The two main lines of A-shares ended in the first quarter, but this sector may have more stamina

Every reporter: Zhao Yun Every editor: Peng Shuiping

On March 29, the market fluctuated and rebounded throughout the day, and the three major indexes all closed higher. At the close, the Shanghai Composite Index rose 1.01%, the Shenzhen Component Index rose 0.62%, and the ChiNext Index rose 0.63%.

In terms of sectors, gold concept, oil and gas, 5.5G, Xiaomi car and other sectors were among the top gainers, while Sora concept, real estate, computing power, mobile games and other sectors were among the top decliners.

Overall, stocks rose more and fell less, and more than 3,800 stocks rose in the whole market. The turnover of the Shanghai and Shenzhen stock markets today was 858.6 billion, a decrease of 73.6 billion from the previous trading day.

Hong Kong stocks are closed today due to holidays, and trading in Shanghai and Shenzhen Stock Connect is suspended.

Today, the last trading day of the first quarter, A-shares were generally unstable without the participation of northbound funds. In terms of indexes, the Shanghai Composite Index is obviously the strongest, and it seems to intend to close out of the second consecutive positive line on the monthly line.

However, on the disk, there is still a long-lost "famous scene" - the theme and high dividends take off.

Recall that at the end of February, the theme of high dividends soared was still "AI+", but this time it was replaced by concepts such as Xiaomi cars and car dismantling; of course, there is also the unavoidable gold plate.

This article will take you to a brief review from the dual perspectives of today and the whole quarter.

The most fierce gap in the morning was the Xiaomi car concept, but the subsequent shock decline was also obvious.

This is closely related to the effect of last night's press conference, the situation of Xiaomi SU7, and the fermentation of today's fermented deposit refund.

In all fairness, the market's hype attitude towards Xiaomi cars always feels a little difficult to explain, and it is difficult to compare with recent hot topics.

I don't discuss whether the car is good or not, just look at the subject matter. Flush data shows that since this wave of rebound (since February 6), Xiaomi's auto sector has risen by about 49%.

The low-altitude economy rose by 77.5% over the same period.

Since the Sora concept was released on February 20, the "Multimodal AI" section is used here as an alternative reference. By the time it peaked on Friday, the sector had risen as much as 58% in this rally.

In addition, Huawei's auto sector, which has not been stimulated by much news recently, has also rebounded nearly 40% from its lows.

In other words, under the general trend of a market-wide rebound, investors betting on the "beta" benefits brought by Xiaomi cars are not necessarily better than choosing other themes.

Now that the most talked-about press conference has landed, the funds that were previously ambushed are probably more fully realized today. How to go in the follow-up sector may refer to the deductive path of Huawei's line last year, that is, how the market reacts when it comes to the next message node (such as mass delivery).

The leading sectors that are negatively correlated with Xiaomi automobiles, here are two main ones.

1) Car dismantling

On the news side, the State Council held a video conference to promote large-scale equipment renewal and consumer goods trade-in, and the meeting required to solidly promote the four major actions of equipment renewal, consumer goods trade-in, recycling and recycling, and standard improvement, and strive to form an endogenous power and scale effect for upgrading.

The research report of Soochow Securities pointed out that the policy promotes a new round of large-scale equipment renewal and is optimistic about three main investment lines:

(1) General equipment is the first to benefit, supporting the general manufacturing demand: the general manufacturing industry stock equipment update space is large, the policy side from the perspective of top-level design to point out the direction of manufacturing equipment renewal.

(2) Transportation equipment is given priority to benefit, and it is recommended to pay attention to railway & ship equipment.

(3) Optimistic about the technological breakthrough of special equipment & advanced production capacity demand.

2) Precious metals (mainly gold)

The international gold price hit a new high last night, with the London gold spot and COMEX gold futures both standing above the $2,200 per ounce mark. There are three main factors behind it:

The first is risk aversion caused by international geopolitical tensions;

Secondly, the market generally expects the monetary policy of the Federal Reserve and other major economies to remain modest, and the low interest rate environment reduces the opportunity cost of holding gold, thereby enhancing the investment attractiveness of gold.

Finally, continued buying by central banks around the world has further fueled gold prices. According to the latest report released by the World Gold Council, overall gold consumption climbed by about 3% to 4,899t in 2023, the highest since 2010, due to strong demand in the OTC market and continued central bank buying.

Founder Securities said that similar to other precious metal varieties, the price of gold is determined by its currency, financial (investment) and commodity triple attributes, of which the investment attribute is the strongest and the commodity attribute is the weakest, specifically, the monetary attribute of gold determines that the price of gold is often in an inverse relationship with the US dollar index, and the financial attribute of gold determines that the price of gold is often in an inverse relationship with the actual interest rate in the United States, and the commodity attribute of gold has little impact on the price of gold, and the central bank's increase in reserves may form an effective support for the price of gold.

After today's surge, the precious metals sector rose by 10% in the first quarter, surpassing the banking sector (up 9%).

This brings us to the second topic of this article.

Throughout the first quarter, there were two themes with the most exaggerated gains in the concept index divided by straight flushes - the Sora concept (AI direction) and the low-altitude economy (flying cars are one of the branches).

It can be said that in the entire first quarter, these are the two main lines that are well deserved.

It is worth noting that although the Sora concept has risen in the past year, aside from the 23 constituent stocks in the sector, the entire AI theme behind it is not as diverse as last year.

Some familiar sectors such as CPO, skit games, and liquid-cooled servers have not risen much this year.

On the other hand, the low-altitude economic sector, which contains 109 constituent stocks, is actually stronger overall. Judging from the rebound since February 6, there is more momentum of the "strongest main line".

With the recent intensive release of policy documents from the central to local governments in the field of low-altitude economy, the development expectation of the industry is increasing.

On March 28, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, the Ministry of Finance, and the Civil Aviation Administration of China issued the "Implementation Plan for the Innovative Application of General Aviation Equipment (2024-2030)".

The 2024 government work report proposes to "actively build new growth engines such as biomanufacturing, commercial aerospace, and low-altitude economy". Many cities across the country have seized development opportunities and actively laid out low-altitude economies.

To a certain extent, the current low-altitude economy is enjoying the same treatment as last year, when the AI theme was in a "hazy period". Some media pointed out that many strong stocks in the early stage involved fields ranging from low-altitude aircraft manufacturers and material suppliers to airports and flight control. However, another common phenomenon is that although the relevant sectors have a layout, but the actual ability to affect the performance is still small, mostly only "concept", there is still a long way to go to truly achieve marketization, investors should pay attention to short-term speculation risks.

The increase only represents the past, and in the next second quarter, can these two main lines continue to be strong?

On the one hand, we can see and do and grasp the rhythm;

On the other hand, let's not forget that we mentioned in the previous push that an important feature of the stock market in April is that the relative rise and fall of stock prices has a high correlation with the performance of the first quarter, that is, the higher the earnings growth, the better the performance of individual stocks.

Today, there are two "sky floor" stocks in the market, which seems to imply that the short-term is not so stable.

If the pace of the market changes, although some funds will continue to chase hot spots, another part of the funds seeking stability may embrace more defensive sectors.

Taking the Flush industry index as an example, including the precious metals that suddenly overtook the championship today, in the chart below, nine major sectors such as banks and tourism are the more "stable and far-reaching" sectors in the entire first quarter, most of which have the attributes of high-dividend assets.

Friendly reminder, there is such a slow bull stock:

It has risen by 30.62% in 2021, 8.61% in 2022, 55.51% in 2023, and 39.09% since 2024. As of today's close, the market value surpassed that of China Construction Bank and ranked fourth in A-shares.

It is PetroChina, which ranked 76th among all A-shares in terms of gains during the year, outperforming about 98.5% of individual stocks.

We've mentioned high-dividend assets a lot in past tweets, and we can't help but talk about them again today.

According to the statistics of Securities Times and Databao, as of March 28, nearly 500 listed companies in the A-share market have released profit distribution plans for 2023, plus the above-mentioned companies' dividends in the first quarter, semi-annual and third quarters of 2023, with a total dividend of more than 917.6 billion yuan, accounting for nearly 43% of their net profit in 2023.

Compared with previous years, A-share dividends in 2023 show three major trends:

First, the cash distribution of big white horse stocks hit a new high;

Second, the dividend rate of some high-quality companies has increased significantly, and technology companies have frequently paid large dividends;

Third, the frequency of market dividends has increased significantly.

From the perspective of index performance, since the beginning of this year, the dividend index, which is dedicated to high-dividend style stocks, has risen significantly higher than the A-share market, and has been favored by investors.

Xun Yugen, chief economist of Haitong Securities, said that with the policy to increase the guidance of cash dividends of listed companies, it will help cultivate the long-term investment concept of the market and enhance the attractiveness of the capital market.

National Business Daily