GF strategy: “Spring restlessness” may be late and continue to adhere to the counter cycle
[Guangfa Strategy]“Spring Disturbance” May Be Late-Five Minutes On The Weekend (January Issue 1) GF Strategy Research Dai Kang, Cao Liulong ● Looking back at the history, “Spring Disturbance” has almost “revealed” in the past 10Every year, there is a wave of “spring agitation” for 1-3 months at the end of the year.
The logic lies in the marginal looseness of inter-bank liquidity during the new year, the early introduction of generalized liquidity at an early pace, institutional investors adding new positions during the assessment season, and the theme hype driven by the “two sessions.”
The probability of “Spring Fever” starting from January or February is basically half-open, and it is often separated from the most decisive main line “offensive”: it generally coincides with the strong industry when the previous market is weak, and fits the theme of the time.
● Based on the current situation, “spring agitation” still needs to “wait again” this year. We believe that the probability error of “spring agitation” in early January this year is mainly restricted by the general liquidity expectation is still difficult to improve.The ability and expectations are not high, and the annual report performance of the Main Board and GEM is not good, which leads to market risk appetite.
● Liquidity: It is difficult to extend the general liquidity expectation to improve the policy direction of “cross-border compression of general expenditures” due to overlapping pressures on cross-border capital flows.
The November settlement exchange rate has slowed down significantly, and monetary policy has yet to be significantly loosened.
Local debt issuance in advance, but the amount of debt issuance has not increased significantly. It is nothing more than a change from “Chaochaoshu” to “Chaochaoshu.” The channels of “wide currency” to “wide credit” have not yet been opened. It is difficult to predict broad liquidityImproved competitiveness.
● Institutional investors: the capacity and expectation of initial position increase are limited (1) public offering: position is not low, there are not many new funds at the end of last year, and the number of “bullets” for initial position increase is limited; (2) insurance capital: position is not very highLow, floating losses contradictions, the expected future promotion of new accounting standards, insurance capital in the market with high initial volatility, the expected increase in positions is insufficient.
● Corporate profit: Both the main board and the GEM annual report performance reports are not good. The latest announcement of the December PMI fell below the “dry line”, and the main board annual report performance forecast is not optimistic.
The GEM performance forecast will form a significant disturbance to the increase in market risk in January-(1) the supervisory layer strengthens the determination of goodwill impairment; (2) the GEM company has the incentive to reduce the goodwill and do BigBath;3) The goodwill impairment of GEM was concentrated and disclosed in mid-late January.
● Profit decline and credit limit did not significantly expand, and continued to adhere to the “counter-cyclical”. From October 7, “Water Poor, Hou Jiayin-2018 A-Share Fourth Quarter Strategy Outlook” took the lead in raising concerns about global liquidity inflection points on A sharesThe impact of “How to see the inversion of US debt spreads on A shares?”
》 Judging that the game policy has ended, the market is back to fundamentals.
We maintain our previous views.
If the market is to resist the rebound, it needs to take effect on credit expansion or have important events that increase risk appetite.
“Spring restlessness” may be late, and continue to recommend configurations: 1) profitable counter-cyclical industries (thermal power, livestock breeding, games); 2) policy counter-cyclical industries (nuclear power, 5G).
Thematic investments focus on regional coordination (Xiongan, Xinjiang).
● Core assumption risks: The economic downturn exceeds expectations, and the RMB exchange rate is expected to 四川耍耍网 appreciate.
The main body of the report last week’s strategic point of view. The changes worth watching last week are: from January to November, the industrial enterprises above designated size achieved a growth in profits11.
8%, a slower growth rate than in January-October.
In February and December, China’s official manufacturing PMI was 49.
4%, down from last month.
6 averages, below the critical point.
3. In terms of industrial product prices, the prices of rebar and cold-rolled steel all fell last week. The price of the national cement market was stable, and the price and spread of chemical products fell.
4. In terms of funds from the north, the net inflow of funds from the north to the north last week was 27.
63 trillion, a net decrease of 39 the previous week.
1.1 billion yuan.
Last week, investors generally paid attention to the 19-year A-share layout, especially the initial “spring agitation”. The core focus is: (1) What are the characteristics of the “spring agitation” market in the history of A-shares?
(2) Is there a “Spring Fever” market earlier this year?
(3) What are the main factors that affect the “spring agitation” market?
On, our views are as follows-1.
Looking back at history, the “spring agitation” used to be almost “annually”: “spring agitation” generally occurs in January or February of each year, and the most definitive mainline “offensive” situation often occurs.
(1) Through the review of the operating laws of the A-share spring market in the past ten years, we found that there is a wave of “spring agitation”-“spring agitation” within 1-3 months of each year.: At the end of the year and the beginning of the year, the economy and policies have entered a “vacuum period”, with marginal relaxation of inter-year liquidity, institutional investors developing new warehouse layouts, enthusiasm for the theme hype driven by the “two sessions”, and “learning effects” in the stock market.
(2) The probability that “Spring Disturbance” will start from January or February is basically half-open-in the “Spring Disturbance” of the past 10 years: 5 years have begun from the beginning of January (Table 1, white shading)There are 5 years from the beginning of February (end of January) (Table 1, yellow shading + gray shading).
(3) The main line of “spring agitation” each year generally coincides with the strong industry when the previous market was weak, and fits the theme clues at that time-empirical data, the market changes significantly 1-2 months before the start of “spring agitation”.The five industries leading the rise in this “darkness before dawn” coincide with the leading industries that subsequently entered the restless range; at the same time, the more important event catalysts at the end of the year will also lead the relevant industries to lead and become a transitional springThe main line of the market (Table 2).
Based on the current situation, “spring agitation” still needs to “wait again” this year: We believe that the probability of “spring agitation” in early January this year is still relatively large, mainly subject to: generalized liquidity expectations are still difficult to improve, public offerings, and insurance capital increase positionsThe capabilities and expectations are not high, and the annual report performance of the Main Board and GEM is not good.
(1) It is difficult to loosen the general liquidity in the early stage. The National Finance Conference at the end of December last year “established the idea of a tight schedule and strictly reduced general expenditures”. At the same time, the balance in November was significantly reduced, and the pressure on cross-border capital flows was also (2) The initial institutional capacity and intention to increase positions are not high-public offerings: current positions are not very low, and the scale of new additions at the end of last year is limited; insurance funds: current positions are not very low; expectations for the future promotion of new accounting standards, riskExpectations of a capital increase are not strong.
(3) Poor performance forecast for the 18-year reports of the Main Board and the GEM-Main Board: The economy has dropped significantly in the fourth quarter of last year, and the probability of repairing the annual report of the Main Board is different;Central release in late January.
From the perspective of liquidity: the cross-border capital flow pressure combined with the policy guidance of “strictly compressing general expenditures” makes it difficult to make monetary policy more accommodative.
The channels from “wide money” to “wide credit” have not yet been opened, and it is difficult to improve the generalized liquidity.
(1) Monetary policy has a “constant power”, and the current pressure on cross-border capital flows also makes it difficult to make monetary policy more obvious. The bank’s foreign exchange settlement and sales deficit in November was 124.1 billion yuan, a significant increase from 103.8 billion yuan in October.
The proposal of the National Finance Conference at the end of December last year “established the idea of a tight life and strictly reduced general expenditures.”
(2) Credit spreads are still high, and the channels of “wide currency” to “wide credit” have not yet been opened-from July 18 to the present, the credit spread (5-year AA corporate bond yield-5 year AAA corporate bondYield) continued at 1.
0% to 1.
At a high level of 1%, the credit environment has not improved.
The local debt was issued in advance, but the total debt issuance did not increase. It was nothing more than a change from “Chao San Mu Si” to “Chao Si Mu San”.
“The National People’s Congress authorizes the State Council to impose new debt limits for local governments in 20191.
39 trillion yuan. ”
We believe that this is just to advance the issuance time of local debt, but it has not increased the issuance and has limited effects.
A similar situation happened once on August 7 last year: the Politburo meeting requested that the infrastructure supplement shortfall be merged in advance (but only not significantly increased). On August 7, the Shanghai Composite Index and the infrastructure sector rose sharply, but the following daysContinued shock down.
The market has formed a “learning effect”, and it is expected that this local debt issuance in advance will hardly cause a competitive response in the market.
From the perspective of institutional investors: public funds and insurance funds have limited capacity and expectations for initial positions: (1) public offerings: positions are not low, there are not many new funds at the end of last year-from our recent roadshow feedback,Public funds are cautious about market neutrality, but because of concerns about market estimates, they have stepped short, and most investors’ positions are still not low.
In addition, the size of the IPO fund at the end of last year was limited, and the “ammunition” was insufficient.
(2) Risk capital: the position is not very low, affected by the new accounting standards, the intention to increase positions is not strong-according to the statistics of the top ten shareholders of listed companies, the remaining 18Q3 insurance funds held positions A stock market value of about 1.
1 trillion, the highest point since 17Q3; the extent of the change in most insurance funds in 18 years, if the position is changed or lightened, the floating loss will become a real loss; the new accounting standards eliminate the “Can sell financial assets” account, this isThe use of new accounting standards in insurance funds and even increase positions will circumvent the current environment with a high rate of change.
From the annual report performance forecast: in November, the profits of industrial enterprises continued to grow negatively in a single month. In December, the PMI fell below the “Dry Rong Line”. It is expected that the annual report performance forecast of the main board is not optimistic;Value pressure will increase sharply, and it will also form a clear pattern of market risk appetite.
In November, the monthly profit of industrial enterprises continued to fall to -1 every year.
8%, meanwhile, PMI also continued to fall to 49 below the “Dry Rong Line”.
4. It is expected that the profit of the main board will drop significantly in the fourth quarter.
The GEM performance notice will significantly disrupt the market sentiment in January-(1) On November 16, the Securities Regulatory Commission issued the “Accounting Regulatory Risk Tips No. 8-Goodwill Impairment”, which further strengthened the recognition of goodwill impairment;(2) GEM ‘s 15-year outbound M & A scale is the “highest peak”. In the 18-year report after a 3-year performance commitment, GEM-listed companies have a strong incentive to actively depreciate their goodwill as a BigBath when they merge low(3) We calculated the disclosure date of the GEM company’s performance forecast for the impairment of goodwill in the 17-year report, and found that GEM companies generally began to disclose the goodwill impairment notice from the middle of late January, and the end of January is the goodwill impairment notice.The highest peak revealed.
From October 7th, “Water Poor Place, Hou Jiayin—A Quarterly Strategy Outlook for A-shares”, we took the lead in raising concerns about the impact of the global liquidity inflection point on A-shares.How to see the impact of the US debt spread inversion on A shares?
》 Judging that the game policy has ended, the market is back to fundamentals.
We believe that ample interbank liquidity will help the market after the year, but more importantly, it is difficult to improve the general liquidity expectation. The current rate of return is certain. If the market needs a penetrating rebound, credit expansion is required.It is effective or there is an important event that enhances risk appetite. At present, we continue to recommend patiently waiting for the opportunity to gradually operate the space.
It is recommended to continue to configure profitable counter-cyclical industries and policy hedging counter-cyclical industries-profitable counter-cyclical industries (thermal power, livestock breeding, games) + policy counter-cyclical industries (nuclear power, 5G).
Thematic investments focus on regional coordination (Xiongan, Xinjiang).
2 Important changes last week 2.
1 Real estate demand downstream in the Meso industry: Wind30 large and medium-sized city transaction data shows that as of December 28, 2018, the real estate transaction area of 30 large and medium-sized cities has gradually decreased5.
71%, about -6 the previous week.
30% increased, real estate transaction area of 30 large and medium-sized cities increased by 10 month-on-month.
96%, a year-on-year increase of 4%.
73%, up 20 from the previous week.
Cars: According to the data of the China Federation of Passenger Transport Associations, the retail sales of passenger cars in the third week of December dropped by 36%, and about -28% in the previous week decreased.
Midstream steel manufacturing: Rebar price index fell 1 last week.
84% to 3959 yuan / ton, the cold rolled price index fell 0.
79% to 4,309 yuan / ton.
Last week’s total steel stocks rose by 0.
97% to 797.
57, rebar social inventory increased by 4.
81% to 314.
91 tons, cold rolled stocks fell by 1.
24% to 107.
Last week’s steel gross profit fell, and rebar fell by 3.
04% to 1191.
39 yuan / ton, cold rolling rose 0.
21% to 1191.
87 yuan / ton.
As of December 28, the rebar futures closed at 3,404 yuan / ton, down 2 from the previous week.
According to the data of Iron and Steel Network, the average daily output of crude steel by key steel enterprises in mid-December was 183.
68 digits, down by 1 from the beginning of December.
Cement: The price of the national cement market was stable last week.
National high standard 42.
5 The average price of cement remained unchanged at 463.
5 yuan / ton.
The average price in East China remained unchanged at 552.
86 yuan / ton, the central and southern regions remain unchanged at 505.
83 yuan / ton, North China remained unchanged at 431.
0 yuan / ton.
Chemicals: Chemical products prices and spreads have fallen.
Domestic urea rose by 0.
51% to 1960.
00 yuan / ton, light soda ash (East China) fell 1.
71% to 1975.
00 yuan / ton, PVC (acetylene method) fell by 277% to 6,664.
14 yuan / ton, polyester filament (POY) fell 5.
19% to 8342.
86 yuan / ton, styrene-butadiene rubber fell by 1.
23% to 11,757.
14 yuan / ton, pure MDI fell by 1.
02% to 20850.
00 yuan / ton, the international chemical prices, international ethylene rose 0.
70% to 825.
29 US dollars / ton, international pure benzene fell 6.
30% to 525.
07 US dollars / ton, international urea fell 3.
70% to 253.
00 USD / ton.
Upstream resources coal and iron ore: iron ore prices fell last week, iron ore stocks fell, coal prices fell, and coal stocks fell.
The average domestic iron ore price rose by 0.
73% to 602.
55 yuan / ton, Taiyuan Gujiao car plate price including tax stabilized at 1800.
00 yuan / ton, Qinhuangdao Shanxi mixed outstanding liquidation 5500 prices fell 2 last week.
57% to 597.
80 yuan / ton; in terms of inventory, Qinhuangdao coal inventory decreased by 6 last week.
31% to 572.
In April, the port iron ore inventory increased by 1.
95% to 14156.
International Bulk: WTI rose 4 last week.
85% to 47.
At $ 59 / barrel, Brent rose 0.
27% to 52.
At $ 80 / barrel, the LME metal price index fell 0.
76% to 2809.
30. The commodity CRB index fell 0 last week.
63% to 171.
05; BDI index fell 3 last week.
57% to 1271.
2 Stock market characteristics Stock market fluctuations: The Shanghai Composite Index fell 0 last week.
99%, the top three gains in the industry are communications (2.
48%), food and beverage (1.
94%) and leisure services (1.
36%); the last three gains were steel (-3.
17%), the media (-3.
29%) and mining (-3.
Dynamic estimation: The total PE (TTM) of A shares last week from the previous week.
10 times down to 12 last week.
98 times, PB (LF) 1 from the previous week.
40 times down to 1 last week.
39 times; A shares excluding the financial services industry PE (TTM) as a whole from the previous week18.
13 times down to 17 last week.
91 times, PB (LF) 1 from the previous week.
72 times down to 1 last week.
70 times; GEM PE (TTM) 42 from the previous week.
38 times down to 41 last week.
85 times, PB (LF) from the previous week 2.
66 times down to 2 last week.
62 times; small and medium plate PE (TTM) from the previous week 23.
87 times down to 23 last week.
53 times PB (LF) from the previous week 2.
15 times down to 2 last week.
12 times; the total market value of A shares has fallen by 0 from the previous week.
90%; the total market value of the financial services industry, excluding A shares, fell by 1 from the previous week.
20%; required consumption relative to the relative PB of cyclical listed companies from the previous week1.
62 times down to 1 last week.
94 times; relative PE (TTM) of ChiNext to CSI 300 from the previous week4.
16 times rose to 4 last week.
13 times; relative PB (LF) of ChiNext to CSI 300 since the previous week 2.
17 times rose to 2 last week.
16 times; last week’s equity risk premium was 2 from the previous week.
20% rose to 2 last week.
35%, stock market returns from the previous week 5.
52% rose to 5 last week.
Fund size: The share of new equity + hybrid funds last week was 57.
2.7 billion copies, up from 20 the previous week.
4.1 billion shares; last week the fund market maximized a net reduction of 375.
49 billion copies.
Balance of margin financing and securities lending: As of Thursday, December 27, the balance of margin financing and securities lending was 7,665.
98 billion, down by 0 compared with the previous week.
New A-share account openings: According to data from Zhongdeng, the number of new investors for the week ended 21 December.
30,000, 21 in the previous week.
Restrictions on restricted shares: 744 restrictions were lifted last week.
07 billion, 1196 is expected to be lifted next week.
Non-reduction in size: Last week, the overall size of A shares was reduced by 40.
6.8 billion, the industry with the most reductions last week is the bank (-7.
6.9 billion), electronics (-6.
48 billion), machinery and equipment (-6.
4.2 billion), the industry that increased the most last week is light manufacturing (2.
38 billion), transportation (1.
1.7 billion), National Defense Industry (1.
Funds from the North: Last week, the net inflow of funds from the Northbound Stock Connect to the North was 27.
63 trillion, a net decrease of 39 the previous week.
1.1 billion yuan.
AH premium index: The A / H share premium index dropped to 118 last week.
95, the A / H share premium index for the previous week was 117.
3 Liquidity At the end of December 29th, 11 reverse repurchases were issued, accumulating USD 730 billion; 5 reverse repurchases expired, totaling USD 490 billion; open market operations (including treasury cash) were USD 240 billion.
As of December 28, 2018, R007 was up 21 last week.
68BP to 4.
83%, SHIB0R overnight interest rate fell by 10.
16BP to 1.
470%; the direct interest rates of the Yangtze River Delta and the Pearl River Delta increased last week, and the Yangtze River Delta rose by 10BP to 3.
00%, the PRD rose by 10BP to 3.
05%; term spread rose 2 last week.
98BP to 0.
63%; credit spreads rose 2.
98BP to 1.
4Overseas United States: December supplementary chamber of commerce consumer confidence index of 128 announced on Friday.
1, lower than expected 133.
7, lower than the previous value of 135.
Japan: Friday announced December Tokyo CPI (except fresh food) 0 every year.
9%, which is the same as expected and lower than the previous value of 0.
9%; announced unemployment rate for November 2.
5%, lower than expected 2.
4%, lower than the previous value of 2.
4%; announced job hunting ratio in November of 1.
63, unchanged from the expected value, higher than the previous value of 1.
62; announced that the initial value of industrial output in November was -1.
1%, higher than expected -1.
5%, lower than the previous value of 2.
Overseas stock markets: The S & P 500 rose 2 last week.
86% closed at 2485.
74 points; London’s FTSE fell 0.
19% closed at 6,733.
97 points; German DAX fell 0.
70% closed at 10558.
96 points; Nikkei 225 fell 0.
75% closed at 20014.
77 points; Hang Seng fell 0.
97% closed at 25504.
2.5 Macro-industrial enterprise profits: From January to November, the total profits of industrial enterprises above designated size reached 61,168.
Eight ten percent, an increase of 11 per year.
In November, industrial enterprises above designated size achieved a maximum profit of 5,947.
500 million, down by 1 every year.
8%, a growth rate of 5 than in October.
December PMI: China’s official manufacturing PMI was 49.
4%, down from last month.
The 6 averages are below the threshold, and the manufacturing boom has eased; China’s non-manufacturing PMI is 53.
8%, an increase of 0 from the previous month.
The four best indicate that the expansion of non-manufacturing industries has accelerated.
3List of data to be announced next week Highlights next week: China ‘s December official manufacturing PMI, China ‘s December Caixin manufacturing PMI; US December Markit ‘s final PMI value, US ‘s unemployment rate in December; Eurozone ‘s December manufacturing industryFinal PMI; UK manufacturing PMI in December; Japanese manufacturing PMI in December.
Monday, December 31: China announces December official manufacturing PMI; Wednesday, January 2: China announces December Caixin manufacturing PMI; United States announces December Markit manufacturing PMI final value; Euro zone announces December manufacturing PMIFinal value; UK announces manufacturing PMI for December; Thursday, January 3: US announces changes in ADP employment in December (10,000 people); US announces December ISM manufacturing index; Friday, January 4: US announces 12Monthly unemployment rate; changes in non-agricultural employment in the United States in December (10,000 people); the growth rate of the national house price index in December announced by the United Kingdom; the national house price index in December announced by the United Kingdom;.
Risk Warning: Economic Downturn Exceeds Expectations, Expected Appreciation of RMB Exchange Rate