate earnings or the contribution to the index, excluding the "seven golden flowers", the performance is mediocre.
For example, the S&P 500EPS in the United States grew by 4 percent year-on-year in the third quarter of this year7%, of which the total contribution of Nvidia, Amazon, Mate, and Microsoft is 54%, and the performance of other constituent stocks was negative.
Next year, except for the "Seven Golden Flowers", the earnings of other technology stocks and growth stocks will start to improve.
From the perspective of sectors and industries, in 2024, U.S. stocks in pharmaceuticals and information technology are industries with a large and high growth rate in EPS** growth, and the end of negative growth in energy and raw materials will also promote the recovery of S&P 500 earnings.
Among them, there is still an incremental demand for AI in information technology, and AI-driven software and hardware industries.
First, the AI wave is driving high demand for upstream hardware, and the performance of the AI hardware sector is expected to continue to grow rapidly in 2024, including computing power chips, advanced packaging, high-bandwidth memory, and high-speed optical communications.
Second, the AI wave is driving an increase in software investment, which will benefit leading software vendors and vertical applications of AI in subdivided industries.
Third, semiconductors and consumer electronics have begun to show early signs of recovery in 2023, and by next year, the mobile phone and PC industries will intensively release new AI products, which is expected to accelerate the replacement cycle of consumer terminals and play a supporting role in semiconductors and consumer electronics.
It is difficult for U.S. stocks to have a significant bear market next year when U.S. listed companies are making better profits.
Next year, it is likely that the seven largest technology companies, M7, Apple, Microsoft, Amazon, Google, Nvidia, Mate, and Tesla have stable earnings, so they will set up the stage, and other more profitable technology stocks will sing.
That said, the US index will perform mediocre next year, but the opportunity remains.
Opportunity is in
Looking back at history, we have analyzed six phases of monetary policy transition from tight to loose since the 80s. Information technology, finance, utilities and communication services performed relatively well during the transition period.
Among them, information technology coincides with the bottom-up profitability we just had**, so information technology will still be the winner next year.
Communication services driven by information technology are also a good development direction, and these are "white horses".
And U.S. stock finance may be a "dark horse".
Because financial stocks have made a sharp adjustment after the accident of Silicon Valley Bank this year, and also because of the rapid interest rate hikes in 2022 and 2021 in the bear market that previously disposed of the bond market, the balance sheets of US financial companies, especially banks, have deteriorated.
As these problems gradually resolve next year, if a soft landing is achieved after a rate cut, US financial stocks may usher in more than expected excess returns in the second half of next year.
Summarizing the outlook for U.S. stocks, we believe that there are three scenarios next year, scenario one, soft landing, the index of U.S. stocks next year is almost the same as this year, at most a small rise.
Scenario 2, the pattern of a hard landing, will fall by about 8% next year.
Scenario three, no landing. Measured by the S&P 500, U.S. stocks may reach about 10%.
Overall,There is a high probability that U.S. stocks will rise slightly next year, but they will focus on areas of micro improvement.
6. In the "slow" era of high-quality development, China still has no shortage of opportunities for high profitability elasticity
The third part is China's capital market.
China's nominal GDP growth will stabilize next year, expected to be above 5%, but it is still in a slowing and slow phase compared to history, but real GDP growth is likely to be slightly lower than in 2023.
Therefore, we need to adapt to the "slow" era of high-quality development, and the way to win investment depends more on the structure.
In the medium term, under the influence of the switch between old and new kinetic energy, the economic growth rate will still be in the process of boiling out, slow but not stalling. The negative impact of the landslide of old drivers such as real estate on China's economy still has inertia, but it will weaken, and new economic structures and momentum will gradually emerge.
We need to boost confidence that China's economy will not collapse easily and land hard, and that the theory of China's economic collapse is wrong every time.
However, it is also necessary to be prepared for a protracted battle, after all, it takes time to defuse the risk, and it will not be achieved overnight. Everyone does their part, and if the micro level is good, the macro will have a turnaround.
In the "slow" era of high-quality development, investing in China should focus on structural opportunities with high profitability elasticity, which are mainly divided into three aspects.
First, China's high-quality manufacturing industry will emerge with some globally competitive and leading enterprises. For example, China's "volume king" in the fields of new energy vehicles, new energy, electronics, communications, military machinery, fine chemicals, precision manufacturing, etc., may become the "volume king" of the world.
However, the "volume king" is different from the "volume", we must carefully distinguish, the "volume" may also be the leader in the industry, but the gross profit margin of the "volume" is not available, the loss of the "volume", and even the industry-wide loss of the "volume", these "volume" is a value trap, which may "roll" to "death", we must stay away.
The "volume king" I am talking about here refers to maintaining a stable gross profit margin and profitability in the involution of the domestic market
It is best to "roll" from China to overseas and capture the market overseasObtain higher gross profit, and then improve the overall gross profit margin and ROE of the enterprise, this is the real "volume king".
The second aspect is the rise of the "volume king" in the consumer field to meet the cost-effective consumption.
There are two phenomena this year, one is the Pinduoduo phenomenon and the other is the Luckin Coffee phenomenon, both of which are turning global in a cost-effective model.
In the process of rolling, it expanded its market share and revenue, but did not lose gross margin, which is similar to Uniqlo or Muji in Japan back then.
In the future, in the field of consumption, it is necessary to dilute the macro total growth rate and select the "volume king" of subdivisions.
In the third aspect, the core grasp of breaking the "slow" era is still scientific and technological innovation.
It is necessary to keep an eye on the AI wave, actively exert efforts in computing power, infrastructure and applications, use AI to reshape the manufacturing industry and industrial chain, and strive to keep up with the global wave.
Another goal is to make up for shortcomings, make positive breakthroughs in the field of bottlenecks, and ensure a new development pattern with a new security pattern, which is also an important opportunity.
7. Select the "King of Volumes" and scientific and technological innovation, and reverse thinking to absorb low-wave dividends
Finally,Our view on China is that it can't be as bad as this year, and that both A-shares and Hong Kong stocks will have a period of respite and recovery next year.
In the past two years, A-shares and Hong Kong stocks have ranked low in terms of gains and losses in major global indices.
But feng shui takes turns. With US Treasury yields falling in the first half of next year, external liquidity is expected to improve in phases, and more importantly, China's nominal GDP is starting to stabilize, bringing more structural opportunities than this year.
Next year, China is expected to be restorative, don't be too pessimistic, it won't be as bad as this year, but don't be blindly optimistic, and there will be no big bull market right away.
In my opinion,Next year will still be a **city repair**, in the repair**, we have to go at both ends of the offensive and defensive.
From an offensive point of view, select "Volume King" and science and technology.
From a defensive point of view, it is to think backwards and lay out bond-like assets with low volatility dividends on dips.
From a timing perspective, we should focus on the offensive level from now until the first half of next year. At present, the risk premium of China's ** is too high, everyone is overly pessimistic, and the mood is too at the freezing point, which is precisely the opportunity period for investment.
At the end of the year and the beginning of the year, it is recommended to actively lay out the cross-year**, and optimize the "volume king" and scientific and technological innovation in the cross-year**.
From a style point of view, next year's new investment opportunities will return to good companies, looking for "volume kings".
This year's style is mainly around the direction of no short-term earnings elasticity, including low-volatility dividends, which are bond-like;This also includes micro-cap stocks**, which are the dream of unclear hype.
Next year's low dividends are still worth allocating on dips. Micro-cap stocks** may further spread to science and technology**, focusing on the mapping of US stocks.
Next year, with the stabilization of nominal GDP, the profitability of listed companies will return to elasticity, and there is a main line of investment, which is to invest in "good companies", and to find the "volume king" in the best companies in various fields. "Volume King" may be the core asset of China and even the world to break through the "slow" era in the future, or the core asset of the new era.