The Shanghai Composite Index is tenacious for five consecutive days, cyclical stocks are rising to protect the disk, banks are finally picking up, the road to medical recovery is temporarily suspended, and institutions set the tone: the rebound is not over!
On November 9, 2023, it was another day of shock, with the three major stock indexes closing mixed, and the intraday amplitude was at the low level of the current round of rebound, but the Shanghai Composite Index stubbornly closed out of the daily line "5 consecutive yang". More than 3,500 stocks in the two cities fell, and the money-making effect declined.
On the disk, popular themes collectively fell, diet pills, short dramas, etc. have obviously pulled back, Huawei-led consumer electronics, automobiles and other themes, as well as chips, medical treatment have fallen simultaneously, and the Zodiac hype has entered a period of low tide, and the "dragon flying phoenix dance" has cooled down.
In terms of gains, traditional cyclical stocks such as banks and energy rose to support, coal led the rise throughout the day, banks rebounded significantly, and the price of bank ETF (512800) closed up 0.56%, ending the daily four-day consecutive yin. Brokerages moved locally in the afternoon, and market leaders such as Huachuang Yunxin, Guolian Securities, and Founder Securities rose significantly.
Image source: Wind, as of November 9, 2023
In terms of hot news, at the 2023 Financial Street Forum today, the China Securities Regulatory Commission said, "It attaches great importance to digital transformation, promotes the high-quality development of the capital market with digital intelligence, further improves the digital level of financial institutions, enhances the ability of digital supervision, and plays the leading and normative role of standards." "The resonance of policy, market and technology, the fintech sector is expected to usher in major development opportunities, and the sector represents the ETF - fintech ETF (159851).
The market has once again entered a tangled crossroads, but most institutions believe that this round of rebound has not ended, and there is a high probability that it will rise again after the adjustment.
Haitong Securities said that the background of this round of rebound is that the early adjustment of A-shares has been quite sufficient, and its valuation and asset comparison indicators are at historical lows. The recovery of macro and micro fundamentals is the core logic of the market rise, and the continuous implementation of favorable policies will continue to catalyze the development of the market at the end of the year and the beginning of the year.
In terms of specific sector selection, Galaxy Securities believes that the relevant sectors that benefit from favorable policies and economic repair are the main allocation directions in November.
【ETF All-Knowing Hot Spot Inventory】The following focuses on the trading and fundamentals of the two sectors of banking and healthcare.
1. [Large state-owned banks led the rise, bank ETF (512800) picked up and closed in the red, funds actively entered the market, and banks ushered in a strong time at the end of the year and the beginning of the year? 】
Today, the banking sector opened low and moved high, and the CSI Bank Index closed up 0.47%, outperforming the broader market. Major state-owned banks led the trend, with China Construction Bank, Bank of China, Industrial and Commercial Bank of China, and Postal Savings Bank all rising more than 1%, while Minsheng Bank, Bank of Communications, and Agricultural Bank of China followed suit. The market price of bank ETF (512800) closed up 0.56%, with a turnover of 162 million yuan, ending the daily line for 4 consecutive days.
Image source: Xueqiu, as of November 9, 2023
At the same time as the market picked up, the main funds quickly increased their positions, and the banking sector (Shenwan Level 1) received a net inflow of 1.693 billion yuan of main funds today, ranking third among the 31 Shenwan Level 1 industries.
Image source: Wind, as of November 9, 2023
ETF funds have also shown obvious signs of recovery recently, according to data from the Shanghai Stock Exchange, bank ETF (512800) has received funds to increase its position continuously in the past 3 days, accumulating 143 million yuan.
Image source: Wind, as of November 9, 2023
Taking history as a guide, most of the excess returns of the banking sector appeared in the stage of loose liquidity and upward economic expectations. Looking back at the sector performance since 2016, the sharp rise in bank stocks has mostly occurred in the period when the policy bottom appeared, macroeconomic expectations improved and corporate business prosperity rebounded.
Data source: Wind, statistical period: 2016.1.1-2023.10.31.
The macroeconomic recovery trend is clear, since July, various departments have issued a series of policy documents to stabilize market expectations, with the economic recovery is expected to strengthen, business prosperity recovery, banks or have considerable room for economic recovery.
Reminder: The end of the year and the beginning of the year are the time windows for the banking sector to perform well, because at this time, the demand for stable growth is stronger, and the bank's credit easing is larger, or the left side of the layout can be made in advance.
From the perspective of a longer cycle, the allocation value of the banking sector with bottomed valuations is worth paying attention to in the context of the basic implementation of negative factors, risk mitigation and continuous improvement of fundamentals.
1. Valuation: The bearish situation has basically landed, and the risk of further downside in bank valuation is small
After a long-term correction, the overall valuation of the banking sector has fallen to an all-time low. The latest price-to-book ratio of the CSI Bank Index is 0.52 times, which is lower than the time range of more than 99% in the past 10 years. All 42 listed banks are in a state of broken net, and 15 banks have PBs below 0.5 times. After experiencing the LPR interest rate cut and the adjustment of the existing mortgage interest rate, the potential negative side of the sector has been significantly reduced, which means that the valuation has little downside, and the current sector has a high margin of safety and cost performance.
Image source: Wind, as of November 9, 2023
2. Asset quality: expected marginal improvement
At present, market concerns mainly come from the exposure of credit risks related to real estate and local urban investment, which in turn leads to systemic risks. At present, the financing of real estate enterprises and the active introduction of local debt policies can alleviate related concerns; And under the bottom-line thinking, the systemic risk is not large. In addition, continued positive policies to stabilize growth and the gradual recovery of the economy have also alleviated concerns about asset quality. At present, the provision coverage ratio of banks is at a high level, and there is room for provisions to feed back profits. NPL generation is expected to remain stable and asset quality is expected to improve marginally.
In addition, Huijin said that it intends to continue to increase its holdings of bank stocks in the next six months, which is expected to form a positive feedback of "clear attitude→ implementation of actions→ market confidence boosted→ market is expected to recover", or promote the repair of bank stock valuations.
According to the data, the bank ETF (512800) tracks the China Securities Bank Index, and its constituent stocks include 42 listed banks in the A-share market, and nearly one-third of the positions are deployed in large state-owned banks such as Industrial and Commercial Bank of China, Bank of China, and Postal Savings Bank to capture the theme opportunity of "China Special Valuation"; About 70% of the positions focus on high-growth joint-stock banks, urban commercial banks and rural commercial banks such as China Merchants Bank, Industrial Bank and Bank of Xi'an, which are efficient investment tools for sharing the market of the banking sector.
2. [The performance of the third quarter may hit the bottom, and the medical ETF (512170) shrank by 1.17%, and the institution: a new cycle is expected to open]
When the bottom of the market is shocking, the road to the recovery of the medical sector is destined not to be smooth sailing. 44 of the 50 constituent stocks of the CSI Medical Index closed down, and the CXO and in vitro diagnostic concept stocks that rose sharply yesterday were in the front, with Gloria Ying down 4.58%, Pharmaron down 3.56%, New Industry down 3.74%, and CXO giant WuXi AppTec down nearly 2%.
The 28 billion volume medical ETF (512170) rose and fell at the beginning of the session, and then fell all the way, closing with a price drop of 1.17% and a full-day turnover of 380 million yuan, a sharp decrease from yesterday. Judging from the daily trend, the recent medical ETF (512170) has shown an upward trend, and although it closed negative today, it is still above the semi-annual line.
Image source: Wind, as of November 9, 2023
As sentiment in the healthcare sector restores, discussions about whether the sector will reverse are heating up. Professional analysis pointed out that after more than two years of adjustment, the medical sector may have been in the multiple bottom range of valuation, performance, policy, and institutional allocation, and there is more room for upward repair, but it is still too early to judge whether the medical sector has reversed at this stage, and it remains to be observed.
According to the latest 2024 investment strategy for pharmaceutical and healthcare released by Everbright Securities, in 2023Q3, the market value of equity public funds with heavy positions in pharmaceuticals accounted for 14.01%, +1.58pct month-on-month, and the market pessimism was restored, and pharmaceutical holdings increased month-on-month. At present, the valuation of the pharmaceutical industry is at a low level in the past 10 years (as of September 28, the PE valuation of the pharmaceutical and biological industry is 26.8 times, far lower than the 10-year average of 36 times).
Strategically, Everbright Securities believes that the reform of pharmaceutical policies is gradually having a profound impact on the development of the industry, and the main line of investment will undergo new changes with the changes in policies and industry trends. Innovation-driven, domestic substitution, brand leader or the main line of pharmaceutical and medical investment in the future.
From a fundamental point of view, the third quarter performance of the medical sector may "hit the bottom", and a new cycle is expected to open. Taking the CSI Healthcare Index tracked by the medical ETF (512170) as an example, the net profit attributable to the parent company of the 50 constituent companies in the index in the first three quarters was 45.935 billion yuan, down more than 37% from 73.403 billion yuan in the same period last year; The total revenue in the first three quarters was 202.703 billion yuan, a year-on-year decrease of 18.18%.
It is worth noting that the performance of medical stocks with higher weights is generally better than that of large numbers, highlighting the leading advantage. Among them, the net profit of Yuyue Medical, a leading consumer medical company, increased by 92.93% year-on-year in the first three quarters; The revenue and net profit of Aimeike, a leading medical cosmetology company, have achieved an increase of more than 40%; The revenue of the ophthalmology leader in the first three quarters exceeded 16 billion yuan, and the net profit increased by nearly 35% year-on-year to 3.181 billion yuan. The net profit of device giant Mindray Medical in the first three quarters increased by 21.38% year-on-year to 9.834 billion yuan, winning the crown of "profit king"; CXO giant WuXi AppTec's revenue in the first three quarters reached 29.541 billion yuan, with a net profit of 8.076 billion yuan, a year-on-year increase of 9.47%.
Image source: Wind, as of November 9, 2023
According to the data, the constituent stocks of the CSI Healthcare Index tracked by the medical ETF (512170) fully cover the subdivision leaders in the field of medical devices and medical services, of which the weight of medical devices is about 4%, which directly benefits from the follow-up medical new infrastructure; The weight of medical services + medical cosmetology is about 5%, covering 10 CXO concept stocks, directly benefiting from the general trends of the times such as population aging, medical consumption upgrading and medical cosmetology. Medical ETF (512170) is a "one-click layout of the national health rigid demand sector" for investors
Source: Shanghai and Shenzhen Stock Exchanges.
Risk Warning: Bank ETF passively tracks CSI Bank Index, the base date of the index is 2004.12.31, released on 2013.7.15, Fintech ETF passively tracks CSI Fintech Theme Index, the index base date is 2014.6.30, release date is 2017.6.22, and Healthcare ETF passively tracks CSI Healthcare Index, the index base date is 2004.12.31, released on 2014.10.31. The composition of the index constituents is adjusted in accordance with the rules of the index, and its backtested historical performance is not indicative of the future performance of the index. The individual stocks mentioned in the article are only objectively displayed and enumerated as index constituent stocks, and are not intended as a recommendation for 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, comments, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only, and investors shall be responsible for any investment behavior determined independently. In addition, any opinions, analysis and forecasts in this article do not constitute any form of investment advice to the reader, nor do they assume any responsibility for any direct or indirect losses arising from the use of the content of this article. Investors should carefully read the Fund Contract, Prospectus, Fund Product Key Facts Statement and other legal documents of the fund, understand the risk-return characteristics of the fund, and choose products that are suitable for their own risk tolerance. Past performance is not indicative of future performance! According to the assessment of fund managers, the risk level of bank ETFs, fintech ETFs, and medical ETFs is R3-medium risk. When a sales agency (including a fund manager's direct sales agency and other sales agencies) conducts a risk assessment 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, and the opinions of each sales agency on the suitability are not necessarily the same, and the risk rating evaluation results of the fund products issued by the fund distribution agencies shall not be lower than the risk rating 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 are different due to different factors to be considered. Investors should understand the risk and return of the fund, carefully select fund products based on their own investment objectives, horizon, 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 returns of the Fund. Caution should be exercised when investing in funds.
The content and data of this information source are for reference only and do not constitute investment advice. AI technology strategy is provided for Youlian Cloud.