At present, based on the calendar effect, technical analysis and other dimensions, as well as with the recent introduction of various policies to stabilize growth and stabilize the market, the disturbance of performance after the conditional mandatory pre-disclosure of the annual report of listed companies has come to an end temporarily, and it is expected that the market turnaround is expected to come soon. 
Investor Network" Special Wealth Navigator Mao Rui.
The three major indexes opened mixed in early trading on Wednesday. After the opening, the index was above and below the flat line**, and the ChiNext index performed slightly stronger. In the afternoon, the index gradually weakened and continued to move slowly lower until the market closed. In the end, the Shanghai Composite Index, the Shenzhen Component Index, and the ChiNext Index fell by 148%, down 195%, down 066% were reimbursed. On the disk, there are 27 limit stocks (excluding ST) and 128 stocks falling limit (excluding ST), indicating that the market sentiment is panicked; The change-change ratio is 306:4765, and the average increase is -443%, the loss effect is significant, and the turnover of the two cities is 758.3 billion, an increase of 14 from the previous trading day26%。The net inflow of northbound funds exceeded 3.7 billion.
As the last trading day of the first month of 2024, the market is still falling endlessly, the Shenzhen Component Index and the ChiNext Index have continued to hit new lows for more than 3 years, and the ** side has fallen even more sharply, with an average decline of more than 4%, and the number of falling limits after excluding ST shares has even exceeded the day of the big fall on January 22, and the market panic has reappeared. At the same time, yesterday also officially gave birth to a historical record of A-shares, that is, the first time that **month** appeared six consecutive yin. In addition, the average stock price index, which is more reflective of the overall market conditions, fell by as much as 2131%, which is also second only to the circuit breaker in January 2016.
The current market is obviously in an extreme situation, as the saying goes, "things must be reversed", the same applies to **, after similar situations in the past, especially after the previous **trend has experienced a long time**, and then this panic **, often corresponds to the final stage of the **trend, as in late April 2022, ** in the following two months respectively. 66%**. In yesterday's morning comment, Uncle Rui also came to the judgment that the market is expected to usher in a turnaround in February from the perspective of the probability after the sixth consecutive yin, the perspective of the calendar effect in February in the history of A-shares, and the comparison between the current and historical bottoms.
In addition, from a technical point of view, there is a basis to support this judgment. In terms of spatial structure, the bear market is usually manifested as ABC three waves**, and the medium- and long-term ** trend of this round from February 18, 2021 to the present is also relatively clear in this structure: 3731 on February 18, 2021 to 2863 on April 27, 2022 is wave A**; After that, 3418 on May 9, 2023 is wave B**; This is followed by wave c**. In the first two bear markets (i.e., the bear market down at 6124 in 2007 and the bear market at 5178 in 2015), wave C** lasted for 37 weeks, and the 37 weeks since May 9, 2023 correspond to this week; In the first two bear markets, wave C fell less than wave A. If we assume that the decline of wave C is equal to the decline of wave A, then 3418 is measured as the starting point of wave C of this round of medium and long-term trend, and the corresponding point is 2734 points, and ** has fallen to a minimum of 2724 on January 22. Therefore, from this point of view, whether it is based on time or space, the current adjustment should be basically in place.
After yesterday's panic**, the market's concern about the "liquidation" of snowball products has heated up again. Uncle Rui mentioned in the previous morning comment that the snowball products linked to the CSI 500 and CSI 1000 were below 4800 and 5200 respectively, and yesterday the CSI 500 and CSI 1000 indices not only fell below 4800 and 5200 respectively, but also hit new lows. In this regard, Uncle Rui thinks that there is no need to worry too much, because according to the estimation of China Merchants **, it will be about 29 on January 22 alone0% CSI 500 Snowball, 235% CSI 1000 snowball, cumulative (excluding these two days) has knocked into 548% of the CSI 500 Snowball, 590% CSI 1000 snowball. In other words, most of the risk has been released, and from the perspective of the CSI 500 and CSI 1000 indexes, which have a more direct impact on the snowball products, yesterday's decline was not significantly greater than that of the spot, which also reflected this from the side. And, looking back at history, the last time a snowball product was knocked in was in late April 2022, and when this risk was released, the market quickly ushered in a strong ** in the following two months.
To sum up, Uncle Rui believes that the current market is close to the time when "things must be reversed", as long as it survives, spring is expected to gradually unfold. At the corresponding operational level, it is also recommended that those with light positions increase their positions on dips, and those with heavy positions hold shares patiently to rise.
In terms of sectors and hot spots, on the market yesterday, in terms of industries, sorted in an unweighted manner, only insurance closed up against the trend, and hotel catering, tourism, and software services were among the top decliners. In terms of subject matter, combined with the number of increases of more than 5%** and the increase in sector indexes, there are no obvious active sectors.
Yesterday, there was still no hot spot in the market, so let's talk about the relatively resistant "medium and special assessment". Yesterday, although the China Special Valuation Sector Index was also affected by the overall market and finally closed down, it fell by only 062%, and the ratio of rise and fall in the sector is also second only to the insurance sector. The recent relative strength of the special valuation sector is mainly due to the positive support of the SASAC that "the market value management effect will be included in the assessment of the person in charge of the first enterprise". In addition, there are also elements that benefit from mysterious funds to stabilize the index and care for market sentiment. Uncle Rui believes that the key to whether the "special valuation" market can continue to maintain a relatively strong future is whether the market sentiment can pick up significantly, so as to achieve the purpose of protecting the disk of mysterious funds, and the second is based on the "seesaw" between the value and small and medium-sized growth, to see whether the follow-up growth varieties can rise. At least from the current point of view, the relative advantage of the "special assessment" should continue, and we can continue to pay attention to it. As for the focus of attention, due to the previous **, the varieties with large valuation discounts have been initially repaired, relying only on valuation screening, the odds of winning or will weaken, and more attention should be paid to the varieties with strong sustainability driven by profits and dividends. As a way to improve ROE, dividends are in line with the assessment goal of "one increase, one stability and four improvements", and pay attention to the state-owned enterprises in the industry in the past five years from top to bottom. Starting from the financial analysis framework, the valuation and stock price after dividends decline simultaneously, and some value outflows but EPS does not change, BPS decreases and ROE increases. The ROE improvement in "one increase, one stability and four improvements" focuses on the quality of the main business, and also encourages enterprises to actively and stably distribute dividends. Considering that most state-owned enterprises are in a relatively mature industrial cycle and their growth is not as good as that of emerging industries, dividends are a more logical choice. From the perspective of the dividend rate of central enterprises in the first-class industry, the dividend ratio of central enterprises in the communication and steel industries has continued to increase in the past five years, and the dividend ratio of public utilities and petroleum and petrochemical central enterprises is relatively high, and the long-term dividend situation is stable. In terms of the screening of **, you can refer to the following three clues: 1) Dividend + undervaluation + ROE + stable dividend: the valuation quantile of the past year and the past three years is less than 40%, there are cash dividends in the past three years and the dividend ratio is greater than 30%, the expected ROE (TTM) in 2023 is higher than the third quarterly report, and the static dividend yield (dividend yield in the past 12 months) is greater than 3%. 2) Low valuation and dividends: In the past three years, there have been cash dividends, and the dividend ratio has increased year by year, and the valuation quantile is less than 30% in the past year. 3) Long-term stable dividend + upward trend: the number of cash dividend years in the past 10 years is more than 8 years, the minimum value of cash dividend ratio is greater than 30% and not more than 100%, and the dividend ratio in the past 3 years is better than the average level in the past 10 years. Based on the above three clues, on the news side, on January 31, the Silicon Branch of the China Nonferrous Metals Industry Association released the latest transaction of solar-grade polysilicon**. The average transaction price of n-type material was 7190,000 tons, week-on-week **141%；The average transaction price of n-type granular silicon was 6100,000 tons, week-on-week ratio of **167%；The average transaction price of monocrystalline re-feeding was 6180,000 tons, week-on-week ratio of **148%。Among them, N-type materials have achieved three consecutive increases, and the cumulative increase has been close to 6%. In the previous morning comment, Uncle Rui had mentioned that the continuous adjustment of the photovoltaic sector in the past year or so is not due to the decline in the industry's prosperity, in fact, according to the data of the National Energy Administration on December 19, China's new photovoltaic installed capacity from January to November was 16388GW, a year-on-year increase of 1494%, of which China's new photovoltaic installed capacity increased by 185% year-on-year in November. The data reflects that the demand side of the photovoltaic industry is still very prosperous. The real reason behind the continuous adjustment of the photovoltaic sector in the past year or so should be due to the overcapacity of the photovoltaic industry, which has led to concerns about intensified competition within the industry. Previously, for the first time in a long time, P-type silicon wafers and photovoltaic EVA adhesive films have collectively appeared and N-type silicon materials have achieved three consecutive increases, indicating that after fierce industry competition in the early stage, production capacity has been cleared to a considerable extent, and the war in the industry tends to ease. Looking ahead, with the gradual start of downstream demand after the Spring Festival, it may further drive the industrial chain, which also means that industry fundamentals and market expectations are expected to usher in an inflection point. Looking forward to 2024, the industry has the following positive factors: 1) On the demand side, the global installed capacity is expected to be 450-500GW, a year-on-year increase of 20%-30%, of which there is room for exceeding expectations in the domestic and non-European overseas markets, among which the domestic photovoltaic installed capacity is expected to exceed expectations this year, because from the statistics from January to November 2023, the scale of photovoltaic bidding and bidding will reach 202% of the whole year of 2022, and the growth of more than double will lay the foundation for the volume of ground power stations next year. European inventories returned to normal growth after depletion; 2) On the supply side, although the annualized production capacity of each link in 2024 is relatively sufficient, considering the delay in production (market-oriented self-regulation + tightening of financing) + delay in reaching production (slow ramp-up of new entrants), the actual supply and demand are expected to be better than the current expectations, and the diversification of technical routes + globalization of production capacity layout, and the supply side avoids homogeneous competition; 3) On the profit side, the current profit of the manufacturing side has reached the bottom, considering the high profitability of the U.S. market and the dilution of the operating rate of the dilution platform cost, the reasonable bottom profit of the integrated leader is expected to be 5-8 cents. In the past one or two years, the fierce competition within the industry is actually conducive to the leading enterprises with strong technology, strong financial strength and low product costs to further increase their market share, which is a good thing for these leading enterprises in the long run. In fact, judging from the performance of last year's annual report pre-disclosed by some leading companies recently, there has even been a year-on-year increase of more than double. Yesterday, the lithium battery leader CATL rose sharply due to the performance forecast exceeding expectations, and this phenomenon may also appear in the photovoltaic field in the future, which is worthy of our attention.
Operation strategy: As the last trading day of the first month of 2024, the market panicked again yesterday**, and the number of falling limits after excluding ST shares even exceeded the day of the sharp fall on January 22, reflecting that the current market is in an extreme situation. On the one hand, the emergence of this panic after a long-term trend often corresponds to the final stage of the trend; On the other hand, at present, based on the calendar effect, technical analysis and other dimensions, as well as with the recent introduction of various policies to stabilize growth and stabilize the market, the disturbance of performance after the conditional mandatory pre-disclosure of listed companies' annual reports has come to an end temporarily, and it is expected that the market turnaround is expected to come soon. In the long run, the "policy bottom", "economic bottom", "valuation bottom" have appeared one after another, and the third quarterly report of listed companies reflects the "performance bottom" has also initially appeared, coupled with the improvement of the capital at the beginning of the year, the market tends to appear "spring restlessness" ** In the medium term, on the one hand, the current price-earnings ratio and price-to-book ratio corresponding to the Shanghai Composite Index are at the bottom of history, that is, it has a very high medium and long-term margin of safety and investment cost performance. On the other hand, although the foundation of the current economic recovery is not yet solid, the general direction of the recovery has not changed as the monetary policy continues to be loose and measures to stabilize growth have been implemented one after another. In addition, the Fed is expected to enter a cycle of interest rate cuts this year, external liquidity will continue to show an improving trend, and the medium-term market outlook remains positive. In terms of operation, those with light positions mainly increase their positions on dips; Heavy positions are mainly patiently holding on to the stock to rise.
IFC**Mao Rui SAC Practice Number: S1130622080021).