The Paper's trainee reporter Sun Yan
【Editor's Note】
2021 is an extraordinary year, behind the ups and downs of the A-share market, the traditional white horse stocks represented by the "Mao Index" have fallen silent, and the "Ning Combination" industrial chain has sprung up.
Entering a new 2022, how will the capital market interpret it? Recently, the surging news (www.thepaper.cn) reporter interviewed a number of securities companies chief strategist, chief economist, star fund manager, the pulse of the new main line of investment, tap new market opportunities, look forward to the new trend of the market.
This issue features an interview with Liu Chenming, chief strategist at Tianfeng Securities.
Liu Chenming, chief strategist of Tianfeng Securities
Looking forward to the A-share market in 2022, Liu Chenming believes that 2022 is a year of steady growth. Steady growth will lead to credit expansion, which also means that the remaining liquidity will increase and support the overall valuation.
Liu Chenming said that 2021 is a year of fierce differentiation, and the performance of the two sectors of new energy and old cycle is very good, while the performance of other sectors is relatively poor. However, 2022 is a year of steady growth, and the corresponding undervalued sectors may have a stage performance. At the same time, the prosperity of high-end manufacturing and other tracks is still very high, and there will be rotation opportunities in several types of plates.
In terms of configuration, Liu Chenming is mainly optimistic about the relatively fast absolute level of growth, but the decline is not large, or it is still accelerating. The first is the core direction represented by the automotive chain, such as automotive electronics, automotive intelligence, auto parts, vehicles, etc. The second is other high-end manufacturing directions, such as military industry and new energy operators, including energy storage. The third is the direction that can be reversed without relying on policies, typical such as mandatory foods, pork, etc.
The following is the transcript of the dialogue between The Paper and Liu Chenming (slightly edited):
The Paper: In 2021, the money-making effect of the A-share market has narrowed, how do you think about this phenomenon?
Liu Chenming: The macroeconomic policy in 2021 provides a background similar to deleveraging, so we see the overall credit contraction and the acceleration of social financing, which leads to a continuous decline in the remaining liquidity of the entire market. Correspondingly, in addition to a few extremely high boom directions, the A-share market as a whole has entered the stage of killing valuations. This is the main reason for the poor money-making effect in 2021.
On the other hand, the 2021 policy is more stringent for the supervision of some industries, represented by anti-monopoly, which has a greater impact on the corresponding industries. Of course, the reason for the impact is also because the valuation of the corresponding industries is high, such as the consumer industry and the Internet industry in February 2021, the valuation is at a high position, and the adverse information at the industry level may form a large negative drag on the corresponding stocks.
Overall, it was the credit contraction that led to a decline in residual liquidity and the suppression of valuations; structurally, unfavorable policies had an impact on several important industries, but mainly because of higher valuations.
The Paper: China's absorption of foreign capital continues to maintain a good growth trend in 2021, how do you view the current willingness of foreign investment in the Chinese market?
Liu Chenming: 2017 is the first year of foreign capital inflows. It can be seen that since 2017, the proportion of foreign capital in the circulating market value of A-shares, including northbound funds and QFII, has been going up with an almost unchanged slope.
In other words, the direction in which global funds reallocate Chinese assets is unchanged. There may be a phased impact on global risk appetite, etc., and there may also be a phased outflow, but the overall inflow trend remains unchanged. Therefore, from the top down, foreign capital is still flowing into A shares.
Looking ahead, from a historical perspective, msci's process of including stocks in Taiwan, South Korea and other places in the index will take about 5-8 years. During this time period, foreign investors usually continue to reallocate stocks in these regions. So I think the trend of foreign capital inflows into A shares is far from over, because the proportion of MSCI included in A shares is only 20% now, and there is still a long way to go from 100%, and in this process it should be the trend of inflows.
The Paper: How do you view the structural market in 2021, do you think this situation will continue into 2022? Why?
Liu Chenming: From the perspective of plates, 2021 is a year of fierce differentiation, and the performance of the two plates of new energy and old cycle is very good, while the performance of other plates is relatively poor.
But the plate differentiation in 2022 is relatively unlikely to be as dramatic. On the one hand, the high valuation of white horse stocks has been digested for one year, and there may be stage opportunities for white horse stocks in 2022. On the other hand, 2021 is a year of comprehensive deleveraging and suppression of real estate and infrastructure, but 2022 is a year of steady growth, and the corresponding low-value sector may have a phased performance. At the same time, the boom of high-end manufacturing and other tracks is still very high, and I think there will be rotation opportunities in several types of plates, and they will no longer be as differentiated as in 2021.
Of course, the differentiation at the individual stock level will still be relatively large. In many industries, leading companies have risen much and their valuations are expensive, but some small and medium-sized companies have just increased their penetration rate, or have just entered the industry, and their valuations have a higher space for improvement and cost performance. I think there may continue to be a divergence within the industry.
The Paper: In 2021, the white horse stocks such as consumption and medicine that were previously optimistic about foreign investment have rebounded sharply, what do you think is the main reason?
Liu Chenming: From the perspective of historical experience and data review, the performance of the white horse leader represented by liquor, consumption and medicine is relatively strong, and the future rise and fall depends to a large extent on the valuation level.
That is, these industries will not explode, but they will not be too bad. Because of its strong stability, there will be a fluctuation range in the valuation. If you buy when the valuation is extremely cheap, the future rate of return will be high; conversely, if you buy when the valuation is extremely expensive, the future return may be low.
Judging from our valuation model, these white horses are extremely expensive in February 2021, so the performance behind them is very general. But in April 2020 and the end of 2018, these white horses belonged to the time when valuations were extremely cheap, so the follow-up performance was very good. The poor performance of these big white horses in 2021 is that I think an important reason is that their valuation at the Spring Festival of 2021 is extremely expensive. In addition, the industrial and policy levels have also caused varying degrees of impact.
The Paper: The Central Economic Work Conference first proposed the full implementation of the stock issuance registration system, what changes do you think will bring to the A-share market as a whole?
Liu Chenming: On the one hand, for small and medium-sized stocks, I think the supply of new stocks will increase, the valuation of many small and medium-sized stocks may be further differentiated, and small and medium-sized stocks may be further carefully selected. In addition, many small and medium-sized stocks will face financial or valuation pressures.
On the other hand, I think that the full implementation of the registration system may bring some new opportunities. In recent years, policies and markets have encouraged "specialization and specialization" to support the listing and financing of these companies that make up for shortcomings and forge long boards. In the future, if there are more "specialized and special new" new shares issued, I think it can bring more investment opportunities to the A-share market.
There may be a situation in the A-share market: these "specialized and new" small and medium-sized enterprises will gradually grow up, but also bring investors the opportunity to make money, and this virtuous circle may spiral upwards.
The Paper: Looking forward to 2022, what kind of market do you think A-shares will roughly go out of? Why?
Liu Chenming: We just mentioned that 2021 is a year of deleveraging, and the overall market performance is relatively general; but 2022 is a year of steady growth, stable growth means credit expansion, credit expansion means surplus liquidity improvement, and it also means that the overall valuation is supported. Overall, the overall market in 2022 should not be too bad.
From the specific market rhythm, we believe that the next six months is a stage of credit expansion, but profit decline, and there may be range fluctuations at the index level. For example, the Spring Festival may rise from winter to winter, but it may pull back in the second quarter. Therefore, the next half year may be dominated by range shocks, and the performance of the middle year may drop to a low point.
At the same time, credit may still be expanding, so looking forward to the third quarter of 2022, there may be a synchronous recovery of credit and profits, and then superimpose the valuation digestion of about half a year, we tend to believe that there may be a wave of index-level upward opportunities from mid-to-third quarter of 2022.
As for the fourth quarter of 2022, it may depend on the extent to which credit continues to expand. We now basically judge that the second and third quarters of 2022 are the main credit expansion stages, and the fourth quarter has yet to be observed. If credit cannot be further expanded, it may become a stage of shock again.
The Paper: Looking forward to 2022, which industries and directions are you specifically optimistic about? Why?
Liu Chenming: In the large industries and direction types, we are mainly optimistic about industries where the absolute level of growth is relatively fast, but the decline is not large, or the direction that is still accelerating. Specifically, the absolute growth rate of the industry is above 30%, and the growth rate is no more than 50% lower than that of 2021, or maintain a relatively high growth rate, or even continue the direction of high growth.
In this kind of direction, first, we are optimistic about the core direction represented by the automotive chain, such as automotive electronics, automotive intelligence, auto parts, vehicles, etc. The second is other high-end manufacturing directions, such as military industry and new energy operators, including energy storage. Third, we are also optimistic about the direction of the dilemma reversal, and it is not dependent on the policy to be able to reverse the direction of the dilemma, typical such as mandatory food, pork and so on.
The Paper: What advice do you have for investors on the A-share market in 2022?
Liu Chenming: We say that in 2021, investors can lie and win in the direction of new energy. Before 2020 and 2020, everyone can lie down and win in the direction of liquor, consumption, medicine and so on. We feel that 2022 may be more of a year that needs to be dug from the bottom up, and it is difficult to lie in the big direction.
Specifically, there may be more opportunities for many small and medium-sized stocks. However, for personal investment, it is difficult to excavate. Therefore, if you are optimistic about some growth directions, it is recommended that you buy funds in the corresponding direction, and you may get higher returns.
Responsible Editor: Yes Dong Dong Photo Editor: Jin Jie
Proofreader: Yan Zhang
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