First of all, regarding the downturn of A-shares at the beginning of 2024, a number of investment research institutions have given their judgments, and the core point is one sentence: short-term**, which is not worth worrying about.
In the eyes of institutional investors, since the second half of 2023, China's policies in real estate, currency, credit and other aspects have been greatly strengthened, and various economic data also show that China's economy is recovering steadily, and there is actually a lot of good news about A-shares.
Therefore, looking forward to the A** field in 2024, some institutions believe that there are at least two new structural investment opportunities: first, the first-class growth stocks represented by new energy and pharmaceuticals are obviously undervalued, and second, a new round of capital market policy support cycle has officially begun.
Let's talk about the first structural investment opportunity first, some investment institutions remind that in 2023, the stock price performance of growth star companies such as new energy batteries, consumption and pharmaceuticals with heavy positions in the public offering is far worse than that of the "medium and special valuation" undervalued sectors and TMT (telecommunications, media and technology) sectors.
But after a year of stock prices**, star companies in the new energy, consumer and pharmaceutical industries will also have better opportunities for value revaluation in 2024 as their profitability gradually recovers.
For example, LONGi Green Energy, CATL, and BYD, a leading new energy vehicle company, which many students have paid great attention to before, have taken the lead in starting to build a bottom in the first year of 2024.
These investment institutions remind that although this does not mean that the valuation of the entire new energy sector and the pharmaceutical sector will be fully restored, the industry leaders and high-quality companies with higher profitability and solid fundamentals will undoubtedly have greater potential. As we have said repeatedly: good companies will not be ignored by the market for a long time.
Speaking of the second structural investment opportunity, the A** field has been greatly affected by the policy, therefore, with the bottoming out of the earnings of most listed companies, as well as the re-increase of leverage and the issuance of additional treasury bonds, this actually marks that the A** field has entered the bottom range, and it is likely to be an upward trend in 2024.
For example, Soochow ** analyzes that with the gradual development of China's policy and the beginning of the decline in interest rates in Europe and the United States, China's policy efficiency will gradually increase in 2024, and the previously undervalued assets will also be gradually repaired, that is, A shares will usher in a new **.
To be precise, China's economic fundamentals have begun to recover. For example, the RMB exchange rate** reflects that this positive recovery has started, but the A** market still needs more time to correct the pricing that may have been biased before.
This requires not only corporate earnings and policy efforts to break the situation, but also to solve the problem of lack of investor confidence.
Therefore, authoritative institutions and investment analysts need to constantly remind the market: now is the short-term bottoming characteristic, A-shares are at the end of the last round of bear market, rational value investors should firmly hold the confidence of high-quality companies, do not panic too much. And, in the long run, some undervalued quality companies may be at any time.
For example, the research department of CICC made it clear that the asset allocation opportunities in the A** market in 2024 are likely to be better than those in 2023, especially with the blessing of the industry's boom recovery and dividend assets.
Analysts from China Securities Construction Investment and other institutions believe that a large number of ** companies have fallen below the net assets of A-shares, as long as there is no problem with the company's fundamentals, especially if it continues to grow profitably, then the stock price of such a company can be regarded as undervalued.
There are also some institutional investors who remind that historically, any ** opportunity can be said to fall out, and the more it falls, the closer it is to the bottom, and new opportunities will appear.
For example, the valuation benchmark of the A-share CSI 300 Index has become a clear investment due to the continuous decline. Therefore, many high-dividend funds have chosen to flow in at the end of the year and the beginning of the year, which indicates that large funds are actually optimistic about the future trend of A-shares.
Chen Guo, chief strategy officer of China Securities Construction Investment, believes that the A** field provides investors with a good opportunity for layout. For example, the broad-based index has fully reflected various pessimistic expectations, and the risk of further sharp decline in the market outlook is limited.
Of course, just a cheap valuation is not enough to support the rapid recovery of the A** market, and the repair of corporate profitability and the improvement of market incremental funds are equally important. At the same time, the policy signals needed to stabilize the real estate market and eliminate deflationary expectations are also indispensable.
In terms of specific funds, institutional investors generally believe that the northbound funds flowing into the A** market through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect are expected to increase the inflow in 2024.
According to the data cited by China Merchants**, in 2023, due to factors such as the Federal Reserve's monetary policy and the market's slower than expected economic growth in China, foreign capital in A-shares will show a trend of high and low, and the cumulative net inflow of northbound funds for the whole year will only be 43.7 billion yuan, which is a low level in the same period of the previous year.
Therefore, looking forward to 2024, the core variables affecting the flow of northbound funds will shift, which is expected to drive northbound funds to return to net inflow and become an important incremental capital in the A** market.
And behind all these trends, in essence, is the structural investment opportunities that are emerging after the A**field experience. So when will A-shares** usher in a turnaround? CITIC** reminds: With the landing of economic data and geopolitical disturbances, relevant policies will continue to increase, and over-the-counter allocation funds are expected to gradually enter the market. In mid-January, the market will usher in an important inflection point.
ws