Key takeaways:
Overseas:Against the backdrop of the ongoing geopolitical conflict between Russia and Ukraine and Palestine and Israel, global economic turmoil continues to increase. Although 2024 energy** tends to be more stable, butEven if the U.S. cuts interest rates by 125bp in 2024, the inversion of the interest rate gap between China and the United States is still not over, and the positive external factors are still unclear; Similar to H2 in 2008, the current real estate stall has a negative impact on the first half of 2024 to reach a high point, and A-shares are expected to form the fifth historical bottom in the last 20 years (the first four times are) in the process of clearing the bubble in 2024, and the real opportunity is about to appear.
Domestic Chapter:Under the constraints of the intensifying tension in the external environment and the main contradictions such as insufficient demand and sluggish expectations in the internal economy, the domestic economy continues to show a weak recovery pattern. Looking ahead, the policy of "promoting stability with progress, first establishing and then breaking" reflects the increased demand for "effective qualitative improvement" of the economy in 2024, and the economic growth target will not be too low. In the context of the end of consumption "filling the pit" and the lack of economic growth, the investment focusing on the "three major projects" at the beginning of the year is expected to make efforts to "take the lead" and promote each other with consumption to form a dual-engine pattern. Real estate and foreign investment are the two major uncertainties during the year, we believe that the transition to a new development model will be accelerated, and the growth rate will continue to decline but a stable landing can be expected; In terms of foreign investment, with the easing of the inversion of the interest rate differential between China and the United States, it is expected to turn from outflow to inflow. In summary, it is expected that the economy will recover steadily in 2024, and it is expected to recover to the potential growth rate by the end of the year, with a year-on-year GDP growth of 50% or so.
Track:New energy, semiconductors, TMT, and high-end equipment manufacturing have become new drivers of China's economic growthThe AI-led technological revolution is the core driver of economic transformation. Under the goal of achieving net-zero carbon emissions by 2050, the new energy track is expected to rebound: the new installed capacity of wind power and photovoltaic is broad, the overseas photovoltaic market is expected to recover, and perovskite and 0bb accelerate technological innovation; The penetration rate of new energy vehicles will exceed 40% in November 2023, 4680 batteries and solid-state batteries will accelerate the innovation of power batteries, intelligent electrification, and intelligent cockpit and high-end assisted driving will be fully implemented. Data elements are poised to go, the demand for computing power continues to increase, AI application advertising design, machine vision, empowering the game industry to reduce costs and increase efficiency, enriching literary and artistic creation, empowering smart medical education, short dramas are vibrating at home and abroad, and upstream optoelectronics and glass through-hole technology are ushering in a huge market space under the AI trend. The recovery of the consumer market is on the way, sugar-free tea drinks have started to grow in segmentation, and the pet food and health retail markets have track advantages; The major track of medical science and technology, such as orthopedic devices, ophthalmic services, and innovative drugs, ushered in demand recovery. Under the surge of global geopolitical conflicts, it is imperative to upgrade national defense and military equipment, and the fifth-generation stealth fighter, intelligent ammunition industry chain, and ground armament industry chain have ushered in a period of scientific and technological explosion.
Key takeaways:
Last week (122-1.26) Since the beginning of '24, the world's major Treasury yields have generally ushered in**. U.S. Treasury 10Y from the low** about 35bp, U.S. Treasury 2Y about 20bp, German Bond 10Y about 40bp, Japanese Bond 10Y about 15bp, the major developed economies in the same period ** continued to rise, combined with the adjustment characteristics of the cycle accompanied by easing expectations, the downward trend of short-term overseas yields has slowed down, and the U.S.-China interest rate spread has widened againThere may be a difference in the expectation of further depreciation of the renminbi.
Domestically, under the pressure of sluggish aggregate demand, aggregate and structural policies have continued to be released, top-level documents for opening up to the outside world have been continuously introduced, and the subject matter of the free trade zone and free trade port has heated up. We believe that before the domestic price index shows signs of stability and improvement, it is not easy to quickly switch the allocation styleShort-term debt targets are accompanied by 1) the bottom of the debt rises 2) the underlying stock overfalls and repairs 3) the downward revision of some targets has more room for the gameIt will still play an important role in the general configurationIt is still recommended to allocate low-priced convertible bonds with good elasticity of the underlying stock.
In terms of subject matter, you may be able to think about the left side around "reflation".Under the demand for price stabilization, the "imported inflation" brought about by the two-way fluctuation of the RMB has formed a positive exchange rate for enterprises with a relatively high proportion of overseas revenue, and the large scale and the logic of the over-falling repair of the underlying stock are worth paying attention to; Internally, we can pay attention to the follow-up deduction of the "price forward" logic of public utilities, and it is worth paying attention to the Ran 23 convertible bonds and blue sky convertible bonds with strong ability to keep up.
From the product **China's key overseas industries can be divided into two categories:One is that it has already dominated the international competition and the added value of production is also high；The other category is not yet in the lead in international competition, butDevelopment prospects and policy support can be expected, its share of world exports is on the rise. The traditional advantageous industries in China's commodities are textiles and apparel, power equipment and coal, which occupy a considerable share of global exports and are in a leading position in the global value chain. China's emerging industries, including medicine and biology, basic chemicals, machinery and equipment and automobiles, are becoming more and more important in global exports, and the proportion of added value of the industry also has a large room for improvement.
From the point of view of the service,Traditional advantageous industries and emerging industries can also be screened out. The traditional advantageous industry in China's service industry is the construction service industry. From the perspective of emerging industries,China's transportation services, as well as communications, computer and information services are expected to become the next round of growth points. China's sea, land and air transport have occupied an important share in the international market, and the global transportation network has been deepening. In communications, computer and information services, China has always maintained a surplus, becoming the largest surplus of knowledge-intensive services.
Based on the global input-output table, this paper constructs the industry prosperity transmission index. The study foundDeveloped markets such as the United States, South Korea, Japan, and Singapore, as well as emerging markets such as Vietnam, Cambodia, and Mexico, have become the main overseas driving force for China's industry boom, and the differences in different industries, can be summarized as: sub-regions and markets: Asia, North America, Europe, ASEAN, the United States, Japan and South Korea, Mexico, and Rui Deying; In terms of industries, services and high-end industries are oriented to the United States, Japan and South Korea, while traditional industries and manufacturing industries are oriented to ASEAN. From the perspective of time trend, the importance of ASEAN countries continues to rise, the importance of the United States continues to decrease, South Korea and Japan have always been close parties to the development of China's industry, which shows that China is gradually expanding the Asia-Pacific as the core of the global economic and trade circle.