Per reporter: Liu Mingtao Per editor: Peng Shuiping
The differentiation of Chinese concept stocks intensified, and each brand 100 index had no choice but to retreat 800 points.
A shares rose first this week and then declined, the Shanghai index fell 1.08% weekly, the ChiNext index fell 1.6% weekly, under the influence of the Hang Seng Index and U.S. stocks continued to hit a new low, each brand 100 index fell 3.8% weekly, closing at 802 points, its overall valuation has fallen to 8.6 times, the valuation level broke "9" for the first time in history, the value is significantly undervalued, and the allocation cost performance is highlighted.
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The index has been pulling back continuously
This week, the buyback and increase in holdings have increased, boosting market confidence, and the index continued to fluctuate upward at the beginning of the week, and the Shanghai index approached 3100 points, but the lack of volume and the pressure of northbound capital outflow gradually fell back. From the weekly K-line perspective, the Shanghai Composite Index fell by 1.08%, the Shenzhen Component Index fell by 1.82%, the ChiNext Index fell by 1.6%, and the Everyi Brand 100 Index expanded its decline under the sharp decline of Chinese concept stocks and liquor stocks, reaching a weekly decline of 3.8%, closing at 802 points.
From the perspective of funds, the net outflow of northbound funds this week was about 29.329 billion yuan, of which the net outflow of Shanghai was 17.939 billion yuan and the net outflow of Shenzhen was 11.390 billion yuan. In terms of individual stocks, the divergence of Chinese concept stocks intensified, with Xiaomi rising 7.31% weekly, the strongest performance, but Baidu and NetEase fell by more than 10% in both weeks, and Sun Art Retail, JD.com and Tencent also fell by more than 5% weekly, affecting the trend of each brand 100 index. In addition, the top gainers are composed of central enterprises, PowerChina rose 4.81% weekly, and central enterprises such as China Communications Construction, Sinotrans and China Railway Construction also performed eye-catchingly.
Some securities companies pointed out that from a technical point of view, this week's Shanghai index in a narrow range, the 3,000 point mark below is still supported, the volume of the two markets can remain moderate, the current market valuation is relatively reasonable, coupled with the steady growth force in the fourth quarter and the management's continuous promotion of reform to stabilize market confidence, the A-share market is expected to continue the shock repair pattern.
After several weeks of adjustment, the valuation of each brand 100 index fell to 8.6 times on average, and the valuation level broke "9" for the first time, and the valuation depression appeared. The price-to-earnings ratio of the CSI Central Enterprise Composite Index is very close to the lowest price-to-earnings ratio in 10 years, and is one standard deviation below the 10-year average. Considering the revenue and profit growth rate of central enterprises, both absolute and relative valuations are at a low level, and there is a very high allocation cost performance.
Multiple factors drive the investment value of central enterprises
In order to promote the implementation of the SOE reform plan, the SASAC has successively promoted the implementation of the "Double Hundred Action" and "Three-Year Action" in accordance with the principle of pilot first and then rollout. Taking the improvement of the modern enterprise system with Chinese characteristics as the starting point, the central enterprises lead the transformation of the enterprise mechanism, optimize the layout, adjust the structure, promote the vitality of enterprise operation and the efficiency of governance, and further reflect the role of the central enterprises as stabilizers, ballast stones and main forces.
Today, the comprehensive strength of a number of enterprises has reached the leading level of the same industry in the world, and 99 state-owned enterprises have entered the Fortune Global 500 in 2022, including 47 central enterprises supervised by the State-owned Assets Supervision and Administration Commission of the State Council, and the main efficiency indicators of central enterprises in power generation, shipping, shipping and other industries have reached the world-class level. A number of enterprises have significantly improved their brand influence and internationalization level, 21 central enterprises have entered the top 500 global brand values, created a number of national business cards with independent intellectual property rights such as high-speed rail, nuclear power and UHV, and cultivated a number of enterprise brands with industry discourse power and reputation.
The "Three-Year Action Plan" marks that the reform of state-owned enterprises on the mainland has entered a new stage; At the end of the three-year operation, asset integration, the transformation of "managing assets" to "managing capital", focusing on strategic emerging industries and key technological breakthroughs have become the new focus of the next stage of SOE reform.
On August 23, the State-owned Assets Supervision and Administration Commission (SASAC) held a conference on key core technologies of central enterprises, and Hao Peng, Secretary of the Party Committee and Director of the State-owned Assets Supervision and Administration Commission, attended and spoke at the meeting, emphasizing that giving full play to the main role of enterprise innovation, further focusing on key industries and key areas at a new starting point, concentrating on conquering a number of key core technology products, leading and supporting the high-quality development of key industries and fields, making every effort to ensure the safety and stability of key industrial chains and supply chains, accelerating the construction of national strategic scientific and technological forces, and promoting the realization of high-level scientific and technological self-reliance and self-reliance.
Orient Securities analysis pointed out that with the continuous release of reform dividends, listed companies of central enterprises have long-term investment value.
The brokerage said that in the past 10 years, the ROE of China Securities Central Enterprises has been maintained above 10% for a long time, and its long-term performance is better than that of the overall A-shares, and the dividend rate of the central enterprises is significantly higher than that of the CSI 300 and the overall A-share listed companies, which is currently increased to 3.75%, and the dividend rate has advantages and a stronger ability to resist economic downside risks. From a valuation perspective, the price-to-earnings ratio of the CSI Central Enterprise Composite Index is very close to the lowest P/E ratio in 10 years, and is one standard deviation below the 10-year average. Listed companies of central enterprises have multiple drives of "strong profitability + high dividends + low valuation + theme catalysis", and have long-term investment value.
Many of the SOE constituents are undervalued
The "Daily Economic News" reporter noted that the constituents of each brand 100 index include more than 10 central enterprises, and from the perspective of market performance on Friday, including China Communications Construction, China Railway Construction, China Power Construction and other companies rebounded strongly and received financial attention.
According to the data, PowerChina, the world's largest energy engineering power company, has the ability to provide services for the whole industry chain such as planning, survey, design, construction, operation, equipment manufacturing, investment and financing. It ranked No. 1 in the 2021 Global Engineering Design Top 150, topping the list for two consecutive years; Ranked 5th among the top 250 engineering contractors in the world. Both rankings rank first globally in the power sector.
Since 2022, PowerChina's new signing orders have accelerated significantly, and the demand for energy, power and infrastructure has shown a high degree of prosperity, judging that benefiting from the "steady growth" policy continues to exert force, and the prosperity of infrastructure investment continues to heat up. The company has deep accumulation in the field of energy and power engineering, and will benefit from the construction of the national energy network under the background of "steady growth". From the perspective of performance and valuation, PowerChina will show rapid growth in 2022, with a price-to-earnings ratio of less than 10 times and an undervalued value.
China Railway Construction is exclusively initiated and established by China Railway Construction Group Co., Ltd., which is a super-large construction central industry managed by the State-owned Assets Supervision and Administration Commission of the State Council. The company is mainly engaged in infrastructure and housing project contracting, survey and design consulting, industrial manufacturing, real estate development and material logistics business. The company has been continuously listed in the "World's 250 Largest Contractors" by Engineering News-Record (ENR) in the United States, ranking 3rd in 2020.
In the first half of this year, CRCC completed the comprehensive layout of the construction industry industry chain, initially realized the transformation from traditional contractors to contractors-oriented, investors, developers and operators, and took the lead in undertaking 10 national key R&D projects under research, presided over 32 national scientific research projects, and undertook 1 national key core technology research task, and the transformation effect of scientific research project achievements was remarkable. Today, the mainland engineering contracting business is expected to enter a stage of high-quality development, and the company is the leader of the national engineering contracting industry and is expected to continue to benefit. At present, CRCC's price-to-earnings ratio is less than 4 times, which is also undervalued.
In addition, such as China Communications Construction Corporation, China MCC, China Railway and other central enterprises, their performance has maintained stable growth, but the current price-earnings ratio is also less than 10 times, and significantly lower than the average valuation level of each brand 100 index, the value is undervalued by the market, worthy of attention.
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