The Shanghai Composite Index is expected to fall below 2,900 points in April, and the Compo cycle dominates medium-term investment opportunities
1. The Shanghai Composite Index is expected to fall below 2,900 points
The performance of the major indices this week: Wind All A fell 2.73%, the Shanghai Composite Index fell 1.62%, the Shenzhen Component Index fell 3.32%, and the ChiNext Index fell 4.21%. The SSE 50 fell 2.31%, the CSI 300 fell 2.58%, the CSI 500 fell 1.81%, the CSI 1000 fell 2.95%, the CSI 2000 fell 3.71%, and Wind Micro Cap fell 5.55%. The dividend index rose by 1.18%.
In "Do Leap Years Really Affect Economic Growth?", we pointed out that the Shanghai Composite Index hit 3,090 points on November 21, 2023, and then fluctuated for four weeks with 2,950 points as the pivot and two weeks with 2,900 points. The rally fell back again after hitting 3,090 points on March 19, 2024. It is expected that in April, under the influence of the economy and the financial report data of listed companies, it will continue to fall until the gap of 2860 points is filled.
Due to the relatively high proportion of dividend stocks such as banks, petroleum and petrochemicals, and utilities in the Shanghai Composite Index, the high point of Wind All A's rebound in this round is only slightly higher than 4,565 points on December 29 and lower than 4,800 points on November 21. After the Shanghai Composite Index hit a high point in this round of rebound, it did not fall below 2,976 points on December 29. After the release of the PMI index that exceeded expectations on April 1, the main indexes began to fluctuate downward since April 2, and Wind All A fell sharply.
Overall, the decline in the broader market in April was in line with expectations. The price data released on April 11 was lower than market expectations, and the March export data and financial and social finance data released on the 12th were also lower than market expectations. It is expected that the economic data for the first quarter released on the 17th will also be lower than market expectations. The nine articles of the country are good for the capital market in the long run, but the trend is still dominated by fundamentals in the short and medium term. In the future, A-shares will fluctuate downward, Wind All A is expected to fall to 4100 points, and the Shanghai Composite Index is expected to fall to 2860 points. In May, the Shanghai Composite Index will not rebound more than 3,090 points, and Wind All A will not rebound more than 4,500 points.
Second, the Kangbo cycle is dominant, and the medium-term allocation value of the precious metals sector is higher than that of energy
Only three primary sectors rose this week: utilities rose 2.26%, coal rose 1.86%, and nonferrous metals rose 1.56%. Real estate fell by 7.13%, and agriculture, forestry, animal husbandry and fishery, non-bank finance, food and beverage, and national defense and military industry fell by more than 5%. From the perspective of secondary industries, precious metals rose by more than 10% this week, and hotel catering, tourist attractions, and construction machinery rose by more than 5%. Fishery, real estate services, decoration, professional services, and military electronics led the decline.
Since April, nonferrous metals have risen by 8.47%, coal has risen by 4.25%, and steel, public utilities, petroleum and petrochemical, basic chemicals, textiles and apparel have risen by more than 2%. Real estate, military industry, computers, non-bank finance, media, and beauty care fell by more than 5%.
Geopolitics stimulated gold to start the main rising wave, and the US media quoted people familiar with the matter on the 11th as saying that Iran would launch a direct attack on southern or northern Israel in the next 24 to 48 hours. On the 12th, it once exceeded 2,400 US dollars / ounce. Due to the existence of the May Day and November Golden Week, the investment opportunities in the tourism sector in April and September are in line with expectations. Consumption is relatively stable, and the steady growth of equipment renewal policies is the most favorable for construction machinery, while industrial metals are driven up by concerns about global iron ore supply and production cuts by Chinese smelters. The real estate industry is still sluggish, and there is only a wave of rebound opportunities driven by policies, superimposed on the exposure of Vanke's internal governance problems, and the continuous downward trend of the real estate chain after the rebound is in line with expectations. The pace of IPOs has slowed down, coupled with the strengthening of financial supervision, and the receipt of a notice from the China Securities Regulatory Commission (CSRC), the securities sector has performed poorly. The long-term contract liabilities of insurance are rigid, the yield on the asset side is declining, and the future profit is under pressure. Business consumption declined due to the decline in corporate compression costs, the demand for gifts and banquets after the Spring Festival was digested, the liquor industry entered the off-season of sales, channel sales decreased, and liquor dragged down the food and beverage sector.
Based on the logic of the geopolitics of the Kangbo depression cycle, in the medium term, we maintain the view that the gold price will rise to US$3,000 per ounce in 2026, and non-ferrous metals, petrochemicals, and coal stocks have strategic allocation value (see "Who is the most valuable in the future of the seven major types of assets?" (full version of the interview with China Securities News)). Coal power can
Hedging the risk of coal price fluctuations also has strategic allocation value. The four sectors of non-ferrous metals, petrochemicals, coal, and public utilities are allocated more than 60% of the positions as the bottom positions.
Since precious metals are dominated by asset attributes, crude oil, coal, and industrial metals are dominated by commodity attributes, and the allocation value of the precious metals sector is higher, and the volatility risk is also greater.
As a substitute for traditional energy, new energy also has allocation value in the Compo depression cycle. However, it is the earnings that determine the performance of the stock market, depending on the market structure. Since 2024, it is good for new energy companies to give up expanding production capacity. However, the industry as a whole is still plagued by overcapacity. The automobile price war has also put pressure on the profitability of power batteries, and the problem of photovoltaic and wind power consumption still exists. Combined with the industry valuation, it is in the U-shaped bottom range and has medium-term allocation value. However, in the short term, there are only phased opportunities and partial opportunities, such as new technologies such as solid-state batteries and power grid equipment, and the overall performance of new energy is estimated to be lower than that of traditional energy in one or two years.
Apparel, automobiles, light industry belongs to the export industry chain, machinery is the equipment update, steady growth of the sector, tourism benefits from consumption upgrading, plate performance is inferior to nonferrous metals, petrochemicals, coal, utilities and other strategic allocation plates, but individual stock opportunities are better. Apparel, automobiles, light industry, machinery, hotels and tourism can be configured with 30% positions. Sectors such as artificial intelligence, memory, and low-altitude economy are suppressed by market risk appetite, and there are phased opportunities, which can be allocated to 10% of the position, and the position can be increased to 50% in February and May.
3. Analysis of popular stocks
The 12-day change-rate ratio was 1512:3742, and the market sentiment was low. The price limit premium (yesterday's limit and today's increase in individual stocks) was 1.53%, the number of up limits was 67, the number of boards was 13, the number of open boards was 30, and the rate of frying was 28%,
The market leader is Laishen Tongling, which has 9 boards, which has driven the continuous daily limit of Zhongrun Resources and Ningbo Zhongbai in the gold sector, and has spread to the new retail mancaron and the Internet e-commerce Xinhuadu. Jingyi shares drive Chunguang Technology, Pengxin Resources, and Shengda Resources to rise to the limit. Yuanshang shares drive Yongtaiyun, Jushen shares, and Zhenyang development limit. Baichuan shares drive Zhengdan shares, China Xidian, Yida shares to the limit. Mount Emei drives tourism in Yunnan.
On the 12th, the Shanghai Stock Exchange announced that this week, the Exchange took written warnings and other regulatory measures against 58 abnormal securities trading behaviors such as lifting and suppressing and false declarations, and focused on monitoring serious abnormal fluctuations such as delisting and sorting stocks, such as Botian and Laishen Tongling, and conducted special inspections on 23 major matters of listed companies, and reported 1 case of suspected violations of laws and regulations to the CSRC. Speculation in the non-ferrous sector may be suppressed in the short term.