On Wednesday (June 28), the three major indexes fell collectively in early trading, the Shanghai Composite Index fell nearly 1% at one point, and recovered a lot in the afternoon, as of the close, the Shanghai Composite Index basically closed flat, the Shenzhen Component Index fell 0.47%, and the ChiNext Index fell 0.44%. Although the index has rebounded, the overall market has fallen more or less, the transaction is sluggish, and the wait-and-see mood is strong. From the perspective of the market, AI+ has become the hardest hit area for the decline, or one of the reasons for suppressing the trend of the index.
Specifically, ChatGPT, domestic software, CPO and other AI+ branch fields collectively fell heavily, and the core target of AI and the former darling of funds - Inspur Information fell at the open, and there were still nearly 400,000 hand seals at the close, impacting the sentiment of the AI+ sector. Peripheral news may be one of the important factors in the AI sector. On June 28, it was reported that the United States was considering imposing new restrictions on the export of artificial intelligence (AI) chips to China.
In response to the current market situation, Soochow Securities said that from the current market valuation and capital perspective, the market continues to decline space is limited, mainly due to the lack of market confidence under the expectation of economic slowdown, which requires focusing on changes in fiscal and monetary policies, once a new round of easing policies is introduced, the market may usher in a retaliatory rebound, which needs to be focused on tracking, but structuring will still be the main line of the market, do not blindly copy the bottom, only pay attention to the varieties that are actively traded by large funds.
Guosheng Securities pointed out that if there is no large positive or negative impact in the short term, the Shanghai Index will probably do shock sorting around the 3200-point center and consolidate the bottom, which also means that the June index may end flat. The focus of funds is more on the key events in July, such as the disclosure of listed companies' interim reports, the release of financial data in June, the convening of important meetings, etc., and the cooperation at the data and policy level determines the core direction of the second half of the year, and institutional funds will also take this opportunity to adjust the layout.
Let's take a look at the specific market review.
【Market Hot Spot Review and Interpretation】
On Wednesday (June 28), after the broader market experienced a sharp decline in early trading, the index rebounded in the afternoon, the Shanghai index was basically flat, and the ChiNext index was relatively weak. By the close, the Shanghai Composite Index was down 0.00%, the Shenzhen Component Index was down 0.47%, and the ChiNext Index was down 0.44%. The turnover of Shanghai and Shenzhen today was 888.2 billion yuan, 47.1 billion yuan higher than the previous trading day, but it was still sluggish. Northbound funds sold a net of 4.072 billion yuan throughout the day, of which Shanghai Stock Connect sold 2.583 billion yuan and Shenzhen Stock Connect sold 1.489 billion yuan, which was a net sale for two consecutive days.
On the market, reducer and robot concept stocks bucked the trend and rose sharply, while coal and power stocks strengthened in early trading. The trend of AI concept stocks diverged, and the application direction of games rebounded in the afternoon, the direction of computing power and data fell sharply, and Inspur Information, Yunsai Zhilian, Unigroup and other shares fell to the limit. In terms of sectors, reducers, coal, electricity, agricultural machinery and other sectors rose first, and CPO, data elements, ChatGPT, domestic software and other sectors fell first.
In terms of individual stocks, the overall two markets fell more or less, a total of 2797 stocks fell, 2171 stocks rose, 234 stocks were flat, and the money-making effect "preferred".
Capital flows were upward, with the top industries with net inflows of funds (+2.623 billion yuan), power equipment (+2.144 billion yuan), and automobiles (+1.319 billion yuan). The TMT industry was hammered by the main funds, and the top three industries with net outflows were computer (-5.128 billion yuan), electronics (-1.954 billion yuan), and communications (-1.209 billion yuan).
Today, we will focus on the trading and fundamentals of 2 sector themes such as defense industry and food.
I. [Defense Industry ETF (512810)]
The defense industry sector charged in the afternoon, bucking the trend and rising sharply, and fell back in late trading, with the industry benchmark index - the CSI Military Industry Index closing up 0.67%. Among the component stocks, Fiberhome closed the limit in the afternoon, China Power rose 7.65%, and China Great Wall, Zhongtian Rocket, Philihua, Fushun Special Steel and other stocks rose more than 4%. China Shipbuilding Department fell back in the tail of the day, with Chinese ships down 1.46% and CSSC Defense down 0.71%.
In terms of popular ETFs in the market, the defense industry ETF (512810) rose more than 1% in the afternoon, and although it all fell in the late session, the price still closed up 0.90% against the market, and the full-day turnover was enlarged to 53.54 million yuan.
The recent continuous activity of the defense industry sector is related to the expected heating up of the reform of the industry itself, on the other hand, the institution also believes that the military industry sector is expected to continue to repair in the sector rotation under the background of significant over-decline.
1. The military industry reform is expected to heat up, and the industry will be strongly catalyzed
Recently, the State-owned Assets Supervision and Administration Commission (SASAC) held a special meeting on improving the quality of listed companies and M&A and restructuring of central enterprises, and continued to promote the work of central enterprises to improve the quality of listed companies. In this regard, Haitong Securities believes that it should continue to pay attention to the high-quality development of listed companies controlled by central enterprises in the military industry.
Haitong Securities also previously said that reform is an important factor in promoting the qualitative change of the fundamentals of military enterprises. According to the 2022 annual report, the current average securitization rate of major military industrial groups is about 43% (according to the caliber of total revenue), 41% (according to the caliber of total assets), and 42% (according to the caliber of net assets), Haitong Securities believes that the potential asset securitization space of the sector is still large.
Zheshang Securities said that to build a "valuation system with Chinese characteristics", asset integration is gradually advancing, and shipbuilding central enterprises are expected to take the lead in benefiting. Since November 2022, the market has continued to build a "valuation system with Chinese characteristics", and shipbuilding central enterprises are expected to take the lead in benefiting as their profitability is gradually entering the rising range. According to data from the China Shipbuilding Industry Association, from January to May 2023, the country's shipbuilding completed 16.47 million deadweight tons, a year-on-year increase of 15.4%. Received orders for new ships of 26.45 million dwt, a year-on-year increase of 49.5%. At the end of May, orders for handheld ships were 117.99 million dwt, a year-on-year increase of 15.5%. The three major indicators of shipbuilding achieved comprehensive growth, the international market share remained ahead, and the revenue and profit of shipbuilding enterprises continued to improve.
2. Under the background of significant over-fall, the military industry sector is expected to continue to repair in the sector rotation
Near the end of the second quarter, many institutions issued strategic reports on the defense industry sector, looking forward to the trend of the sector in the second half of the year. The latest strategic view of Industrial Securities believes that in the context of significant over-fall, the absolute growth rate of many military industry targets in the next three years will still maintain a high level, the valuation and growth matching degree is high, the stock price position is in the middle and lower part, coupled with the middle and upstream demand in the third quarter, the military industry sector is expected to continue to repair in the sector rotation.
Minsheng Securities is firmly optimistic about the follow-up opportunities of the sector, which are mainly supported by four major logics:
(1) The long-term trend of the industry is safe. The economic logic of "high growth in resonance of supply and demand" in the medium and long term is still valid, and the phased adjustment is only a short-term impact;
(2) It has a comparative advantage over other industries. Military tools have "counter-cyclical" properties and long-term certainty, and the "spring effect" in the middle and upper reaches can also bring growth elasticity;
(3) Catalysts are frequent. The "reform of state-owned enterprises" continues to advance, and the new domain and new quality point out the direction;
(4) Valuations and market sentiment are low. After experiencing sustained outflows in the fourth quarter of 2022 and the first quarter of 2023, institutional funds are expected to recover in the third quarter of 2023, driving the sector up. Based on the above, it is recommended to layout to meet the rebound.
According to public information, the constituent stocks of the underlying index of the defense industry ETF (512810) (China Securities Military Industry Index) fully cover 79 subdivision leaders in the defense industry field, which is a sharp weapon for one-click investment in the core assets of the A-share military industry. Compared with other assets, the defense industry has a high degree of internal circulation, strong operational resilience, broad prospects for military-civilian integration, the current reform of state-owned enterprises is in full swing, and the valuation of the sector is still at a historical low, with long-term investment value. As of March 31, 2023, the net value growth of the Defense Industry ETF (512810) since its inception has exceeded the return of 21.5% relative to the performance benchmark!
II. 【Food ETF (515710)】
The eating and drinking sector closed red against the market today. The trend of liquor stocks was divergent, Kweichow Moutai rose more than 1%, showing the "ballast stone" style of the sector, and Luzhou Laojiao, Shanxi Fenjiu and Yanghe shares fell slightly to close. The snack food and condiment sectors have not been active for a long time, with Yanjin shop rising nearly 7% and Baoli Food rising 4.64%.
In terms of ETFs, the food ETF (515710) closed in the red tenaciously, with the price of the market rising 0.28% for two consecutive days. It is worth mentioning that in the previous two trading days, food ETF (515710) received net subscriptions of funds in a row, with a total of 12.86 million yuan.
The trend of the eating and drinking sector in the past two days may be boosted by the large increase in holdings of the controlling shareholder of liquor leader Kweichow Moutai. In addition, from the perspective of sector valuation, the cost performance is also more prominent.
1. Kweichow Moutai increased its holdings in a large way, which is expected to inject "strengthening" into the liquor sector
On the news, Kweichow Moutai announced overnight that as of June 26, 2023, the shareholding increase plan has been implemented, with a total of more than 1.7 billion yuan. Specifically, Moutai Group Company increased its holdings of 0.0732% of the company's shares to 1.676 billion yuan, and Moutai Technology Development Company increased its holdings of 0.0030% of the company's shares to 69 million yuan.
It is reported that in the more than 20 years since Moutai was listed, the company's controlling shareholders have increased their holdings four times, in 2011, 2013, 2014 and 2023, of which 2023 is the largest increase.
Kweichow Moutai said that the increase in holdings is mainly based on three reasons: first, confidence in the company's future development prospects and sustained and steady growth; The second is the recognition of the company's long-term value; The third is to further support the long-term stable and healthy development of the company. At the same time, the entity that increased its holdings also encouraged other shareholders to use the funds obtained from this dividend to voluntarily increase their holdings of the company's shares.
Industry insiders pointed out that since the beginning of the year, the volatility of liquor stocks has weakened, or the expectation of consumption recovery is weak, coupled with the flattening short-term data, causing concerns about the inversion of liquor prices. The large increase in holdings by the controlling shareholder of liquor leader Kweichow Moutai is expected to inject "strengthening" into the liquor sector.
2. The bottom of the eating and drinking plate is gradually appearing, and the institution recommends paying attention to the bottom configuration opportunities
CITIC Securities believes that from a medium- and long-term perspective, the top liquor companies benefiting from the concentration of the industry will still maintain steady growth, and the bottom of value will gradually emerge after the valuation pullback. Looking at 2023, we expect that wine companies will be the first to digest inventory in the first half of the year, and expect the upward resonance of prosperity and confidence in the second half of the year under the background of gradual economic recovery, and the Mid-Autumn Festival National Day peak season will be an important window. On the basis of lower valuations, solid industry fundamentals, and marginal upward short-term prosperity, any marginal uptick will drive sector performance, and you can consider maintaining allocation.
In terms of mass products, the latest research report of Orient Securities said that in the condiment sector, from the profit side, the current price of some raw materials has shown a downward trend, superimposed product structure optimization, demand recovery has brought about the optimization of the overall cost and investment efficiency of the industry, and the short- and medium-term profit margin repair is still worth looking forward to. In the snack food sector, looking back at 2022 and 2023Q1, upstream suppliers of snacks benefited from the new channel dividend to achieve revenue increase, and the current channel dividend continued, and leisure snack suppliers are still expected to benefit.
For the overall view of the eating and drinking sector, the latest research report of Zhongtai Securities said that with the pessimistic expectation of consumption power gradually repaired, in the policy increase environment, the sector is expected to usher in a rebound market, the current valuation level of food and beverage is in a low position in recent years, the cost performance is prominent, it is recommended to pay attention to the allocation opportunities in the bottom range.
The data shows that as of the close, the subdivided food index PE (TTM) is 29 times, located at the 14.85% quantile in the past 5 years, and is still lower than the median valuation of 34.85 times in 5 years, which is already in the cost-effective range.
Optimistic about the long-term investment value of the food and drink sector, you can focus on the food ETF (515710). According to public data, the food ETF (515710) tracks the CSI subdivided food and beverage industry theme index, with more than 60% of the positions in liquor, and nearly 40% of the positions in beverage dairy, flavoring, beer and other sectors, of which the weight of "Maowulu Lufenyang" exceeds 50% (Kweichow Moutai, Wuliangye, Luzhou Laojiao, Shanxi Fenjiu, Yanghe Shares), taking into account Yili Shares, Haitian Weiye, Tsingtao Beer and other sub-sector leaders.
Risk warning: The defense industry ETF passively tracks the CSI Military Industry Index, which has a base date of 2004.12.31 and was released on 2013.12.26; the food ETF passively tracks the CSI Subdivision Food and Beverage Industry Theme Index, which has a base date of 2004.12.31 and was released on 2012.4.11. The composition of the constituent stocks of the index is adjusted in due course in accordance with the rules for the preparation of the index, and their backtest historical performance is not indicative of the future performance of the index. The individual stocks mentioned in the article are only an objective display and listing of the constituent stocks of the index, and are not recommended as any individual stocks, and do not represent the investment direction of the fund manager and the Fund. Any information appearing in this article (including but not limited to individual stocks, reviews, forecasts, charts, indicators, theories, any form of expressions, etc.) is for reference only, and investors are responsible for any investment behavior that they decide independently. In addition, any opinions, analyses and forecasts in this article do not constitute any form of investment advice to the reader, nor are we responsible for any direct or indirect losses arising from the use of the content of this article. Investors should carefully read the fund legal documents such as the Fund Contract, Prospectus, and Fund Product Information Summary, understand the risk-return characteristics of the fund, and choose products that are compatible with their own risk tolerance. A fund's past performance is not indicative of its future performance! According to the fund manager's assessment, the risk level of defense industry ETF and food ETF is R3-medium risk. Sales institutions (including fund managers, direct sales institutions and other sales institutions) conduct risk evaluation of the Fund in accordance with relevant laws and regulations, investors should pay attention to the appropriateness opinions issued by the fund manager in a timely manner, the opinions of the sales institutions on appropriateness are not necessarily consistent, and the risk level evaluation results of fund products issued by fund sales institutions shall not be lower than the risk level evaluation results made by the fund manager. The risk-return characteristics of the fund and the risk level of the fund in the fund contract differ depending on the factors considered. Investors should understand the risk return of the fund, carefully select fund products based on their own investment objectives, duration, investment experience and risk tolerance, and bear their own risks. The registration of the Fund by the CSRC does not indicate that it has made a substantive judgment or guarantee on the investment value, market prospects and income of the Fund. Fund investment should be cautious.
This article is derived from financial world information