Since 2024, the mainstream A-share index has continued to fall, with the Shanghai Composite Index falling below 2,700 points, and the market is wailing and pessimism is pervasive.
However, the data reveals a different picture. As of Feb. 5**, the turnover of CSI 300 ETF and CSI 1000 ETF both exceeded 8 billion yuan.
On the morning of February 6, the CSI 300 index rose by 1%, and in the afternoon of the same day, the CSI 1000 index once **81%, the largest increase in history.
At present, the CSI 300 index is in a state of extreme undervaluation, and the A** field has launched a big **, which is interesting.
* Just like life, there will always be new opportunities after going through hardships. Every few years, the A** field will enter a cycle of "short bulls and long bears". Looking back at history, we can see that the last round of the A-share bull market occurred between 2019 and 2021, when core assets such as the CSI 300 index skyrocketed.
The CSI 300 Index is composed of the 300 most representative listed companies with large scale and good liquidity in the Shanghai market, and the changes in its industry weights reflect the upgrading of the domestic economic structure. In recent years, the proportion of finance, food and beverage industries in the index has declined, while the proportion of new economy industries such as consumption, information technology and medicine and health has increased significantly, which is consistent with the trend of China's industrial transformation.
Historically, the CSI 300 Index has grown at a CAGR slightly higher than China's GDP. In the past 10 years, China's GDP has increased steadily, which has also led to the steady growth of the CSI 300 index.
According to wind data, as of January 31, 2024, there are 85 constituent stocks with a circulating market value of more than 50 billion yuan among the constituent stocks of the CSI 300 Index, accounting for about 65% of the weight.
CATL's inclusion in the CSI 300 Index is one of the landmark events in recent years. In the field of lithium batteries, CATL has successfully expanded from Fujian to the world, ranking among the top five in the world's top 100 auto parts. The company expects net profit attributable to shareholders of listed companies to be 42.5 billion yuan to 45.5 billion yuan in 2023, a year-on-year increase of 3831% to 4807%。This earnings forecast shows the quality returns brought by the development of industry leaders.
In addition, according to Wind consensus expectations, the revenue of the CSI 300 Index in 2023 and 2024 is expected to increase year-on-year. 2%, the year-on-year growth rate of scale net profit is expected to increase significantly, from 205% rose to 1121% and 1286%。
It is worth noting that the policy level is also continuing to exert force, giving investors a "reassurance". Recently, the China Securities Regulatory Commission has repeatedly issued a statement to encourage and support various investment institutions to increase counter-cyclical layout, guide more medium and long-term funds into the market, and maintain market stability. This has undoubtedly given confidence to investors.
After a cold winter and darkness, investors are also witnessing the light of day after the long night has dissipated. For example, before 2019, the CSI 300 index hit rock bottom, but over time, investors saw the index fight back and soar.
So in the coming 2024, will investors witness this scene again? Warren Buffett once said that in the long run, the return on investment of holding ** is equal to the average ROE. This is also the core indicator commonly used by investors to measure the quality of listed companies.
Since last year, the CSI 300 index has fallen into a trough again, and the ROE has fallen back to a record low. However, from a valuation perspective, the index has a price-to-earnings ratio of just 1061 times, which is at a historically low level. However, its dividend yield is as high as 327%, which is at a historically high level and much higher than the current one-year or three-year bank deposit rate and 10-year treasury bond interest rate. This shows that the CSI 300 Index has the characteristics of "low valuation and high dividend", showing a high investment cost performance.
Statistics show that the top companies in many industries in the CSI 300 will pay cash dividends in 2023 (including annual dividends in 2022 and interim dividends in 2023), and many of them will have a dividend yield of more than 3%. For example, Zangge Mining has a dividend yield of up to 1521%。High dividend yield is one of the important indicators for listed companies to attract investors. The inflow of funds was the first to send a signal.
Recently, there has been a clear trend of funds pouring into the CSI 300 ETF ChinaAMC (510330). In the past 10 trading days, the net inflow exceeded 15.5 billion. This shows that investors are laying out broad-based ETFs at the bottom.
Winter is coming to an end, will spring be far away? Although there are always many impermanences on the road to investment, it is precisely after experiencing hardships that we can better embrace opportunities. Let's wait and see what surprises the upcoming 2024 will bring!