Zhitong Finance and Economics learned that China Securities Construction Investment released a research report saying that at a time when the short-term long holiday is approaching and the market risk appetite is reduced, and policy and fundamental confidence is still weakMaintain the recommendation of the "three low" sectors (low valuation + low expectation + low chip pressure) + marginal catalytic sector, especially the central state-owned enterprises with asset quality and dividend yield improvement expectations catalyzed by policy support.
Four dimensions are used to screen companies that are valued or undervalued by the market: 1) PB PE is lower than the median value of the industry; 2) Asset quality, i.e., ROE (TTM) in the past three years is higher than the median value of the industry; 3) 21-23Q3 The average operating cash ratio is higher than the median of the industry; 4) 24-year profit expectation is stable and other dimensions. In addition, the technological growth direction of reasonable valuation + performance exceeding expectations + upward trend of the industrial cycle also has transactional opportunities in the ** period of emotional repair, concentratedOptical modules, semiconductor equipment, and storage Huawei ChainWait.
The main views of CSC are as follows:
The main factors of the recent market correction come from the level of capital and micro liquidity, and there have been many times in the history of passive selling of funds, and the subsequent repair** has often been rapid and violent. At present, the market overshoot signal is obvious, superimposed on the "Spring Festival effect" of the higher winning rate, it is recommended to first base on the "three low" (low valuation + low expectation + low chip pressure) sector, waiting for the market to stabilize, from the medium term, the further recovery of the market needs to wait for a strong policy boost, fundamental bottoming and incremental capital inflow and other good realization. It is recommended to pay attention to: electric power, power equipment, communications, coal, building materials, military industry, electronics, etc.
This week, market volatility intensified, liquidity pressure appeared on the capital side, and passive selling intensifiedThe performance of the U.S. non-farm payrolls data exceeded expectations, the Fed's interest rate cut expectations were delayed, the northbound capital inflow was limited, the current market stock and even the reduction of funds intensified, and the market in the "performance + policy" window period was overshooted. **The bottom characteristics are clear, and the PE valuation, net breakage rate and other indicators are similar to the historical bear market bottom. The differentiation of large and small markets has intensified, and the special valuation has accelerated the style interpretation.
The Spring Festival is approaching, and the loose liquidity of the market after the Spring Festival may bring a high winning rate of the stage**, from the perspective of the industry, after the Spring Festival, technology, nonferrous metals and other industries performed well. In the medium term, the further recovery of the market needs to wait for strong policies to boost, and the fundamentals are bottoming out and incremental capital inflows are realized.
At the industry level, at a time when the short-term long holiday is approaching and the market risk appetite is decreasing, and policy and fundamental confidence is still weakMaintain the recommendation of the "three low" sectors (low valuation + low expectation + low chip pressure) + marginal catalytic sector, especially the central state-owned enterprises with asset quality and dividend yield improvement expectations catalyzed by policy support. Four dimensions are used to screen companies that are valued or undervalued by the market: 1) PB PE is lower than the median value of the industry; 2) Asset quality, i.e., ROE (TTM) in the past three years is higher than the median value of the industry; 3) 21-23Q3 The average operating cash ratio is higher than the median of the industry; 4) 24-year profit expectation is stable and other dimensions. In addition, the technological growth direction of reasonable valuation + performance exceeding expectations + upward trend of the industrial cycle also has transactional opportunities in the ** period of emotional repair, concentratedOptical modules, semiconductor equipment, and storage Huawei ChainWait.
Focus on the industry
Electric power, power equipment, communications, coal, building materials, military industry, electronics, etc.
Risk Warning:
Geopolitical risks, higher-than-expected U.S. inflation, and the continued downside of the housing cycle