Text | Financial Street Old Lee
It is most appropriate to describe A shares as "nothing new under the sun".
In the first week of the new year, A shares ushered in the "opening of the door black", the three major indexes all closed down, the Shanghai Composite Index fell by 1.66%, the Shenzhen Component Index fell by 3.46%, and the ChiNext Board fell by 6.8%, creating the largest single-week decline in nearly a year. In fact, from the policy of the Central Economic Conference on December 10, the new energy sector of A shares has been in a slump, with the leading stock Ningde era retracing nearly 15%, BYD retracing more than 18%, and other constituent stocks with greater drawdowns.
Weekend, whether it is the market trend or the news surface, there is no sign of warming, last Friday night, a head brokerage held an institutional conference call, the original dozens of people to participate in the conference call only a dozen people attended, everyone's enthusiasm dropped to the freezing point, the meeting opened for half an hour on the hasty end, in the words of the partner to describe, in the A share for more than ten years, has never encountered such a poor start.
The more difficult the market, the more need to study, today, Lao Li and everyone to chat together, in the past month, why has the new energy sector been falling? What kind of style switch is the market going through back then? In 2022, when will the new energy sector reverse?
The better the boom, the faster it falls?
New energy is the current sector with the best prosperity, the best fundamentals and the fastest decline.
We briefly review the performance of the new energy sector in the past month, as early as before the Central Economic Work Conference, many institutions realized in advance that stabilizing the economy will be the next focus, the market has appeared a collective correction of growth stocks, when the new energy sector fell sharply on the hot search, before the end of the year, many institutions because of the year-end ranking has not been adjusted, the new energy sector has declined, but the amplitude is not large, into January, the market opened a fierce game.
In the first week of the new year, the game was the most intense, and the scope of the pullback was extended from the new energy sector to the high-prosperity tracks such as chips, military industry, and CRO with a high market boom in 2021, while the banking, insurance, real estate and other sectors that performed poorly last year rebounded, and the companies represented by Ping An, China National Heavy Duty Truck, China Railway Construction, and Midea Group rose sharply.
In the past month, it is difficult to get an answer by analyzing the market trend of the past month from a microscopic perspective, because whether it is external liquidity or industry prosperity, the new energy sector has no reason to fall. In December, the new energy vehicle sector even handed over the best answer sheet. A share researchers are diligent, the first week of the year, the market released more signals, about the reasons for the market changes in the past month, we have initially formed a consensus, this market adjustment to be analyzed from a macro perspective.
Here first of all, the conclusion is that since December 10, the adjustment of the A-share new energy sector is not from the change in the prosperity of the new energy itself (micro perspective), but because the change in the relative prosperity of the whole market (macro perspective) is the comprehensive PK of the "track"-type company and the "defensive" company represented by the new energy, and the winner has not yet been divided.
Let's first talk about the prosperity of the new energy sector, the past month the market is predicting the industrial performance of the new energy sector next year, the market agrees that next year's new energy vehicle industry boom is still very good, but the growth rate is difficult to reach this year's level, especially the leading enterprise Ningde era, BYD is difficult to achieve a growth rate of 30%-50%.
Relative to the prosperity of new energy, the prosperity of other sectors has more advantages, due to the economic work conference proposed "steady growth", in the case of relatively loose liquidity, banking, insurance, real estate and consumption and other "defensive" companies may appear relative to the "new energy vehicles" sector better growth indicators, coupled with the low valuation of these sectors, the past week rebounded significantly.
Although the market is switching, everyone is still divided on the future prosperity changes of "track" companies and "defensive" companies: the institutions that hold the new energy sector have partially adjusted their positions to defensive companies after the beginning of the New Year, and some have begun to hold the currency and wait and see, and the institutions holding the "defensive" company believe that the new energy vehicle sector still has a better performance this year, some have bought the "track", and some have begun to hold the currency.
Careful friends will find that although the market has fallen sharply since the New Year, the trading volume has been amplifying, essentially buying and selling orders are taking orders from each other, and what can really determine the market trend will depend on this group of "holding coins and waiting" people.
Old Li has always said that the domestic market is not a market for value investment, many friends outside the industry said that from a narrow point of view, the new energy sector is a growth stock, the stock price should always rise, but the rules of the game of the market is so cruel, from the perspective of the absolute prosperity of the long-term line, banking, insurance, real estate and consumption are far less than the new energy sector, but from the perspective of short-term relative prosperity, banking, insurance, real estate and consumption should be dominant.
New energy is not an isolated paradise, everyone is thinking of making money at high growth, good companies in the face of market adjustment, performance is worthless, therefore, grasp the market style switch has become particularly important.
Will the market style really switch?
In the past decade, the average annual growth rate of Wonderland A is about 10%, that is to say, if we deposit money in the bank or buy a wide-based index fund, the annual yield can be maintained at 5%-10%, which is basically the growth rate of social finance, but this income can not meet everyone's expectations, the stock market and partial stock funds are everyone's first choice.
Experienced friends in the market know that after 2019, the domestic market can be called a "structural" bull market, from value stocks to growth stocks, from small market value to large market value, from plate A to plate B, every year there will be a main tone of the market style and plate. If you can grasp the main tone of the market every year, there is a high probability that there will be more than 20% of the income, such as semiconductors in 2019, pharmaceutical consumption in 2020, new energy in 2021 and so on.
From the end of last year to the present, researchers are exploring what is the main tone of the market in 2022? Overall, the market style may usher in three switching:
The first is the switching of the degree of prosperity between plates. The switching of prosperity depends on the development situation of the industry, which plate remembers that the prosperity is good, and where the funds will go. In the first week of the year, money flowed from "track" companies to "defensive" companies. Years ago, everyone wanted to ensure performance and ensure rankings, so the motivation for institutional position adjustment and switching was not strong, and the position adjustment that originally belonged to the years ago was concentrated in the years after, because the "track-type" company had a relatively high weight in the main A-share index and the institutional allocation was concentrated, so after the institutional position adjustment, the index had a larger retracement and the market loss effect was stronger. As mentioned in the main text, the current market switch has only started for one week, and there is still a big disagreement, whether the "defensive" enterprises rebound or the monthly reversal will be determined by the performance of the week.
The second is the switching of valuation between enterprises. After 2019, A shares have experienced three consecutive yangs, and in early 2022, the institutions are obviously "afraid of high", and the PE valuation of the "defensive" companies that rose high last week is basically below 20, while the valuation of the "track-type" companies with growth logic is basically more than 30 times, which is obviously a lot more expensive. Recent economic work conferences, Fed rate hikes and the performance of high-valuation companies are catalysts for valuation shifts.
First, the tone of the work conference "steady growth" is good for the real estate chain and infrastructure chain, and the company's relative cost performance after the industry is expected to improve; second, due to the Fed's December meeting minutes "letting go", everyone is worried that the domestic liquidity preference will also rise, coupled with the market's expectation of "incremental funds", that is, the issuance of new funds is weak, which aggravates the switchover, third, the "track-type" industry has a large increase in the early stage, the demand for capital profits is large, and the "performance vacuum period" is superimposed. Fundamentals in high-growth industries are difficult to support high valuations.
The third is the switch between the company's market capitalization, that is, the switch between large market capitalization companies and small market capitalization companies. There is no clear boundary for the switching of large and small market value, in 2021, the valuation of the new energy market chain is too high, the prosperity of the real estate industry chain is not good, consumer medicine has been turbulent, and when the large market value plate lacks the main line logic, the small market value company will have intermittent opportunities. Therefore, in individual quarters and months last year, the market value of many small market capitalization companies has exploded intermittently, and in 2022, the more the market diverges, the more we must pay attention to small market capitalization companies.
In the five trading days of the first week of this year, these three styles of switching have appeared in the market, but everyone must also judge which is the main tone of the follow-up market according to the market performance of this week.
In 2022, how will the new energy sector go?
Many friends asked Lao Li how to adjust in the near future, and is it still worth following in 2022 for new energy vehicles? Old Li now also has no answer, many institutions also have no answer, the more in the market messy, the more to maintain patience, old Li's strategy is to tighten the position, real-time observation, wait for the opportunity.
The two most important things in investment are "vote selection" and "timing", "vote selection" is to judge whether the new energy sector has opportunities from the market structure, "timing" is to judge when the new energy sector has opportunities, "vote selection" and "timing" depend on two points: one is the change in the prosperity of the new energy vehicle plate itself, and the other is the change in the prosperity of other plates.
The core divergence of the current market is still the prosperity, some institutions sold the "track-type" companies represented by the new energy sector, bought other "defensive" companies with better prosperity, resulting in a sharp decline in the new energy sector; other institutions that originally held "defensive" companies, felt that the prosperity of the new energy sector in 2022 was still relatively dominant, they threw away the "defensive" plate, bought the new energy plate at a low price, although the new energy plate fell significantly, and the "track-type" company was in a short-term headwind. But it is not yet possible to fully determine that the market has turned to defensive companies, more people are in a "currency-holding" state, and the development trend of the market depends on the votes of middlemen.
In general, the "track-type" company is not so bad, the "defensive" company is a short-term tailwind, not so good, the "defensive" company in the "steady growth" main line of short-term is the most worthy of attention, including real estate and its industrial chain and new and old infrastructure two main lines, real estate and its industrial chain involves real estate enterprises (real estate central enterprises), building materials (glass / waterproof / steel structure), home appliances (white electricity), etc.; new infrastructure to grasp the power grid, rail equipment, etc., traditional infrastructure to grasp construction machinery, cement, etc., Lao Li believes, There are two kinds of movements that the market may follow:
The first trend is that the new energy sector stabilized or rebounded a few years ago, then the market wind direction will soon return to the new energy sector, frankly speaking, the probability of this trend is extremely small.
The second trend is that the new energy sector is still pulling its crotch in January, and the performance of "defensive" companies is strong, which means that the centrists have chosen "defense", and the market is likely to be "defensive" style in the first quarter.
Even if the market ushers in a "defensive" style, it will not be a year-round market, because the "defensive" company is only short-term in the context of marginal increase in funds, on the basis of cheap valuation, the cost performance improvement brought about by the marginal improvement of policy has maintained a relatively strong prosperity.
The biggest problem of these companies is that the fundamentals are not good, and the current performance is only expected to improve, or not improved, so near the intensive disclosure period of the annual report and the quarterly report, when the market focuses on performance, the "defensive" industry has accumulated a part of the increase in valuation repair, and there is also a risk of profit cash, and the market will cut back to the "track" company at that time.
Therefore, in such a context, in the first quarter, everyone should always pay attention to these three main lines:
The first is the main line of stable growth, which is the current policy vane, and the macro policy "steady growth" tone is strongly related to infrastructure, building materials, power grid investment, central enterprise real estate and its industrial chain and home appliance industry.
The second is the main line of high growth, with new energy vehicles as the most typical, the recent high-growth pullback represented by new energy vehicles, photovoltaics, military industry, etc. is larger, the valuation has gradually entered a reasonable range, and the current adjustment is also creating space for future growth.
The third is the main line of consumer medicine, these companies are earlier than the adjustment of new energy, the recent consumption represented by liquor and the overall adjustment of medicine represented by CXO are larger, as a long-term better performing industry, it can be laid out at a low price.
Looking forward to the first quarter, the macro environment "loose inside and tight outside", will form a certain suppression of A shares, but overall, A shares in the general trend is in the "bottom building" stage, the next market is to continue to build the bottom or the second time to explore and then build the bottom, still need us to wait patiently, from the half year point of view, because many company fundamentals have not changed, A shares are still optimistic, when the main line of the market is not clear, waiting is the most important.