The Shanghai Composite Index closed down, institutions: the medium-term opportunities in the market outweigh the risks, funds sucked in the fall, and the premium rate of the medical ETF (512170) soared in late trading
On Wednesday (December 20, 2023), A-shares fluctuated downward throughout the day, with the three major indexes all falling by more than 1%, refreshing a new low for the year. Nearly 4,000 stocks in the whole market fell, and the market sentiment was poor. In terms of volume and energy, the turnover of the Shanghai and Shenzhen stock markets today was 663.6 billion yuan, an increase of 20.9 billion yuan from the previous trading day. On the disk, there is a lack of hot spots, and from the perspective of the Shenwan industry, only two major first-class industries such as coal and public utilities are in the red.
Regarding the current market, CICC said that the downside risk of the current position is very limited, and there is no need to be overly pessimistic about the subsequent market performance, and the medium-term opportunities in the A-share market still outweigh the risks. In terms of allocation, combined with the current macro environment and liquidity and other factors, the A-share small-cap style is expected to continue to dominate, but it is necessary to pay attention to the degree of valuation differentiation of the large- and small-cap style.
In terms of data, the LPR has been "on hold" for four consecutive months. According to the latest loan prime rate (LPR) released by the People's Bank of China today, the one-year LPR is at 3.45%, and the five-year LPR is at 4.2%. According to a number of industry analysts, the LPR remained stable in line with market expectations. The LPR remains unchanged, which also helps banks keep interest rate spreads basically stable. The industry believes that there is still room for LPR quotations to be lowered, and it is possible to follow up with the MLF interest rate cut in the first half of 2024.
In terms of products, the market was volatile and downward, and ETFs were bought more and more as funds fell. According to Wind data, as of December 19, the number of ETFs in the whole market increased to 889, with a total share of more than 2.01 trillion shares, setting a new record. Among them, the share of medical ETF (512170) as of the latest is close to 68 billion, of which 33.616 billion shares have increased during the year, with a growth rate of more than 98%!
Today, we will focus on the trading and fundamentals of two sectors, including medical care and Hong Kong stocks and the Internet.
1. Device stocks are active against the market, and the medical ETF (512170) fell slightly by 0.26% to outperform the market, and the premium rate soared at the end of the market!
The healthcare sector outperformed the broader market overall. The three major A-share indexes all fell by more than 1%, while the price of the representative medical ETF (512170) in the medical sector edged down by 0.26%. However, the medical sector has continued to fluctuate in recent days, and although it closed with a slight decline today, the closing price still hit a new low in more than four years.
At this stage, the on-market premium of the medical ETF (512170) is high, and the premium rate still reaches 0.31% as of the close, indicating that the buying funds are relatively strong, and there may be "bottom-buying" funds to absorb chips. According to the data, in the previous 10 trading days, the medical ETF (512170) received a net subscription of funds on 9 days, with a total amount of more than 750 million yuan.
Image source: Wind
In terms of the performance of constituent stocks, some medical device stocks were active against the market today, with Yingke Medical up nearly 4%, Yirui Technology up 3.56%, Jiu'an Medical up more than 1%, and Mindray Medical with a market value of 350 billion rose 0.44%. Medical services and medical IT-related constituents were among the top decliners, with Preh Ophthalmology falling 3.66%, and Venture Huikang and Weining Health both falling more than 2%.
On the news side, there is no shortage of good news in the medical device sector recently.
Haitong International Research Report pointed out that the number of innovative medical devices approved since 2023 has exceeded the level of the whole year of 2022. In 2022, there will be new breakthroughs in the localization of high-end medical equipment, and the State Food and Drug Administration will approve a total of 55 innovative medical device products to be launched, an increase of 57.1% over 2021. Since 2023 (as of December 15, 2023), the NMPA has approved 56 innovative medical device products for marketing, exceeding the number approved in the whole of 2022.
On the 7th of this month, the State Food and Drug Administration announced the revision of the "Medical Device Operation Quality Management Standards", which will come into force on July 1, 2024. As an important normative document to guide the quality management and supervision and management of medical device operation, the "Specification" can further improve the quality management of medical device enterprises, standardize the business behavior of medical devices, and promote the standardized development of the industry.
At present, the medical sector is at the bottom of history, and for the investment value of the sector, Industrial Securities believes that from the perspective of the whole industry, the long slope and thick snow of the pharmaceutical and medical industry are the core of the investment value of the sector. On the demand side, due to the huge population base and the deepening aging of the population, the continuous growth of medical demand has strong certainty. In the current investment environment, the stability and certainty of the growth of the pharmaceutical and healthcare sector are expected to promote its key layout direction in 2024. In terms of specific strategies, Industrial Securities believes that "innovation + internationalization" is an important keyword for pharmaceutical and medical investment in 2024, and the main line of industry growth is still the same.
One-click layout of the national health rigid demand sector, related products medical ETF (512170). According to the data, the constituent stocks of the CSI Medical Index tracked by the medical ETF (512170) comprehensively cover the subdivided leaders in the field of medical devices and medical services, of which the weight of medical devices is about 4 percent, which directly benefits from the follow-up medical new infrastructure, and the weight of medical services + medical beauty is about 5 percent, covering 10 CXO concept stocks, which directly benefit from the general trends of the times such as population aging, medical consumption upgrading and medical beauty.
Second, the rebound of the Hong Kong stock Internet has not been successful, when will it stabilize? Positive signals gather, institutions: the market at the end of the year and the beginning of the year may be worth looking forward to
Continuing last week's dovish statement by the Federal Reserve, the recent U.S. stock market rally like a rainbow, the Dow Jones continued to hit a record high for the fifth consecutive trading day overnight, and the Nasdaq both won the daily nine consecutive gains, and the popular Chinese concept stocks showed a general upward trend.
Hong Kong stocks opened higher across the board in early trading today, and the large Internet leaders collectively floated red, and the gains fell back in the afternoon. The price of the popular Hong Kong stock Internet ETF (513770) rose nearly 1% at one point, and closed slightly down 0.15% at the end of the session, with a full-day turnover of 175 million yuan.
Image Credit: Snowball
Recently, the Hong Kong stock market has continued to fluctuate since mid-November, and yesterday's Hong Kong stock Internet ETF (513770) fell to a new low in the year, and turned green again after a brief intraday recovery today, when will the market stabilize?
Market analysts said that in 2023, the Hong Kong stock market will be affected by the Federal Reserve's monetary policy and changes in internal and external economic expectations. Looking ahead, multiple factors may support Hong Kong stocks to usher in a counteroffensive opportunity after a series of declines.
1. Market environment: the inflection point of liquidity has arrived, and the domestic economic fundamentals continue to repair.
In terms of denominator, first, the central risk-free interest rate is expected to fluctuate and fall back as the Fed's interest rate hike cycle gradually stops, and global funds will gradually start to trade interest rate cuts; second, risk appetite is expected to improve marginally with the new progress of Sino-US relations. On the molecular side, there is still room for active easing of domestic macroeconomic control policies, and economic fundamentals are expected to continue structural repair.
2. AH valuation comparison: the bottom signal has increased, and Hong Kong stocks are more cost-effective.
From the perspective of valuation, as of December 8, the PE valuation of the Hang Seng Index and the Hang Seng Technology Index is at the extremely low quantile level of less than 2% in the past five years, and Hong Kong stocks are significantly discounted compared with A-shares, and the Hang Seng Shanghai-Shenzhen-Hong Kong Stock Connect AH share premium index is at the 99% quantile in the past five years. From the perspective of primary and secondary market sentiment, the bottom signal is also increasing, and the financing scale of Hong Kong stocks has fallen to a historical low level of less than HK $130 billion throughout the year, and the turnover rate of the whole market has also fallen to a historically low level (2018H2-2019H1 pivot).
In terms of strategy, China Securities said that the market is fully expected to cut interest rates by the Federal Reserve in 2024, when the return on high assets of the US dollar will decline, capital will flow to the world again, and Hong Kong stocks at the bottom of the valuation are expected to become an investment depression for international funds. Among them, in the field of scientific and technological innovation, the liquidity and profitability are of higher quality, stronger growth and greater flexibility. Continue to be optimistic about the subsequent rebound opportunities of related indices.
As the core target of the Hong Kong stock technology innovation field, investors who are optimistic about the future performance of the Hong Kong stock Internet sector are related to the Hong Kong stock Internet ETF (513770). According to the data, the Hong Kong stock Internet ETF (513770) tracks the CSI Hong Kong Stock Connect Internet Index (931637), and the weighted stocks bring together Tencent Holdings, Meituan, Xiaomi Group, Kuaishou and other leading companies in different Internet segments, including Tencent Holdings, Meituan, Xiaomi Group, Kuaishou, Jingdong Health weight of more than 60%, the top ten constituent equity weight of nearly 80%, heavy focus on Internet giants, with the clear tone of the platform economy, the continuous release of positive factors, Hong Kong Internet leaders are expected to usher in valuation, Earnings are on the rise.
Pictures and data sources: Shanghai and Shenzhen Stock Exchanges, Wind, Huabao Fund, etc., as of 2023.12.20.
Risk Warning: Healthcare ETF (512170) passively tracks the CSI Healthcare Index, which is based on 2004.12.31 and was released on 2014.10.31, and Hong Kong Internet ETF passively tracks the CSI Hong Kong Stock Connect Internet Index, which is based on 2016.12.30 and released on 2021.11. 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 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, 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. According to the assessment of the fund manager, the medical risk level is R3-medium risk, and the risk level of Hong Kong stock Internet ETF is R4-medium and high risk. Investors should pay attention to the appropriateness opinions issued by the fund managers in a timely manner when the distribution agencies (including fund managers, direct sales agencies and other sales agencies) conduct risk assessments of the Fund in accordance with relevant laws and regulations, and the opinions of the sales agencies on suitability are not necessarily the same, and the risk rating evaluation results of fund products issued by the fund distribution agencies shall not be lower than the risk rating evaluation results made by the fund managers. 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.