Every reporter: Liu Mingtao Every editor: Xiao Ruidong
Last week, in the first trading week after the introduction of the new "National Nine Measures", the A-share market showed a volatile pattern, with central state-owned enterprises and dividend sectors continuing to be strong, while small and medium-cap stocks adjusted greatly.
As of last week's close, the Shanghai Composite Index rose 1.52% for the week, the largest gain, and the Brand 100 Index closed almost flat, down 0.03%.
Mapping by Yang Jing
With the disclosure of the 2023 annual report and the first quarter of 2024 performance forecast, the high-performance leading stocks represented by growth may become the main line of investment.
The Shanghai Composite Index rose 1.52% last week
Last week, the A-share market bucked the trend, and the overall performance of large-cap blue-chip stocks was strong. As of the close of trading on April 19, the Shanghai Composite Index rose 1.52% to close at 3,065.26 points, the Shenzhen Component Index rose 0.56% to close at 9,279.46 points, the ChiNext Index fell 0.39% to close at 1,756.00 points, the STAR 50 Index fell 1.07% to close at 730.56 points, and the Brand 100 Index closed almost flat, down 0.03% to close at 841.57 points.
Overseas, U.S. retail sales rebounded in March both year-on-year and month-on-month, with better-than-expected data, reflecting that consumer demand remains strong. Fed officials continued to be hawkish last week, with the presidents of the New York Fed and the Atlanta Fed both mentioning that they were open to raising interest rates if inflation fell less than expected. Affected by this, U.S. stocks continued to adjust at a high level, and many large technology companies continued to fall, but popular Chinese concept stocks performed strongly.
Domestically, the mainland's economic data for the first quarter of 2024 revealed that GDP growth reached 5.3% year-on-year, and investment in service consumption and high-tech industries grew rapidly, and the economy achieved a good start.
In terms of economic data in March, in terms of social finance data, new social finance and RMB credit both increased year-on-year in March, and the growth rate of social finance declined, while medium and long-term loans to households and enterprises both increased slightly year-on-year, reflecting that the current recovery of domestic financing demand is not stable and needs to be further boosted by the demand side after the implementation of policies. In terms of export data, in the context of a high base in 2023 and a higher export growth rate in February 2024, the export growth rate in March 2024 was lower than market expectations, but the export growth rate in March was not low based on the high base, the actual export value and the performance of the entire first quarter.
With the disclosure of the 2023 annual report and the first quarter of 2024 earnings forecast, the improvement in free cash flow due to the downside in capital expenditure will be further recognized, and the top performing stocks represented by growth will be worth paying attention to.
The trend of the "China Special Valuation" sector is good
Judging from the constituent stocks of the Brand 100 Index last week, the performance of "China Special Valuation" is extremely eye-catching. CRRC and China CITIC Bank both rose by more than 10% in the week, reaching 15.04% and 12.19% respectively, China Communications Construction, China Pacific Insurance and Baosteel also rose by more than 9% in the week, in addition, nearly 20 stocks such as China Railway Construction, China Unicom, China Construction and China Power Construction also rose by more than 5%.
According to public information, as a leading enterprise in the world's rail transit equipment, CRRC has accelerated the expansion of overseas markets, and the Hungarian-Serbian railway high-speed EMU project was officially signed, and China's high-speed rail was exported to Europe for the first time to achieve a major breakthrough. The first overseas "System+" project, the overall modernization project of Mexico City Metro Line 1, was officially put into operation. With the recovery of investment in the rail transit industry + the arrival of the overhaul cycle + equipment replacement, the slope center of CRRC is expected to rise and enter the accelerated growth channel.
The rail transit equipment sector has experienced the market interpretation driven by the early equipment renewal policy, and is about to enter the stage of fundamentals and performance-driven valuation, with the approach of the bidding season in May ~ June, the industry is expected to open a new round of prosperity.
Guided by the "342 Strong Nuclear Action Plan", China CITIC Bank has worked closely around its three core competencies of wealth management, asset management and comprehensive financing, and has achieved good operating results. At the same time, the company's asset quality has been improving quarter by quarter since the third quarter of 2020, and 11 quarters of non-performing indicators from the fourth quarter of 2020 to the fourth quarter of 2023 have achieved "double decline". As a listed central enterprise, driven by the policy logic of "China Special Valuation" and the business logic of "stable release of performance", there is still room for repair in the follow-up valuation of China CITIC Bank.
In addition, China Communications Construction Co., Ltd. is one of the leading enterprises in mainland China's infrastructure construction to go overseas, and its overseas business may benefit from the rapid growth of the "Belt and Road" orders. At the same time, the "trillion national bonds" to support the infrastructure boom, and the transformation of urban villages to release the increase in domestic demand, will improve the company's profitability.
Central enterprise dividend ETFs can be followed
In addition to the outstanding investment value of individual stocks, central enterprises and central enterprise dividend ETFs are also worth paying attention to, such as China State-owned Enterprises ETF (517180) and Central Enterprises Dividend ETF (561580), which have been strong recently.
From the perspective of investment logic, the core of the revaluation of state-owned enterprises lies in rationalizing the management and incentive mechanism and improving the performance of operating indicators. With the deepening of the reform of state-owned enterprises, the value creation orientation of central enterprises has gradually become clear, and the assessment of the operating indicators of central enterprises in 2023 will be upgraded from "two interest and four rates" to "one interest and five rates", and the assessment of ROE and operating cash ratio will be strengthened, so as to guide central enterprises to improve quality and efficiency, and the valuation level will be closer to the evaluation standards of the capital market.
In 2024, the State-owned Assets Supervision and Administration Commission (SASAC) will clearly include the effectiveness of market value management in the assessment of the heads of central enterprises, and the assessment objectives and objects will be clear, which will promote the active actions of central enterprises in market value management, and some listed central enterprises will have room for valuation release. With the release of the new "National Nine Articles", "Dividend+" has also ushered in a long-term valuation reshaping.
It is understood that the China State-owned Enterprises ETF (517180) tracks the FTSE China State-owned Enterprises Open and Win-Win Index. The index is a stock index focused on Chinese state-owned enterprises and is published by FTSE International Limited. The index is designed to reflect the performance of state-owned enterprises listed in the mainland and Hong Kong, with a focus on globalization and sustainable development.
From the perspective of the concept of index constituent stocks, the index has a high exposure to the concepts of central enterprises, "medium special valuation", central enterprises, and central enterprises, and has the characteristics of good liquidity, large market capitalization, and strong leading attributes;
The Central Enterprises Dividend ETF (561580) tracks the CSI Central Enterprises Dividend Index, which selects 50 securities with high cash dividend yield, relatively stable dividends, and a certain scale and liquidity from central enterprises as index samples, reflecting the overall performance of medium and high dividend yield securities of central enterprises.
National Business Daily