A-shares, a big reversal! PetroChina has risen, up nearly 50 percent during the year! This sector has fallen in batches

On April 15, the three major stock indexes out of the V-shaped reversal, as of noon close, the Shanghai Composite Index rose to 1.21%, the Shenzhen Component Index rose 1.65%, the ChiNext Index rose 2.10%, and about 1,500 stocks rose in the two cities.

Previously, the Shanghai Composite Index fell 0.78% at one point, falling below the 3,000-point integer mark. A-shares once topped the hot search.

In terms of sectors, core assets broke out across the board, and Chinese and high-dividend assets were active. On the other hand, the ST plate fell heavily and staged a falling tide.

Judging from the disk, many factors such as the blockbuster release of the "National Nine Articles" and the frequent geopolitical conflicts on the periphery over the weekend have affected the stock market.

The ST sector fell hard

As of midday, small and micro cap stocks fell sharply, and the Wind micro cap index fell 7%. As of midday, many ST stocks such as *ST Meishang and *ST Yuebo fell by more than 10%, and more than 60 shares in the sector fell to the limit.

Zhongzitou stocks broke out, COSCO, CRRC, Zhonggong Hi-Tech, etc., the intraday limit, China Textile Standard rose by more than 20%, China Railway Assembly, China Machine Inspection, and China Shipbuilding Hanguang rose by more than 10%. The three barrels of oil went hand in hand, Sinopec rose 4% intraday to hit a new high since 2008, PetroChina rose more than 3% intraday, and the total market value surpassed ICBC to rise to the third place in A-shares. PetroChina has risen 49% this year.

Overall, stocks in the whole market fell more and rose less, and more than 3,700 stocks fell in the two cities.

After the close of trading last Friday, the policy "king bomb" reappeared. First of all, the "Several Opinions on Strengthening Supervision and Preventing Risks and Promoting the High-quality Development of the Capital Market", that is, the third "National Nine Articles" of the capital market was officially promulgated. Subsequently, the China Securities Regulatory Commission officially issued the "Opinions on the Strict Implementation of the Delisting System", which was called the most stringent "new delisting regulations" in history.

According to Guo Ruiming, director of the Department of Supervision of Listed Companies of the China Securities Regulatory Commission, the "Delisting Opinions" focus on improving the overall quality of existing listed companies, through strict delisting standards, increase the clearance of "zombie shells" and "black sheep", and reduce the value of "shell" resources;

The delisting reform has lowered the number of years, amount and proportion of financial fraud triggering delisting, and adjusted the existing target of more than 500 million yuan and more than 50% of the amount of fraud for two consecutive years to more than 200 million yuan and more than 30% of fraud in one year, 300 million yuan and more than 20% in two years, and fraud for three consecutive years or more, with the aim of effectively curbing financial fraud.

In addition, the delisting target of the operating income of loss-making companies on the main board will be raised, and the operating income in their "negative net profit + operating income" will be increased from the current "100 million yuan" to "300 million yuan", and efforts will be made to eliminate companies that lack the ability to continue to operate; the market value of A-share companies on the main board will be raised, and the market value standard of A-shares (including A+B shares) on the main board will be raised from the current "300 million yuan" to "500 million yuan", so as to further give full play to the market-oriented exit function and promote the quality and investment value of listed companies.

In the context of the introduction of policies such as the strictest new rules on delisting, the improvement of listing standards, and the strict management of programmatic trading, the differentiation of the A-share market may be unavoidable. For some small market capitalization and ST sectors that are not well managed and do not have growth potential, they are all negative.

Institutions: The market may come out of the slow bull

The China Securities Construction Investment Research Report pointed out that the A-share market ushered in a sharp rise after the release of the first two "National Nine Articles", and the "National Nine Articles" may help the market get out of the slow bull.

▲The trend of A-shares after the release of the "National Nine Articles" in the past two times (source: Choice data)

SDIC Securities believes that the "National Nine Articles" clearly emphasize the strengthening of supervision and risk prevention, and the full implementation of the "long teeth with thorns", with edges and corners, the core observation is based on the financing market to the investment market after a clear turn to build a good stock market ecological environment, which is the institutional basis for A-shares to enter the medium-term bull market. The real impact of the "New Nine Measures" policy is that regulatory behavior with value preference may mean a sharp decline in the investment value of micro-cap stocks in the field of structural style (the CSI 2000 Index is the lower limit of the value of small and medium-cap investment), which means that the dividend era has begun to open (the market has begun to move from the stage of discovering high dividends to creating high dividends), and it means that a new round of "beautiful 50" pricing is being conceived (from the financing market to the investment market).

In a research report released on April 14, CICC said that the new "National Nine Measures" focus on measures such as strict listing control, strict and continuous supervision, and increased supervision of delisting, and the market is more concerned about "strengthening the supervision of cash dividends", "restricting the reduction of major shareholders and implementing risk warnings for companies that have not paid dividends for many years or have a low proportion of dividends". In the past two times, the "National Nine Measures" have had a profound impact on the subsequent institutional optimization of the capital market, and the corresponding market performance in the long cycle is also relatively positive, and this reform will help enhance the endogenous stability of the capital market and have a positive impact on the long-term performance of the market.

CICC believes that combined with the current low overall valuation of the A-share market, the forward P/E ratio of the CSI 300 is 10.1 times, which is still significantly lower than the historical average level of 12.6 times, the horizontal and vertical comparison is still relatively attractive, and the downside risk of the market is limited.

Goldman Sachs strategists wrote in the note that given the strong policy sensitivity and compelling liquidity dynamics of the A-share market, they are still strategically bullish on A-shares, and expect potential upside of 12% and 8% for A-shares and H-shares in the next 12 months. Goldman Sachs strategists noted that they are bullish on consumer technology/internet stocks because of a more favorable environment for revenue growth and relatively good capex/cost control. Keep an eye on shareholder returns, as both dividends and share buybacks are at all-time highs in 2023.

Editor|Lu Xiangyong Gai Yuanyuan

Proofreading|He Xiaotao

Cover image source: Visual China VCG41N1335015909

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