On January 24, the State-owned Assets Supervision and Administration Commission (SASAC) said that it would further study the inclusion of market value management in the performance appraisal of the person in charge of the enterprise, guide the person in charge of the enterprise to pay more attention to the market performance of the listed companies controlled by the company, and timely convey confidence and stabilize expectations through the application of market-oriented means such as increasing holdings and repurchases, increasing cash dividends, and better rewarding investors. Based on this background, the market once again set off a wave of "medium and special valuation", and along with it, the high dividend strategy is also boiling again.
In fact, in the Q2 period of last year, the "special valuation"** continued to be interpreted, and the "special valuation" was concerned together, and there was also a high dividend dividend strategy. Why do high dividends and medium valuations go hand in hand? What is the relationship between them?
To put it simply, there is a high degree of compatibility between the traditional high-dividend strategy in the A** market and the "medium and special valuation". As a result, companies selected based on this strategy generally exhibit high dividends, low valuations, and low stock price volatility. Most of these companies are rooted in traditional and well-established sectors such as banking, real estate, transportation, and utilities, where the leading companies are often dominated by large central state-owned enterprises.
A high-dividend strategy can stand out because it focuses more on the current value of the company than on the growth of the business, and mainly makes money on value return and dividend yield. But growth is really not important, right?
We know that there are two ways to obtain investment income in the secondary market, one is the growth of corporate performance, and the other is from dividend payments. Ideally, when the company has investment projects with high returns, it should use the operating income for reinvestment to achieve the improvement of operating performance; When the company lacks investment projects with high returns, it should use the operating income for dividend distribution. "Growth" and "high dividends" are both ways to generate returns for shareholders.
SDIC believes that with the increasing scale of China's economy, many industries have gradually entered a stable and mature stage from the past high-speed growth stage. From the perspective of investment returns, the market has gradually shifted from focusing on "growth" in the past to paying equal attention to "growth" and "high dividends", but "medium dividend + certainty growth" is a neglected value depression. In the context of the decline in market expectations and the intensification of volatility in the secondary market, "3-5% dividend yield" and "10%+ expected growth" are also a high-quality variety to obtain stable income.
msciThe China A50 Connect Index has the dual characteristics of "medium dividend + deterministic growth".
The index has the attribute of "medium and special valuation".
At present, the total weight of the constituent companies of the index is as high as that of central state-owned enterprises (including ** state-owned enterprises and local state-owned enterprises).！In addition, the dividend yield of the index in the past 1 year is about, the bonus attribute is outstanding!
The index has a high growth potential:
From the perspective of net profit attributable to the parent company, the year-on-year growth rate can reach in 2023, 2024 reachable, 2025 reach, maintain the expected growth of more than 10% for three consecutive years!
The index has a low valuation:
The current price-to-earnings ratio (TTM) of the index sits at 4 in the last five yearsAround the 23% percentile, this means that its valuation advantage is becoming more and more prominent, and it has a high price-performance potential.
The above data**: wind, as of 2024-01-26).
Underlying Index Opportunities:
Exchange ETF: A50 ETF (159601).
OTC Connection**: ChinaAMC MSCI China A50 Connection**(A:014530; c：014531）
A50ETF (159601)) closely tracks the MSCI China A50 Connect Index, and has a significant lead in the number of customers holding positions in similar products, with active trading. The top 10 weighted stocks are Kweichow Moutai, CATL, Zijin Mining, Wanhua Chemical, Luxshare Precision, BYD, Yangtze River Power, Industrial Fortune Union, China Merchants Bank and LONGi Green Energy, reflecting the performance of core leading assets in the A** field.
Looking ahead, once the Fed enters the interest rate cut cycle, factors such as interest rates, capital and subsequent global demand will continue to improve, stock prices will adjust to the deviation from fundamentals, and core asset valuations will be repaired.
Valuation System with Chinese Characteristics Risk Warning:
The MSCI China A50 Connect Index 2019-2023 full fiscal year results are: 43%、-3.29%、-20.64%，-16.27%。
1.The above ** is *** mainly invested in the underlying index constituent stocks and alternative constituent stocks, its expected risk and expected return are higher than hybrid**, bonds** and money market**, the product belongs to the medium risk (R3) variety, the specific risk rating results are subject to the rating results provided by **Manager and sales agencies. 2.There are major risks such as the deviation between the return of the underlying index and the average return of the market, the volatility of the underlying index, and the deviation of the return of the portfolio from the return of the underlying index. 3.Before investing in this company, investors should carefully read the "Contract", "Prospectus" and "Product Key Facts Statement" and other legal documents, fully understand the risk-return characteristics and product characteristics of this company, and fully consider their own risk tolerance according to their own investment objectives, investment period, investment experience, asset status and other factors, and make rational judgments and prudent investment decisions on the basis of understanding the product situation and sales suitability opinions, and independently assume investment risks. 4.The Manager does not guarantee a certain profit, nor does it guarantee a minimum return. The past performance of the ** and its net worth are not indicative of its future performance, and the performance of other ** managed by the **Manager does not constitute a guarantee of the performance of the **. 5.The manager reminds investors of the principle of "buyer's responsibility" in investment, and after investors make investment decisions, investors are responsible for the investment risks caused by fluctuations in operating conditions, share listing and trading, and changes in net value. 6.The registration of this ** by the China Securities Regulatory Commission does not indicate that it has made substantive judgments or guarantees on the investment value, market prospects and returns of this **, nor does it indicate that there is no risk in investing in dry capital**. 7.This product is issued and managed by Huaxia**, and the agency does not assume the responsibility for the investment, redemption and risk management of the product. 8.Connectivity: As a connection to a target ETF, the target ETF is a type, so the risks and returns of ETF Nexus are higher than those of hybrid, bonds, and money markets. ETF Connect** is subject to connection risk, tracking deviation risk, risk of deviation from the performance of the target ETF, risk of discontinuation of services by the index compiler, risk of change of the underlying index, risk of suspension or default of constituent bonds, etc. Class A** one-time subscription fee will be charged when subscribing, and there is no sales service fee; There is no subscription fee for category C, but there is a sales service fee. There may be a big difference in the long-term performance of the two due to different fees and establishment times, etc., please refer to the product periodic report for details9.The market is risky and investors should be cautious. The data is for reference only and does not constitute a recommendation. 10.ETF intraday gains and losses do not indicate* net performance.