Key takeaways:
With the convening of the Politburo meeting and the upcoming economic work conference, the tone for next year has been gradually established, and the measures to stabilize growth are expected to be substantially implemented. At the same time, the current valuation of A-shares is at the lower quantile since listing, which is more attractive than overseas.
Combined with policy efforts and valuation divergence, we believe that in terms of style, the previous style of bias towards defensive value and bias towards small-cap stocks will be more balanced, and the growth style will remain strong. At the industry level, the big wave of intelligence is still the most important medium-term direction at present, and the steady growth of related sectors brought about by the gradual implementation of the "three major projects" will also usher in phased opportunities.
At the current valuation level, how will a be performed after the Politburo meeting?
1) Based on the analysis of this Politburo meeting in previous press releases, we believe that in terms of macro policies, the demand for stable growth next year will be stronger, the fiscal policy will be more promising, and the investment field is also expected to make further effortsIn terms of policy structure, next year's policy will not only strive to develop new economic momentum, but also support the development of traditional industries, and strive to stabilize the transformation of new and old economic momentumIn terms of industrial policy, the strategic significance of "self-reliance and self-improvement in science and technology" has been raised again, and "new urbanization" has also been mentioned again. It is expected that more policy arrangements will be implemented when the economic work conference is held.
2) Since 2023, as the slope of economic recovery has slowed down, the valuation of A-shares has fallen as a whole, and the center is now at a historical low. Side-by-side comparisons with overseas core stock indices, whether with emerging market or developed market indices, the current A-share valuation is attractive. In particular, the ** value valuation represented by the CSI 300 and the SSE 50 is at a very low quantile. Considering the force of policy, the overall low valuation and internal differentiation, as well as the changes in industry fundamentals, we believe in the futureThe previous bias towards defensive value and small-cap stocks will be more balancedThe weighted sector is expected to usher in ** by the end of the yearThe growth style will remain strong. At the industry level, the big wave of intelligence is still the most important medium-term direction at present, and the steady growth of related sectors brought about by the gradual implementation of the "three major projects" will also usher in phased opportunities.
Key takeaways:
AI empowerment, smart terminals or welcome a hundred flowers: Intel, Lenovo, Asus and other manufacturers vigorously promote the AIPC landing process, Intel is about to release the core Ultra processor for the next generation of AI PC, Lenovo will launch an AI PC that can run a large personal model Lenovo AI Now, ASUS will launch the first Zenbook 14 equipped with Core Ultra, according to IDC**, it is expected to be in China's new PC by 2027The penetration rate of AI PC will be as high as 81%., "AI + PC" is unstoppable.
AI stirs up the mobile phone market, vivo X100 series mobile phones are equipped with AI blue heart large models, Honor's new Magic OS system has landed a number of AI device-side applications, Xiaomi has created a "people, car and home full ecology" operating system with full penetration of AI large models, Samsung is about to launch an AI mobile phone Galaxy S24 equipped with a self-developed Gauss large model, and Huawei Mate60 has introduced Xiaoyi AI intelligent assistant based on the Pangu large model.
AI-empowered wearable devices have accelerated iteration, AI PIN has led the innovation of smart terminal interactive experience, WHOOP Coach smart bracelet has used GPT-4 to escort personal health, Meta has launched AI-empowered smart glasses and headsets, and Rewind pendant has used AI to intelligently store and capture real conversations.
Key takeaways:
On the whole, the general tone of the work of seeking progress while maintaining stability has not changed, and "stability" is still the fundamental foundation and prerequisite for "progress". In the face of the severe and complex external environment next year and the pressure to stabilize internal growth, we expect to continue to do a good job in stabilizing economic growth in 2024 and strive to keep the economy operating within a reasonable range.
At the same time, compared with last year's statement of "stability first, stability and progress", we believe that the policy tone in 2024 will not only maintain the basic requirements of "stability", but also emphasize the expectation of "progress", or point to the general tone of the policy in 2024 will be expansionary. The recent additional issuance of trillions of national bonds, the adjustment and optimization of real estate policies in first-tier cities, and the third-quarter monetary policy implementation report to support stable growth have also confirmed this, and the GDP target for 2024 may still be set at a high level of about 5%.
In addition, in terms of risk mitigation, the meeting emphasized "first establish and then break".It may refer to the resolution and disposal of three major financial risks (local debt risk, real estate risk, and small and medium-sized bank risk).There is a risk of "breaking", and it is necessary to ensure the smooth operation of the policy in the process of reform, and to advance steadily without rash progressAvoid short-term goals.