Exceeding expectations! It is expected to make up for the rise next week

This week, the market sentiment turned back and ran, with the Shanghai Composite Index falling below 3,000 points at the lowest and 3,100 points at the highest.

In the first half of the week, the market focused on trading the impact of the new national nine. Supporting the good and limiting the inferior, micro-cap stocks and small-cap stocks were abandoned in a concentrated manner, first falling sharply in two days, and then rebounding from deep declines, but the overall decline was still down. The Wind Micro Cap Index fell 12.11% for the week and 27.52% for the year.

Under the risk aversion, the dividend and special valuation sectors rose against the trend this week, and drove the Shanghai Composite Index to rise by 3,100 points. On Friday, the conflict between Iran and Israel fermented, and the market fell in general except for the beneficiary sectors such as petroleum and petrochemical, military industry, and chemical industry. After the market, Iran made it clear that it would not carry out a new round of retaliation, greatly exceeding market expectations, international oil prices, gold prices, and the US dollar index all fell back, and the A-share market may see a sentiment repair type next week.

At the industry level, the short-term main line is becoming clearer, and the resource and energy sectors and high-dividend sectors have all stepped out of excess returns.

For the week, the Shanghai Composite Index rose 1.52% to close at 3,065.26 points. The major broad-based indices were mixed, with Wind All A up -0.33%, CSI A50, CSI 300, CSI 500, CSI 1000 and CSI 2000 up 2.25%, 1.89%, 0.71%, -1.39% and -5.54% respectively. The small-cap style has clearly underperformed.

At the industry level, household appliances (5.57%), banks (4.48%), coal, non-bank finance, building decoration, petroleum and petrochemical sectors led the gains, while social services, commerce and retail, media, light manufacturing, textiles and apparel and other sectors led the decline, falling by more than 4 percentage points.

In terms of transaction value, the average daily turnover this week was 936 billion yuan, an increase of 99.1 billion yuan from last week, and the activity rebounded. The net outflow of northbound funds was 6.691 billion yuan, a net outflow for three consecutive weeks.

On the whole, this week is a week of frequent events and emotions, emotions are not lasting, and the market is likely to return to fundamentals-driven and return to normalcy next week.

The market believes that April has been decided, April has been halfway through, the month, the leading sectors are coal (7.67%), non-ferrous metals (5.96%), petroleum and petrochemical (5.5%), steel, household appliances and banks, all rose more than 4 percentage points, real estate, computer, media, trade and retail, electronics and other sectors led the decline, down more than 7 percentage points.

In terms of the leading sectors, coal and banks are high dividend logic, household appliances are the fundamental reversal logic driven by both domestic and export sales, and non-ferrous metals, petroleum and petrochemical, and iron and steel are the logic of rising international oil prices, gold prices, and iron ore prices.

The main line given by the current market is very clear, that is, the logic of dividends and the logic of fundamental recovery. Grasping these two main lines, that is, we can respond to all changes.

On the medium-term main line, we will continue to be optimistic about the interpretation of the pro-cyclical sector and the theme of new quality productivity, hold patiently, and wait for the market to finish.

Attached: Hot comments on the market

The GDP of the first and first quarters was released, and the growth rate exceeded expectations

In the first quarter, China's GDP grew by 5.3% year-on-year, higher than the expected value of 4.91%. The year-on-year growth rate of primary, secondary and tertiary industries was 3.3%, 6.0% and 5.0% respectively. The GDP deflator was -1.1% year-on-year, and nominal GDP was 4.2% year-on-year.

In terms of investment, investment in fixed assets increased by 4.5% year-on-year. Among them, infrastructure investment increased by 6.5 percent, manufacturing investment increased by 9.9 percent, and real estate development investment decreased by 9.5 percent. Excluding real estate, fixed asset investment increased by 9.3% year-on-year, which is still an important force for stable growth.

In terms of consumption, the social zero growth rate was 4.7%, higher than the average of 3.4% in the past two years, indicating that consumption is recovering steadily. In terms of type, retail sales of goods increased by 4.0% year-on-year, and retail sales of services increased by 10.0% year-on-year. Service consumption remained the bright spot, with food service revenue increasing by 10.8% year-on-year.

In terms of exports, the renminbi increased by 4.9% year-on-year, and the US dollar increased by 1.5% year-on-year. Among them, exports unexpectedly negative growth in March, weaker than market expectations, mainly due to the high base of the same period last year (USD, 10.86%; RMB, 19.2%) and price factors. The follow-up continues to be optimistic.

In terms of rhythm, the economic data in March slowed down marginally compared with January and February, the endogenous momentum of the economy is still not stable, and stimulus policy support is still needed; structurally, the real estate is weak, the manufacturing industry is strong, the former drags down building materials, black series, and becomes an important drag on the negative growth of PPI, and the latter supports industrial metals (non-ferrous metals), providing fundamental support for the A-share non-ferrous metal sector to lead the rise.

Looking ahead to the second quarter, consumption will continue to recover, especially service consumption, which will still maintain a high growth rate, exports are likely to continue to maintain positive growth, and in terms of investment, manufacturing and infrastructure investment are also driving the economy, while real estate is still a drag. In other words, the focus of steady growth is still real estate.

2. Ping An Bank released a quarterly report, and the bank's performance has not yet bottomed out

In 2024Q1, Ping An Bank achieved operating income of 38.770 billion yuan, down 14.0% year-on-year, and net profit of 14.932 billion yuan, up 2.3% year-on-year.

The sharp decline in revenue was mainly due to the continued narrowing of interest margins. The net interest margin in Q1 was 2.01%, down 0.62 percentage points from the same period last year. Structurally, lending rates have dropped sharply, and the cost of deposits has increased instead of falling. Affected by the 5-year LPR cut on February 20 this year, the subsequent interest rate spread is likely to continue to narrow, but the downward slope is expected to slow down significantly.

In terms of non-interest income, wealth management fee income was 1.074 billion yuan, compared with 2.351 billion yuan in the same period last year, a year-on-year decrease of 54.32%. The income of agency insurance and agency funds has declined sharply.

Loan size continued to grow positively, up 2.2% from the end of last year. Structurally, corporate loans continued to grow, with the balance of personal loans falling by 5% compared with the end of last year, continuing to reduce the number of high-risk individual customers, and the scale of personal loans has not yet bottomed out. At the end of March, the non-performing rate of corporate loans was 0.66%, the non-performing rate of personal loans was 1.41%, of which the non-performing rate of credit cards was 2.77%, which continued to be at a high level.

Net profit is growing against the trend, and it will benefit more from the provision backfilling. In 2024Q1, the credit impairment loss was 9.395 billion yuan, a decrease of 5.054 billion yuan from the same period last year, and the corresponding profit margin was released by 5.054 billion yuan. At the end of the first quarter of 2024, the provision coverage ratio was 261.66%, a decrease of 15.97 percentage points from the end of last year. In just one quarter, it has fallen by nearly 16 percentage points, and by linear extrapolation, it may fall to a low level of 214% by the end of 2024. In order to avoid this phenomenon, the recovery of profits from provisions will become weaker and weaker in the following quarters, in other words, negative profit growth in each quarter cannot be ruled out.

It is difficult to sustain profits by relying on provisions.

At present, benefiting from low valuations and high dividends, the banking sector is sought after by the market, and has risen high this year. However, to have a significant reversal, we must wait for the performance of the sector to hit the bottom.