The face slap market came too fast~
In the first quarterly report, many fund managers paid attention to dividends.
"The A-share market is expected to transform into a dividend-based investment market",
"The market's focus on dividends and buybacks is actually one aspect of the company's free cash flow capacity, and we believe that the value of the company ultimately lies in the ability and sustainability to create free cash flow."
"At the current valuation, the dividend value style can still find a good investment opportunity"...
There are many people who practice it,
More than 600 funds bought Midea and Yangtze Power into the top 10 heavy stocks, which is the first time in the past few years that the value market has continued.
But I didn't expect that last week suddenly ushered in a sharp rise in core assets, and I slapped my face~
Hong Kong stocks,
Hang Seng Technology rose 13.43%, and Hang Seng Medical rose 11.21%.
A shares,
Electronics rose 5.21%, pharmaceuticals rose 4.43%, and food and beverages rose 4.01%.
The value sectors that performed better before, coal fell 7%, petroleum and petrochemical fell 3.57%, nonferrous metals fell 2.64%, and utilities fell 1.05%.
01
Why did the core assets suddenly go up?
Look at the changes in the market,
This wave of market began with Hong Kong stocks.
Last Monday, Tuesday and Wednesday, Hang Seng Technology and Hang Seng Medical rose sharply for 3 consecutive days. During the same period, the core assets of A-shares were mainly volatile and adjusted.
The turning point came last Friday,
Hang Seng Technology rose 4.61% and Hang Seng Medical rose 2.28%, driving the core assets of A-shares to explode in an all-round way, with the ChiNext index rising 3.34% and the Science and Technology Innovation 50 rising 2.28%.
Today, although the leader of Hong Kong stocks rose and fell back and temporarily shut down, the core assets of A-shares took over the baton and continued to soar.
The ChiNext index rose 3.5%, the STAR 50 rose 3.18%, and the Shanghai Composite Index also returned to above 3,100 points.
Why are Hong Kong stocks rising?
There are several advantages:
The first is policy. Last Friday (19 April), the China Securities Regulatory Commission (CSRC) announced five measures for cooperation with Hong Kong, including the relaxation of the scope of ETF products, the inclusion of REITs, the support of RMB trading counters, the enhancement of mutual recognition of funds, and the smooth listing and financing channels.
The second is the return of foreign capital. According to the data tracked by Soochow Securities, foreign capital continues to retreat from the Japanese and Indian stock markets, while Hong Kong stocks undertake this part of the funds.
The third is the continuous purchase of southbound funds. Since February 7, only one day of southbound funds has been net selling, and all other times are net buying.
Fourth, it is related to the expectation of China's economic recovery. Economists polled by Bloomberg expect China's GDP to grow by 4.8% in 2024, up from 4.6% forecast last month.
If you have to rank it, I am afraid that the return of foreign capital is the most important reason. Taking this as a breakthrough point, Hong Kong stocks were detonated, and then spread to A-shares, forming a prairie fire of core assets.
really responded to Mr. Daxiao's words: Save Hong Kong first~
02
Core assets have risen sharply, and the ensuing questions are:
Is the market style going to switch?
Don't switch, let's take a look at the history.
The green line is "800 growth/800 value", going up is growth outperforming value, and going down is value outperforming growth.
The bull market for core assets in 2019-2021 was exceptionally magnificent, with growth significantly outperforming value, and the green line hitting a new high.
But the ensuing correction was also disastrous, with the green line hitting a new low, lower than at the end of 2018.
In this position, do you think there is a possibility of "style switching"?
exists,
The growth sector has been in the doldrums for so long that it only takes a fire, or a reversal of a few key expectations, for a big rally to emerge.
Taking the Hang Seng TECH Index as an example,
From March to June 2022, it rebounded by 47%. This rebound can be defined as an over-falling rebound, in early 2022, the Russia-Ukraine conflict, Omicron, etc. caused the stock market to plummet, Hong Kong stocks bottomed out on March 15, A shares bottomed out on April 26, and then began a wave of rebound that lasted for 2 months.
From October 2022 to January 2023, the Hang Seng Tech Index rebounded by 72% due to the relaxation of epidemic prevention and control.
If it falls too much, it will rebound, and the key expectation change will also rebound, and it may even come out of an uptrend.
How's this wave?
It did fall a lot,
Before the Chinese New Year, Hang Seng Technology was one step away from the lowest point in October 2022, and Hang Seng Medical was 22% lower than the lowest point in October 2022.
A-shares, new energy, medical care, and consumption are also at a low level, and there is a demand for an over-fall rebound, so as soon as foreign capital returns, a joint force is immediately formed and a big rebound.
As for whether it can get out of the uptrend?
It depends on whether the key expectations have changed.
Let's go back to the classic analytical framework.
股价（P） = 业绩（EPS） * 估值（PE）
Performance is related to fundamentals. For Hang Seng Technology, Hang Seng Medical, and A-share core assets, the business is mainly in Chinese mainland, and the performance is related to China's economic fundamentals.
Valuation, Hong Kong stocks are dominated by US dollar liquidity, and after the interconnection of A-shares, the impact of the US dollar tidal cycle on white horse blue chips is also increasing.
In the past few years, the core assets of Hong Kong stocks and A-shares have been so miserable.
First, the domestic economy has affected profitability;
Second, U.S. Treasury yields have continued to rise, affecting valuations.
Earnings and valuations.
Looking to the not-too-distant future, will expectations for these two important factors be radically reversed?
03
The above is the analysis process,
Analysis may not be accurate, it may be right or wrong, but it helps us sort out our thinking and find a way to deal with it.
Before we do, ask ourselves a few questions:
Core assets have been falling for so long, do you say it's cheap?
Cheap.
But will the cheaper go up?
I can't remember how many times my hopes have been disappointed...
So, will it really get up this time?
Because it's cheap, if you bet on "going up", it makes sense logically, as long as you don't let go, you can eat a big market.
The risk taken is that "hope is disappointed again", the paper income evaporates again, and psychologically has to endure another "roller coaster" torture.
If you are willing to bear this consequence and your confidence in the core assets is still there, then "hold it firmly, and do not let go if it does not rise to the psychological price" is the best choice.
Here is also the trend chart of Hang Seng Technology,
It fell from 10945 to 2802, a decrease of 74.4%.
Now, it has only rebounded to 3735, up 33% from the low, but if it can return to the high, it can rise by another 193%.
If there is really a big market behind, this is just the beginning~
The other scenario is that you don't have that much confidence in your core assets and don't want to go back and forth on a rollercoaster ride anymore.
The current rise in core assets actually gives an opportunity for asset rebalancing.
Wrote about bonuses many times before,
Is the dividend valuation high?
Unhigh.
Is the transaction crowded?
No need to squeeze either.
In the past few years, although dividends have significantly outperformed core assets, it has been achieved in the form of "dividends fluctuate sideways and core assets plummet".
At present, whether it is valuation, transaction congestion, or the certainty of future dividends, there are still opportunities for dividends, and it is not difficult to earn an average dividend of about 5% per year.
If key expectations are not reversed, do you think it is impossible to "ride another roller coaster"?
There is also this possibility.
So, whether to go or stay at this time depends on your attitude.
Based on the logic of "the valuation is cheap, it can rise back in the future", it is the best choice to hold firmly and not let go if it does not rise to the psychological price.
Based on the logic that "the macro environment has not fundamentally changed, the current rise is more of a rebound resonance on the capital and emotional side, and it may be a roller coaster ride in the future", it is also a good choice to take advantage of the rise to rebalance assets.
In addition to the two good choices,
The more you rise, the more uncomfortable you feel, afraid of stepping into the air, and then chasing into it, this is the best way to deal with it~~
Disclaimer: The content of this article is for informational purposes only and does not constitute investment advice