01
Looking back at history, the "National Nine Articles" laid the foundation for the bull market
As a programmatic document, each promulgation of the "National Nine Articles" means a new round of iterative updating of the capital market system, and also lays the foundation for the start of the bull market. In 2004, the "National Nine Articles" were promulgated, which directly gave birth to the bull market in the history of A-shares from 2006 to 2007. In 2014, the "National Nine Articles" were promulgated, which quickly reversed the downturn of A-shares, although there was a boost from leveraged funds, but it is undeniable that the "National Nine Articles" laid the foundation for the market.
02
Looking back at history, what has changed in the "Nine Articles of the Country"?
The promulgation of the first two "National Nine Articles" corresponds to two major reforms in the mainland capital market - the reform of equity division and the reform of the registration system. After the issuance of the National Nine Articles in 2004 until around June 2006, the relevant supporting policies have been implemented, the most important is the "Guiding Opinions on the Reform of Equity Separation of Listed Companies" and the "Administrative Measures for the Reform of Equity Separation of Listed Companies" issued in August and September 2005. After the promulgation of the "New Nine Measures" in 2014, the policy content was implemented rapidly: 1) the entry of incremental funds such as northbound funds and insurance funds accelerated, 2) the proportion of direct financing increased rapidly, and 3) the scale of mergers and acquisitions expanded.
03
Standing at the moment, the new "National Nine Articles" guide the return of value
The new "National Nine Articles" focus on strengthening supervision, preventing risks, and promoting high-quality development, not only outlining the development goals for the next five years, 2035, and the middle of this century, but also starting from the goal-oriented and problem-oriented, making overall arrangements from the issuance and listing, continuous supervision, delisting supervision, securities and fund institution supervision, transaction supervision, and promoting the entry of medium and long-term funds into the market, so as to improve the quality of listed companies from the source and guide the return of value.
04
When the new "National Nine Articles" meets 3,000 points, it may be the starting point of the next round of market
The "National Nine Articles" were all launched when the market was relatively sluggish, and this time is no exception. After the decline of the A-share market over the past two years, the downturn in the market has been highlighted both in terms of sentiment and in terms of value for money in the medium to long term. Taking the median price-earnings ratio of Wind All A as an example, it has now returned to about 21 times, which is comparable to that in 2004 and 2014 when the "National Nine Articles" were promulgated.
05
Will the style change? The style of the over/under depends on the direction of policy
From a historical perspective, the interpretation of "large market first, small market later" is not significant in the short term, but it is more adaptable for more than half a year, and the small market is more cost-effective in the bull market with the market interpretation. Judging from the impact of this time: first, deepening the reform of the delisting system, further weakening the "shell value" and the premium of small caps; second, with the disclosure of annual reports and quarterly reports, the market has begun to verify its performance, and small caps will show an obvious negative calendar effect in April.
06
Focusing on the "dividend+" strategy is expected to usher in a long-term valuation reshaping
Referring to Japan's experience, in 2005, after Japan's dividend policy was clarified in the Company Law, the dividend yield of listed companies increased significantly. Since July 2014, dividends have contributed 52% to the earnings of Japan's high-dividend strategies, with a profit of about 34% and a valuation of less than 15%. With the constraints of the new "National Nine Articles" on the dividends of listed companies, A-shares are expected to further increase buybacks and dividends in the future.
07
In the medium and long term, the value revaluation of central state-owned enterprises may have begun
On the one hand, the State-owned Assets Supervision and Administration Commission (SASAC) will comprehensively carry out the market value management assessment of listed central enterprises, guide the heads of central enterprises to pay more attention to the market performance of the listed companies they control, and timely convey confidence and stabilize expectations through the application of market-oriented means such as increasing holdings and repurchases, and increase cash dividends. On the other hand, in terms of investment, the fixed asset investment of state-owned enterprises (SOEs) remained relatively resilient under policy support. In the future, state-owned enterprises are expected to become the backbone of a new round of industrial revolution and industrial transformation.
08
Of course, the opening of the trend market still needs to be confirmed in many aspects
After the release of the "National Nine Measures", the turnover of the A-share market tends to show a trend of increasing volume in the short term, and the sentiment has been boosted to a certain extent. However, starting from the trend market, in addition to the policy force, the substantial improvement of the macro economy and corporate earnings is the basis for the market to continue to bullish. At present, the sustainability of the domestic fundamental recovery still needs more data to confirm.
Risk Warning: Funds are risky, and investment should be cautious. Wells Fargo Fund does not guarantee that the fund investment advisory portfolio strategy will be profitable and the minimum return, nor does it make a commitment to capital protection, and investors may not be able to obtain returns or even lose their principal when participating in the fund investment advisory portfolio strategy. The fund investment advisory business is still in the pilot stage, and there is a risk that the fund investment advisory institution will not be able to continue to provide services due to the cancellation of the pilot qualification.