China Life Security Fund
Latest Perspectives:
China Life Security Fund: Continue to shrink and adjust
In the bond market, the central bank continued to release signals and clarify the lower limit of interest rates. On July 1, the central bank announced that it was ready to borrow bonds, and the market interpreted it as the central bank was ready to borrow bonds to sell, and then intervene in the market, and the yield rose rapidly, and the 30-year treasury bond rose by about 8BP in the day. However, the pattern of loose liquidity and weak financing demand in the market has not changed, so yields have fallen after the short-term shock brought by the central bank. The central bank officially launched borrowing on Friday, and the lower limit of the interest rate was clear.
In terms of fundamentals, the PMI was flat in the previous month, still below the boom and bust line, and the supply and demand structure is still poor. PMI production is better than new orders. And the inventory of finished products has risen significantly, reflecting the characteristics of passive inventory replenishment. PMI prices have declined, and prices are still easy to fall and difficult to rise in the case of oversupply in the economic pattern. In terms of real estate, after the 517 real estate new policy, Shanghai's transactions have improved significantly, mainly due to the release of demand after the release of single purchase restrictions, but the stabilization of prices needs to be further observed. First-tier cities performed better than other cities, and second-hand homes performed better than new ones.
In terms of liquidity and policy, the cross-quarter funding is relatively loose, and the yield on certificates of deposit has fallen significantly before and after the cross-quarter. However, the central bank announced that "in order to maintain the steady operation of the bond market, on the basis of prudent observation and assessment of the current market situation, the People's Bank of China has decided to carry out treasury bond borrowing operations for some primary dealers in the open market in the near future." "Raising concerns about central bank bond selling. The central bank's 2.50% interest rate mark, mentioned in the Financial Times on 23 April and 30 May, also became a line of concern for the market, which was breached in June. The central bank has a clear policy increase on April 23 and July 1, from the regular meeting to the Financial Times on April 23, and from the bond sale declaration to the debt operation on July 1, so the current market has formed a new lower limit of 2.4% for 30-year treasury bonds, and 2.4%-2.5% is the central bank's close observation area.
China Life Security Fund believes that, on the whole, there are currently problems of economic overcapacity and financial oversupply, and the downward trend of medium and long-term interest rates is strong, and the market is concerned about fluctuations in the downward process. In July, the funding rate fell seasonally, wealth management rebounded seasonally, market factors formed an upper limit, and the central bank set a lower limit, so it may fluctuate in a range, and the short and medium end may perform better. The impact of the central bank is short-lived, and it is necessary to pay attention to the issuance pressure brought by the issuance of local bonds in August.
In terms of the stock market, last Wednesday, the three major indices continued to shrink and adjust, and important indices generally fell, with the ChiNext Index and the Shenzhen Component Index both falling by more than 1.5%, and the Shanghai Composite Index relatively resistant, with the average daily trading volume of all A shrinking by 55.3 billion yuan to fall back to the level of 610.8 billion, and the trading volume of the last three trading days was less than 600 billion. CSI Dividend closed up against the trend, and the core blue-chip index was relatively resistant to decline under the support of high dividend weight, led by the double-creation and small-cap indexes. Specifically, the market risk appetite is still under pressure, which is reflected in the lack of focus on capital trading, the blurred main line, and the lack of willingness of traders to relay active themes, and tend to choose the over-falling sector, and a small number of active funds began to play low-priced stocks and ST shares. Specifically, non-ferrous metals, commerce and retail, steel, public utilities, and real estate led the gains, while industries such as national defense and military industry, machinery and equipment, beauty care, power equipment, and electronics were among the top decliners.
The equity market has returned from "expectations" to "reality", asset pricing has re-anchored, risk appetite has fluctuated at the bottom, and the expected verification of reform policies, whether land production prices can stabilize, and whether overseas demand can continue will be the focus of pricing logic. The large-scale upside space has not yet been opened, and it is still dominated by transactional opportunities, and after the chips are fully exchanged, we can still look forward to new main lines and index resonance repair opportunities. From a domestic point of view, the central bank issued an announcement on open market business, pointing out that in order to maintain the steady operation of the bond market, on the basis of prudent observation and assessment of the current market situation, the People's Bank of China has decided to carry out treasury bond borrowing operations for some primary dealers in open market business in the near future. The central bank's borrowing of bonds will have the effect of withdrawing the same amount of funds, which is expected to have a certain impact on the long-term interest rate of treasury bonds in the short term. Overseas, the U.S. added non-farm payrolls in June slightly more than expected, but the previous value was revised sharply downward, and the unemployment rate rose again. The performance of the U.S. employment structure largely matches recent economic data, i.e., a slowdown in manufacturing and consumption. The U.S. labor market continues to cool, but remains resilient.
Yan Dong of Penghua Fund
Latest Perspectives:
Expectations of interest rate cuts have weighed on the dollar again, with the commodity resources sector leading the rally again
First, the market review
In the past week, A-shares rose first and then fell, and the Shanghai Composite Index continued to hover below the 3,000 level. In the first half of the week, on the one hand, as the manufacturing PMI was still below the boom and bust line at the end of last week, the risk appetite of funds decreased, and more people poured into the high dividend sector; On the other hand, the transaction volume of second-hand houses in Beijing, Shanghai and Shenzhen hit a new high, which is conducive to improving the market's expectations for follow-up real estate, and the rise of heavyweight stocks as a whole drove A-shares to stand at 3,000 points. In the second half of the week, the RMB exchange rate once touched 7.31 and the European Union's tariffs on Chinese electric vehicles will take effect on July 5, investors' risk appetite continued to be sluggish, and the equity market fell as a whole. In terms of industries, nonferrous metals, commerce and retail, steel, public utilities, and oil and gas sectors were among the top gainers, while national defense, machinery and equipment, power equipment, liquor, electronics and other sectors were among the top decliners, falling by more than 3%.
数据来源：Choice，截至2024.7.7。
Second, domestic and foreign macro
Event: On July 1, the People's Bank of China (PBOC) announced that it would carry out treasury bond borrowing operations in the near future, and would borrow treasury bonds in an indefinite term and credit manner, and would continue to borrow and sell treasury bonds depending on the operation of the bond market.
Real estate: The transaction volume of second-hand houses in Beijing, Shanghai and Shenzhen all expanded in June, of which the number of units traded in Shanghai and Beijing hit a new high this year. The number of second-hand housing transactions in Shanghai in June was 26,376 units, an increase of 44% month-on-month, exceeding the new high of Xiaoyangchun at the beginning of the year, mainly because the housing purchase policy adjusted in May had a certain effect. The number of second-hand housing transactions in Beijing in June was 14,987 units, an increase of 12% month-on-month, and also a new high in the year. The number of second-hand housing transactions in Shenzhen in June was 4,249, an increase of 2% month-on-month. Last week, the transaction area of new houses in 30 cities was 2.771 million square meters, down 26.9% month-on-month and up 21.5% year-on-year. Under the situation of a low base in the second half of 2023, it is expected that the year-on-year growth in the second half of this year is expected to turn positive in some time periods.
Overseas: U.S. employment and ISM manufacturing PMI data weakened, interest rate cut expectations rose, and the shock of Trump's election heating up last week was partially reversed, and stocks and bond traders were generally good. The Nasdaq rose more than 3%, the U.S. Treasury 10Y yield fell by 8 bps, gold and crude oil all rose more than 2%, the U.S. dollar index fell nearly 1%, and non-U.S. currencies took a breather. The global manufacturing PMI remained at a high level in June, and emerging markets were still better than developed markets. Retail consumption continued to improve marginally, but the absolute level was not strong. Vietnam's GDP grew by 6.9% in the second quarter, a two-year high. The growth rate of European CPI fell further in June.
The United States added 206,000 non-farm payrolls in June, with an expectation of 190,000 and a previous value of 272,000, and the unemployment rate was 4.1%, with an expectation of 4% and a previous value of 4%. While the number of new non-farm payrolls in June was better than expected, the number of non-farm payrolls in the previous two months was revised downward by 111,000, and the divergence with the household survey data has narrowed, collectively pointing to a slow cooling of the labor market. The unemployment rate rose to 4.1% in June, the highest since November 2021. The combination of non-farm payrolls and unemployment data has led to renewed interest rate cut expectations.
数据来源：Choice，截至2024.7.7。
3. Commodity resources sector
Domestic: crude oil, Shanghai gold, rebar, Shanghai copper, weekly gains and losses of 1.01%, 1.54%, 1.39%, 2.71%; Global: Brent crude oil, COMEX gold, LME copper, LME aluminum, CBOT soybeans, weekly gains and losses were 0.15%, 2.29%, 3.51%, 0.40%, and 2.33%, respectively.
Oil & Gas: Over the past week, a combination of geopolitical risks and the demand outlook has driven oil prices higher. On the demand side, API crude oil inventories and EIA crude oil inventories in the United States fell in the week to June 28, much more than expected. At the same time, Powell said that significant progress has been made in reducing inflation, the number of new non-farm payrolls in the United States in June fell sharply from the previous value, the unemployment rate unexpectedly rose, and the market expectation of interest rate cuts was boosted, further raising the expectation of crude oil demand. In addition, on the supply side, concerns about U.S. Hurricane Berrell disrupting oil production in the U.S. and the Gulf Coast, rising tensions between Israel and Allah in Lebanon, and an increase in crude oil geopolitical premiums further supported oil prices.
Gold: Prices rose sharply, on the one hand, tensions in the Middle East continued to rise, geopolitical instability increased the demand for gold safe-haven, on the other hand, a number of economic data in the United States were weak, ISM manufacturing, service PM and other data to promote the increase in interest rate cut expectations, U.S. Treasury yields downward, driving gold prices up.
Chemical: The operating rate of polyester filament fell last week, and the price spread continued to rise. Wanhua Chemical's POE project was successfully started up at one time, and in addition, the company plans to expand the production of IPDI and IP. The industry has been in a downward trend for about two years, and the price-to-book ratio of basic chemicals is currently at the lowest quantile since 2012, while the industry's profitability is also at a low level, and the risk of valuation and profitability continuing to decline is small. The capital expenditure of listed companies in 1Q24 decreased year-on-year, and the industry-wide investment continued to grow from January to May, but the growth rate began to decline. On the demand side, the impact of domestic real estate is gradually weakening while the demand in other areas continues to grow, the U.S. manufacturing replenishment and the growth of demand in emerging economies are expected to drive the increase in exports, and it is expected that the inflection point of the industry cycle is expected to gradually approach, and we are optimistic about the allocation opportunities of the chemical sector in the medium and long term.
数据来源：Choice，截至2024.7.7。
Tao Can of CCB Fund
Latest Perspectives:
Electricity hits a new high, can high dividends still work?
Hello everyone, I am Tao Can of CCB Fund, everyone calls me Brother Volcano, the market has fluctuated a lot recently, what will happen to the market outlook? Here are some of my points of view, welcome to exchange and follow.
Today's market weakened again, but the power sector strengthened against the market, and the high-dividend style continued to strengthen.
Reasons for the previous callback:
1. Profit-taking and valuation adjustments
Excessive gains in the short term: A number of high-dividend sectors, including coal, oil and gas, have accumulated large gains in the short term, which has led to the accumulation of a large number of profit-taking orders in the market. When these profit-taking orders choose to sell, a large selling pressure will be formed, which will trigger a decline in the sector.
Valuation adjustments: As the stock price rises, the dividend yield gradually decreases. For investors with a high dividend style, a reduction in dividend yield can make their investment attractive, triggering outflows and falling stock prices.
Second, changes in the market environment
Market Style Switching: Market style may change over time. When the market's risk appetite decreases, investors may be more inclined to high-dividend stocks that seek better yields. However, when the market's risk appetite increases, investors may shift their money to other more growth sectors, leading to outflows and lower share prices in high-dividend stocks.
Macroeconomic and policy factors: Changes in the macroeconomic environment and policy adjustments may also have an impact on the high-dividend style. For example, changes in interest rates and adjustments in monetary policy may affect the flow of funds in the market and investors' risk appetite, which in turn will have an impact on the stock prices of high-dividend stocks.
The layout and investment logic of the market outlook is as follows:
Hedging demand: In the case of high market volatility, high-dividend stocks are favored by investors due to their better dividend income. Especially with risk-free rates expected to hit record lows, the relative attractiveness of high-dividend stocks will increase even further.
Valuation advantage: The current valuation level of the dividend strategy is still at a historically low level relative to that of all A, and it has a certain valuation cost performance. In addition, the dividend yields of some high-dividend stocks have gradually risen to attractive levels.
Future outlook
Long-term trend: Historically, dividend strategies have been effective in both U.S. and A-shares. In the future, with the economic recovery and the improvement of the market environment, the high-dividend style is expected to continue to attract the attention of investors.
Yang Delong, Qianhai Open Source Fund
Latest Perspectives:
Yang Delong: Real wealth comes from holding high-quality assets over a long period of time, rather than frequent buying and selling transactions
On Monday, the Shanghai and Shenzhen markets continued to fluctuate and adjust, and the recent market has repeatedly fluctuated between 2900~3000 points, indicating that the market is still divided between long and short, and the market also needs to wait for more incremental funds to return to 3000 points to regain its upward trend. On Monday, most of the plates fluctuated and adjusted, and the recent trading volume also continued to shrink, and the trading volume of the Shanghai and Shenzhen markets was about 600 billion recently, which was discounted by six compared with the trillions of transactions during the peak period, indicating that the market will shrink in the process of decline, and investors are not willing to enter the market, and many high-quality companies have fallen sharply compared with the high point three years ago, fully releasing this risk.
On the one hand, we see that the short-term market trend is not optimistic, and the market is still shrinking and adjusting, but from the perspective of medium and long-term layout, it is now ushering in a better opportunity for layout. Investment is to invest in the crisis, which is also a famous saying often said by the folk stock god Lin Yuan, only when the market falls irrationally, when there is a crisis, there will be a good price to buy good assets.
Of course, in order to reverse the current market trend, in the long run, it is necessary to support economic recovery through policy adjustments, through active fiscal policy and loose monetary policy, and at the same time introduce a series of policies to support the development of all walks of life to boost investor confidence, which is the fundamental way. In the short term, because the market trend is relatively sluggish, so at this time, from a short-term point of view, it is necessary to give the market a certain amount of financial support, that is, through the national team to increase the intensity of entering the market, recover the 3000 integer mark, and not only to support the bottom 3000 points, but also to further pull up to form an upward trend, because the market can only completely reverse the market decline and attract over-the-counter funds to enter the market only if it forms an upward trend and completely changes the downward trend.
One of the things I often say is that the market is never short of money, the key is a lack of confidence. How to improve investor confidence, on the one hand, is to introduce active support policies to promote the development of private enterprises, create more jobs, promote the rebound of investment growth, create more investment opportunities, and at the same time increase consumption by increasing residents' wage income and property income. On the other hand, it is to directly reverse the downward trend of the market through the intervention of external forces, forming an upward trend, and not only to increase the holdings of large-cap index ETFs such as CSI 300 but also to increase the money-making effect formed by ETFs such as CSI 500, CSI 1000 and ChiNext indexes, so that over-the-counter funds will enter the market.
In the past three years, the new residents' deposits have reached 60 trillion yuan, and in the first five months of this year, they have increased by 9 trillion yuan, and these funds can only get a low return of 1%~2% in bank deposit accounts, and they have been waiting for opportunities to invest. Now there are not many opportunities in the property market, and the investment risk is also increasing. The opportunity in the future is actually in the capital market, but most investors buy up and not buy down, like the right side of the entry, only when the market forms an upward trend, the formation of the right side of the opportunity to open a position, these funds will come in, at this time through the national team to increase the intensity of the market to pull up.
Once the market has formed an upward trend, there is no need to worry about the funds not coming in, because investors are actually facing an asset shortage now, that is to say, there are not many good assets and assets that can make money. Some time ago, the first batch of ultra-long-term treasury bonds were issued, and the winning interest rate was only 2.57% / year, and the yield of 2.57% a year has attracted many investors to invest, and even the phenomenon of seconds, which shows that investors do not have too many good investment assets to invest in, and now the capital market has actually formed a better investment opportunity after the early decline, but now due to everyone's confusion about the future, worries about policy uncertainty, so there has been no entry. Once it is clear that contractionary policies will no longer be introduced in the future, but policies to support the development of the industry will be continuously introduced, everyone's confidence will slowly return. From the perspective of the capital market itself, A-shares are now clearly differentiated from the world's major capital markets, and the horn of this differentiation is getting bigger and bigger. Once the market reverses, the A-share market may usher in an opportunity for a retaliatory rebound, but this requires external forces to intervene to boost everyone's confidence.
In the face of the current market downturn, I would also like to share with you how some famous investors have survived. Mr. Lin Yuan's golden rule in investment is the combination of monopoly and consumer addiction, which constitutes the cornerstone of his investment success, and the wise choice of investment is those rigid industries that are closely related to people's daily diet, because appetite is an eternal demand. Simplifying business operations, focusing on the unique advantages of core products is the key to business success, and the stability or growth of gross profit margin is an important indicator of the healthy development of enterprises, it reflects the profitability and market competitiveness of enterprises, the market is fluctuating or falling most of the time, only a short period of 5% rapid rise determines the success or failure of investment, but if it does not include 95% of the shock period, it is difficult to seize the opportunity of 5%, that is to say, the future market comes, The real money can be made by investors who are already in the market, not those who are indifferent, and the real wealth comes from holding high-quality assets for a long time, rather than frequent buying and selling transactions.
In the past month, I have attended the shareholders' meetings of many high-quality companies, and I have met hundreds of value investors who have achieved financial freedom by holding high-quality companies for a long time, regardless of short-term stock price fluctuations. Although the A-share market has been up and down over the past decade, with far fewer people making money than losing money, there are still a group of people who have achieved significant wealth growth through value investing, and they go to shareholders' meetings every year instead of watching the market on a daily basis.
This Saturday, I attended a forum held by a brokerage firm, and I had the honor to give a speech on the same stage with Mr. Yu Yongding, a former member of the Monetary Committee of the Central Bank, and learned a lot of knowledge about monetary policy and fiscal policy adjustment from him, and benefited a lot. I also met an old fan who has been following me for more than ten years, an investor from Nanjing, and I was shocked by his investment achievements. He published a book last year about the investment journey of value investing, and I was asked to write a testimonial, which is now selling very well. Judging from his investments over the years, it is indeed through value investing, by buying good assets when the market is panicking, and reducing positions when there is a bubble in the market, to achieve a substantial increase in wealth. It is understood that he has invested about one million principals before and after, and now the account has broken through a small goal. The example of these successful investors is to let everyone see hope and confidence in the market downturn, and not be distracted by all kinds of negative news and negative emotions.
Lin Yuan has also said many times that it is undoubtedly a blessing to have high-quality resources, which are not only scarce, but also a source of wealth, and we can learn a lot from these successful investors. The wisdom of the ancients is also for us to continue to learn from the successful, not always complaining, pessimistic and disappointed. Warren Buffett also advises us to socialize upwards and learn from those who are much better than ourselves, so that we can continue to improve. Your level of investment, your level of cognition, is basically about the same as the average of the three people you interact with the most on a daily basis, which is worth pondering.
Introduction
On the whole, in terms of the equity market, the first half of the year was still in a state of bottom range shock, and structural differentiation continued. As the cycle lengthens, the equity market may already be at the bottom of the long cycle, and in the future, it may be able to grasp more investment opportunities with a positive attitude. In terms of the bond market, the overall easing of funds after the cross-quarter period is still strong, and the two important meetings to be held in July may also affect the expectations of the bond market, and there are still more structural opportunities worth tapping. Looking ahead, what are the investment opportunities in active equity, fixed income, quantitative indices and multi-asset sectors that are worth paying attention to and grasping? Let's listen to the in-depth views and investment research judgments of Penghua's fundamental investment experts.
Yan Siqian, General Manager/Investment Director of Equity Investment Department III of Penghua Fund
There may be a shift in market style after August, and there may be opportunities for technology and growth stocks. In the medium and long term, science and technology will still be the key direction of economic transformation, and policies will continue to be introduced. In the medium and long term, new energy and new power systems are the general trend of global development, and the leaders of the main new energy industry chain will usher in the bottom opportunity.
The yield of 10-year treasury bonds hit a new low, further reflecting the downward expectation of the return on long-term assets of the whole society, and the short-term policy continued to exert force, but the results were good, and the value of high-dividend asset allocation continued to be highlighted. In terms of policy, it will continue to support, the purchase restrictions in many places of real estate continue to be relaxed, and the Third Plenum is expected to make efforts in the direction of taxation and electricity reform, which is good for the direction of pro-cyclical and policy support. However, external uncertainties, such as the US election and Indonesia's introduction of 200% tariffs, have further increased concerns about overseas tariffs and exports. Incremental funds in the broader market are limited, and value stocks are expected to continue to dominate in July. In July, we began to enter the semi-annual report performance period, focusing on stocks with low valuation performance exceeding expectations. During the interim reporting period, it is expected that some central state-owned enterprises will carry out secondary dividends, which is also worth paying attention to. In our view, there may be a shift in market style after August, and there may be opportunities for technology and growth stocks. In the medium and long term, science and technology will still be the key direction of economic transformation, and policies will continue to be introduced. The world is also in the technology cycle, with the proportion of global technology market capitalization/revenue led by AI rising, and the global technology cycle is also at the bottom of the inventory cycle, and the fundamentals of the mature technology field are also showing an inflection point. China is in a transition period when new quality productivity has become the engine of economic growth, and the growth direction continues to be optimistic about AI and technology-related opportunities, such as AI computing power, semiconductors, Apple industry chain, ARVR, new energy and new technologies, unmanned driving, humanoid robots, satellite Internet, low-altitude economy, etc. The main industrial chain of new energy is affected by overcapacity and trade frictions in the export chain, and there is still uncertainty in the fundamentals, and the stock price has been falling for 2 years or more. In the medium and long term, new energy and new power systems are the general trend of global development, and the leader of the main industrial chain of new energy may usher in the bottom opportunity.
Jin Xiaofei is the deputy general manager of the second equity investment department of Penghua Fund
Structurally, we are optimistic about the sectors in the compound, such as traditional Chinese medicine, blood products, generic drugs, innovative drugs, devices, etc.; At present, our position is still concentrated in innovative drugs, which is the most optimistic sector in the new pharmaceutical cycle in the future, and is currently constrained by the sluggish risk appetite of the industry and its performance is weak. The pharmaceutical sector has experienced a long-term sharp decline, especially in the second quarter, the institutions in the market have significantly reduced their positions, the chips have been further cleared, and the follow-up sector is expected to gradually stabilize, and we are still optimistic about the development of the innovative drug industry and the elasticity of stock prices.
Pharmaceuticals fluctuated and fell throughout the second quarter, and there were not many opportunities in the sector. Structurally, we are optimistic about the sectors in the compound, such as traditional Chinese medicine, blood products, generic drugs, innovative drugs, devices, etc.; At present, our position is still concentrated in innovative drugs, which is the most optimistic sector in the new pharmaceutical cycle in the future, and is currently constrained by the sluggish risk appetite of the industry and its performance is weak. The pharmaceutical sector has experienced a long-term sharp decline, especially in the second quarter, the institutions in the market are significantly reducing their positions, the chips are further cleared, and the follow-up sector is expected to gradually stabilize, we are still optimistic about the industrial development and stock price elasticity of innovative drugs.
Yang Fei is the deputy director of the equity investment department of Penghua Fund
Optimistic about the overall performance of the market in July, in which the technology sector will have significant excess returns. domestic industrial policies support the digital economy led by artificial intelligence; Overseas artificial intelligence technology leads the world, and AI technology continues to iterate rapidly; Artificial intelligence is also an area where a large amount of global capital continues to gather, so we are firmly optimistic about the continued investment opportunities in the AI-led technology sector.
Optimistic about the overall performance of the market in July, in which the technology sector may have significant excess returns. The domestic and foreign capital markets will continue to maintain a high risk appetite due to the slow recovery of the domestic and foreign macroeconomy, the liquidity remains abundant, especially the market expectation of the U.S. economy is stable before the U.S. election. domestic industrial policies support the digital economy led by artificial intelligence; Overseas artificial intelligence technology leads the world, and AI technology continues to iterate rapidly; Artificial intelligence is also an area where a large amount of global capital continues to gather, so we are firmly optimistic about the continued investment opportunities in the AI-led technology sector. In the field of artificial intelligence, computing power is led by NVIDIA, C-end applications are led by Apple, and B-end applications are led by Microsoft. In the medium and long term, only leading companies with core competitiveness within technology stocks will have the opportunity to share this technology feast, and we believe that the leading companies must have the characteristics of being far ahead in China and strong competitiveness overseas. At present, the main line of global technology investment is basically focused on the field of artificial intelligence, and in addition to artificial intelligence, there is also a main line of domestic substitution investment in China, so we are most optimistic about artificial intelligence and domestic substitution. Artificial intelligence consists of two main lines: one is the NVIDIA industry chain, which is mainly AI computing power; The other is the Apple industry chain, mainly the AI intelligent terminal industry chain, and the main line of domestic substitution is mainly concentrated in semiconductor equipment platform companies and industrial automation platform companies. In terms of industry configuration, we are optimistic about electronics (Apple industry chain, semiconductors, AI servers, PCB, etc.); communication (optical module, etc.); Computers (industrial automation, such as large PLCs and industrial robots, etc.).
Zhang Huaen is the fund manager of the research department of Penghua Fund
There is no doubt that the current equity market is already in the bottom range of the long cycle, although the time to grind the bottom will be longer, but in terms of investment, we still hope to be able to respond with a positive attitude, to find companies that can accumulate strength at the bottom and are expected to continue to hit new highs in the future profit center to layout.
In the first half of the year, the equity market was still in a state of bottom range shock, and structural differentiation continued. One of the key changes in the market this year has been the gradual return to pricing effectiveness, with earnings growth and high-quality factor-driven excess returns increasing in addition to dividend assets, making active investing more proactive. At the macro level, although the large beta is still weak, some positive changes in the structural direction are still valuable, whether it is following the growth of overseas demand, or the release of the industry's own stock renewal demand after long-term adjustment, many areas have begun to show more bottom characteristics.
From an investment perspective, there is no doubt that the current equity market is already in the bottom range of the long cycle, although the grinding time will be longer, but in terms of investment, we still hope to be able to respond with a positive attitude, to find companies that can accumulate strength at the bottom and are expected to continue to hit new highs in the future profit center to layout. In terms of direction, we will focus on the following areas: first, in the consumption and manufacturing industry, there is really an opportunity to go out in the direction of going overseas, although there are external uncertainties such as trade frictions, but in the long run, it is still an important source of increment; Second, the industry pattern in some areas of the traditional industry is in a state of further optimization, and the leading companies with strong product potential and operational capabilities have more obvious advantages, and there is a possibility of further improvement in share and profitability; The third is the release of the renewal demand of part of the stock equipment market, the last round of domestic capital goods investment peak in 2016-2020, the current many equipment have entered a conventional new cycle, government policy promotion and market spontaneous update demand resonance, will also bring potential investment opportunities in the field of stock. At the same time, we are also actively concerned about the new changes in science and technology that may bring more than expected at the level of smart hardware.
Liu Tao is the general manager of the second bond investment department of Penghua Fund
Looking ahead, the overall easing of funds after the cross-quarter period and the allocation force are still strong, and the central bank's intervention in the market may be the core influencing factor for the short-term bond market. The two important meetings to be held in July may also affect bond market expectations, and bond market volatility may increase. In terms of coping strategies, it is necessary to respect both the central bank and the market, and there are still many structural opportunities in the bond market that can be tapped.
The economic data in June continued to be flat, and the PMI data remained below the boom and bust line. In May, real estate easing policies were introduced in various places, and the sales data in June improved month-on-month but remained weak year-on-year. At the end of June, there was a seasonal rise in capital prices, but the adjustment of short-term credit bonds was limited, and the allocation force of the bond market continued to be strong, which may be due to the fact that the rectification of banks' "manual interest supplement" is still continuing. The market has been somewhat blunted by the central bank's risk warning on long-term Treasuries this month, with the 30-year Treasury yield again approaching 2.40% at the end of the month. On July 1, the central bank announced that it intends to carry out securities borrowing operations, and then borrow securities to sell long-term treasury bonds to directly intervene in the market. Looking ahead, the overall easing of funds after the cross-quarter period and the allocation force are still strong, and the central bank's intervention in the market may be the core influencing factor for the short-term bond market. At the same time, the two important meetings to be held in July may also affect bond market expectations, and the bond market volatility may increase. In terms of coping strategies, it is necessary to respect both the central bank and the market, and there are still many structural opportunities in the bond market that can be tapped.
Wang Shiqian, General Manager of the Multi-Asset Investment Department of Penghua Fund
The subsequent performance of the convertible bond market may be similar to that of the stock market, presenting structural opportunities, with better elasticity of equity-to-bond swaps relative to debt-to-debt swaps.
In terms of macroeconomy, recent economic data reflect that domestic demand has weakened, and the contradiction between production and demand has increased, for example, the PMI data in June reflects the slowdown in production and procurement activities driven by the weakening of new orders, but the overall economic apparent data is still relatively stable, and the probability of policy "strong medicine" is still small. In the bond market, the yield of the bond market as a whole still maintains a downward trend while the financing demand is still not in sight to turn around and the demand is still weakening. At present, the overall yield of the bond market is low, the transaction is relatively crowded, and there is a possibility of short-term technical adjustment, but the downward trend of bond market yields may continue if the overall policy tone does not change significantly.
In terms of the stock market, in the context of the overall weakness of social finance and the increase in short-term downward pressure on the economy, the stock market as a whole may still show a volatile pattern, but in the environment of low overall valuation and abundant market liquidity, the stock market may present structural opportunities, the dividend style may still perform steadily, and the advantage of the large-cap style over the small-cap style may also continue. Some subdivisions may also have performance, such as electronics industry-related companies that benefit from the global artificial intelligence industry trend, the shipping industry and shipbuilding industry that are affected by the war and continue to have tight supply, upstream resources such as copper that have been tight for a long time, and power equipment, rail transit equipment and other sectors that benefit from the growth of demand driven by domestic policies.
In terms of the convertible bond market, the convertible bond market began to stabilize after some institutional investors sold low-priced convertible bonds in June, which led to panic selling in the market. Under the downward trend of bond market yields, it is unlikely that the valuation of the convertible bond market will be significantly compressed, and the allocation demand of the convertible bond market is still more, so the short-term valuation compression may have come to an end. The subsequent performance of the convertible bond market may also be similar to that of the stock market, presenting structural opportunities, with better elasticity of equity-based convertible bonds compared with debt-to-debt swaps. Large-cap convertible bonds as a whole benefit from the large-cap style may perform more smoothly, and small-cap convertible bonds have higher odds, but they need to select targets with relatively high-quality fundamentals.
Wang Kun is the deputy general manager of the mixed asset investment department of Penghua Fund
At present, the economy is in a stage of stable development, but the inflation level and price level have not improved significantly, in this context, the entire interest rate level, especially the short-end interest rate level, is difficult to rise significantly, and the bond market is in a favorable pattern. In the context of concessions to entities, there is still the possibility of easing monetary policy in the future, and the short and medium end can still be, and the follow-up portfolio will maintain steady operation.
At present, the economy is in a stage of stable development, but the inflation level and price level have not improved significantly, in this context, the entire interest rate level, especially the short-end interest rate level, is difficult to rise significantly, and the bond market is in a favorable pattern. In addition, the recent European election has brought great uncertainty, and the U.S. election in the third quarter is also a big change to face, the domestic real estate market is still in the process of recovery, and there is no overheating; Under the background of concessions to entities, there is still the possibility of easing monetary policy in the future, and the short and medium end can still be used, and the follow-up portfolio will maintain steady operation.
Wang Kangjia is the assistant director of the cash investment department of Penghua Fund
Looking forward to July, in the first half of the year, pay attention to the changes in capital prices, and it is expected to fall back from the end of the quarter after the cross-quarter, which is beneficial to the short and medium end, and the long end is expected to be affected by the central bank's open market trading of treasury bonds, and is expected to be volatile. In the second half of the year, we will pay attention to the impact of factors such as policy expectations, the acceleration of government bond issuance, and the capital of the July tax period on the bond market.
The official manufacturing PMI in June was 49.5%, unchanged from the previous month; After the 5.17 New Real Estate Deal, the margin of real estate transaction volume has improved, the transaction volume of second-hand houses is better than that of new houses, and the overall economic fundamentals have maintained a moderate recovery trend. The central bank over-injected OMO during the tax period and at the end of the quarter to stabilize fund fluctuations, and the fund price fluctuated in a narrow range throughout the month. The supply of government bonds is slow, the allocation of wealth management products is under great pressure, and the shortage of assets has not been alleviated. Overall, the bond market remains in a favourable environment.
Looking forward to July, in the first half of the year, pay attention to the changes in capital prices, and it is expected to fall back from the end of the quarter after the cross-quarter, which is beneficial to the short and medium end, and the long end is expected to be affected by the central bank's open market trading of treasury bonds, and is expected to be volatile. In the second half of the year, we will pay attention to the impact of factors such as policy expectations, the acceleration of government bond issuance, and the capital of the July tax period on the bond market.
Su Junjie is the general manager of the quantitative and derivatives investment department of Penghua Fund
Judging from the calendar effect, there is a high probability that the market will have an adjusted phased rebound in July. The "Kote Valuation" market is expected to ferment in the divergence, and it will perform under the catalysis of events and performance. Whether it is longitudinal or international comparison, the current valuation level of the science and technology innovation sector is at a low level and has some room for growth.
The market fully priced in a weak recovery, and returned to the cost-effective range again after the risk was released. Since May, with the fluctuation of economic fundamentals and the failure of the policy game, the market has continued to adjust and the net outflow of foreign capital has been renewed, and the risk factors have been fully priced. The market fell back below the key point, and the large net inflow of related ETFs highlighted the recognition of long-term capital for the cost-effectiveness of the current position. From the perspective of the calendar effect, there is a high probability that the market will have an adjusted phased rebound in July.
The "Kote Valuation" market is expected to ferment in the divergence, and it will perform under the catalysis of events and performance. Whether it is longitudinal or international comparison, the current valuation level of the science and technology innovation sector is at a low level and has some room for growth. At present, there is a large divergence in the expected outlook of investors on the technology sector, just like the market divergence when the concept of "medium and special valuation" was proposed, and after a period of divergence and volatility, the consensus is expected to gradually strengthen. At the Third Plenum of the Central Committee of the Communist Party of China held in mid-July, "new quality productivity" may become the focus of policy and form a potential catalyst for the science and technology market. At the same time, with the advent of the earnings season, the clues of performance improvement in the direction of science and technology will also have a positive impact on related stocks.
Luo Yingyu is the fund manager of the quantitative and derivatives investment department of Penghua Fund
At present, our judgment that the market will remain in a wide range remains unchanged. Since the second quarter, the central government has intensively launched scientific and technological innovation policies, and we expect that the market investment concept will return to equilibrium in the next stage.
At present, our judgment that the market will remain in a wide range remains unchanged. The economic situation and macroeconomic policies are in the process of slow change, and from a practical point of view, the recent economic and financial data is still weak overall, although there has been a slight marginal improvement. It remains to be seen how the effect of the policy will appear and verify, especially the macroeconomic improvement brought about by the real estate policy, and the marginal alleviation of the effect of the credit crunch, which is still gradually emerging. From the perspective of expectations, the reform measures that may be promoted by the convening of the blockbuster meeting are conducive to stabilizing market demand and expectations, and the policy rhythm remains determined, and the national leaders have recently stated that the policy tone is clear, that is, after several years of impact of the epidemic, the economic operation seems to be curing from a serious illness, and can not be drastically medicine, China's economy needs to "consolidate the foundation and cultivate the yuan", and when adopting major policies in macroeconomic regulation and control, more emphasis will be placed on the combination of long and short, and both the symptoms and the root causes will be treated, which means that the probability of substantial stimulus policy promotion is reduced. From an external macro point of view, the U.S. stock market will place more emphasis on monetary easing in the second half of the year, which will form a certain constraint on the RMB exchange rate and monetary policy space. From the perspective of allocation strategy, it is still recommended to balance the allocation and appropriately rebalance in the direction of technological growth. Since the beginning of this year, thanks to policy support and the downward push of long-term treasury bond interest rates, dividend and dividend strategies have prevailed, resulting in crowded market transactions in the dividend direction. From last year's encouragement of the market to re-evaluate high-quality central state-owned enterprises such as high dividends and high cash flow, to this year's increase in policy focus on innovative technology enterprises, the China Securities Regulatory Commission issued the "Eight Articles of Science and Technology Innovation" at the Lujiazui Forum, and the intensive introduction of scientific and technological innovation policies at the central level since the second quarter, we expect that the next stage of market investment philosophy will return to equilibrium, supported and guided by industrial policies. The growth direction of science and technology supported by solid fundamentals is expected to attract market attention. In terms of specific varieties, we can pay attention to the low-level layout opportunities in semiconductors, media, intelligent networked vehicles and other sectors.
Zhang Yuxiang is the fund manager of the quantitative and derivatives investment department of Penghua Fund
The State Council recently issued the "Opinions on Developing the Silver Economy to Improve the Well-being of the Elderly", and the country's top-level strategy has gradually changed from "treatment-centered" to "people's health-centered", and recognized the leading role of traditional Chinese medicine in the prevention of diseases, and the traditional Chinese medicine industry is expected to continue to benefit in the long run.
In order to actively respond to the aging of the population, cultivate new momentum for economic development, and improve the quality of people's lives, the State Council recently issued the "Opinions on the Development of the Silver Economy to Enhance the Well-being of the Elderly", the document focuses on the development of people's livelihood, solves the urgency, expands the supply of products, improves the quality level, focuses on diversified needs, cultivates potential industries and strengthens the guarantee of factors, and optimizes the development environment A total of 26 opinions are put forward. Strengthen the construction of geriatric departments in general hospitals and traditional Chinese medicine hospitals, and speed up the construction of rehabilitation hospitals, nursing homes, and palliative care institutions. Expand the application of traditional Chinese medicine in the field of health care, develop traditional Chinese medicine services such as geriatric diseases and chronic disease prevention and treatment, and promote the research and development of traditional Chinese medicine rehabilitation equipment. In 2023, China's population aged 65 and above will account for 15.4%, an increase of 5.7% compared with 2013; In 2023, per capita health care expenditure will account for 9.2%, an increase of 2.3% compared with 2013. The national top-level strategy has gradually changed from "treatment-centered" to "people's health-centered", and the leading role of traditional Chinese medicine in the prevention of diseases is recognized, and the traditional Chinese medicine industry is expected to continue to benefit in the long run.
Yang Yajie is the deputy general manager of the stable income investment department of Penghua Fund
In the bond market, after the cross-quarter, the interbank funding side is expected to remain loose, and the logic of asset underallocation of various types of institutions has not yet been reversed. The central bank borrowed bonds to correct the shape of the yield curve, and it is expected that the curve will show a certain steepening, and the relative value of the short and medium end will be better. In terms of equity, it is expected that the dividend style will remain the main line.
The domestic economic fundamentals are still in a slow recovery channel, waiting for the policy signals released by the Third Plenum. After the first round of the presidential debate in the U.S. election, markets began to price in the likelihood of Trump coming to power. Trump's domestic policy has a tendency to be fiscal and monetary easing, and the long-end yield of U.S. bonds has risen significantly. The adoption of an aggressive tariff policy may have an adverse impact on the mainland's export growth.
In the bond market, after the cross-quarter, the interbank funding side is expected to remain loose, and the logic of asset underallocation of various types of institutions has not yet been reversed. The central bank borrowed bonds to correct the shape of the yield curve, and it is expected that the curve will show a certain steepening, and the relative value of the short and medium end will be better. In terms of equity, it is expected that the dividend style will remain the main line.
Hao Lili is the deputy general manager of the international business department of Penghua Fund
In terms of credit bonds, as market risk appetite improved and credit spreads narrowed, Chinese dollar bonds generally showed a higher yield than investment grade this year. We don't think there is much room for further contraction in credit spreads, but due to limited supply, the probability of outperforming the high static yield portfolio is still high, and the convertible bond sector may consider opportunistic allocation.
Despite the more hawkish than expected FOMC meeting in June, the latest data showed a clearer downward trend in inflation, the cooling of the labor market was recognized, and inflation concerns in the market have also dropped sharply, and US Treasury yields have fallen to a higher level, and we expect to enter a continuous cycle of interest rate cuts from the second half of the year. As inflation expectations and the starting point for interest rate cuts become clearer, U.S. Treasuries will form a volatile pattern in a narrower range, and further downside will take longer for data to validate. The European Central Bank and many other central banks have already started the interest rate cut cycle first, although it is unlikely to cut interest rates in July, the US dollar still tends to be strong, which has a suppressive effect on emerging market exchange rates, and with the seasonal factors in June and July also weakening, we expect the RMB exchange rate against the US dollar to be difficult to reverse the trend in the short term.
In terms of credit bonds, as market risk appetite improved and credit spreads narrowed, Chinese dollar bonds generally outperformed investment grade with high yields this year. We don't think there is much room for credit spreads to shrink further, but the probability of a high static yield portfolio outperforming is still high due to limited supply, and the convertible bond sector may consider opportunistic allocations.
Tang Zhiyan is the deputy director of the stable income investment department of Penghua Fund
At present, the market is pessimistic, and purely from the perspective of asset cost performance, it is inevitable to be more optimistic about the allocation opportunities of equity. After the collapse of liquidity in January and the recent back-and-forth declines in small-cap companies, it may not make much sense to reiterate the risks of small-cap companies, and it is more rewarding to look for opportunities to be wrongly killed, even if they are not cost-effective in the current market environment.
At present, the market is pessimistic, but we put aside the subjective logical narrative and look at it purely from the perspective of asset cost performance, we must be more optimistic about the allocation opportunities of equity at present.
In terms of equity, we saw that the return of equity assets in the first half of the year was basically proportional to the market value of the company, which is a rare situation in the past many years. If the strength of high-dividend stocks in the face of uncertain economic prospects is justified, sectors such as banks and coal where fundamentals diverge from stock price movements are even more puzzling. The last time small-cap stocks significantly underperformed the index was in 2017, when small-cap stocks were in the downturn of the 2014-2015 market bubble and were extremely highly valued. The current rejection of small-cap companies seems to have become a consensus in the market, citing declining shell value, illiquidity, accelerated delisting of listed companies, and unstable profits, which is diametrically opposed to the pursuit of small-cap companies in the previous two years. And we think that after the collapse of liquidity in January and the recent back-and-forth declines in small-cap companies, it may not be as meaningful to emphasize the risks of small-cap companies, and the more valuable work is to look for opportunities to be wrongly killed, even if these jobs are not cost-effective in the current market environment.
Li Jun is the fund manager of the stable income investment department of Penghua Fund
From the perspective of macro cycle and asset price-performance, we believe that we should be vigilant against bond risks and pay more attention to equity allocation opportunities. At the moment we are still struggling at the bottom of the cycle, but this also provides us with a good allocation opportunity, and our main focus should be on finding certainty as much as possible in the bottom area.
From the perspective of macro cycle and asset price-performance, we believe that we should be vigilant against bond risks and pay more attention to equity allocation opportunities. At the moment we are still struggling at the bottom of the cycle, but this also provides us with a good allocation opportunity, and our main focus should be on finding certainty as much as possible in the bottom area.
Specifically, bonds are not exposed to duration and credit risk as much as possible, and the underlying income is obtained, which serves as a safety cushion and plays a macro hedging role.
In terms of equity, whether from various quantitative statistical indicators or from the perceived temperature, we can clearly perceive that the current equity market is already in the bottom area, and it has picked up recently. At present, we see that the prices and valuations of many industries and individual stocks that represent the direction of future economic development have been lower than in the past, and the fact that they themselves are the driving force of the medium- and long-term development of the economy has not changed, we are still firmly optimistic about the transformation of the country's economic structure, and the resulting investment opportunities, and believe that the source of investment income is fundamentally derived from value creation, so such allocation opportunities are very rare for us. Whether it is the current investment or our macroeconomic and social problems, we must strategically ignore the current difficulties, be cautious and cautious in tactics, and face them with a down-to-earth and realistic attitude, believing that in this way we will be able to go further and more steadily.
Fan Jingwei is the fund manager of the stable income investment department of Penghua Fund
In the first half of the year, mutual funds performed better than the broad-based index and better than the median change, largely because the earnings quality factor was very effective this year. We believe that this trend force will continue, and it may be easier to bring alpha returns by downplaying the impact of the index and focusing on the earnings sustainability and stability of sectors and individual stocks.
Since July, the economy and geopolitics have become much more complex than in the first half of the year. There is a high probability that the fundamentals will continue to run weakly, and the overall framework has not been shaken by the marginal weakening of the fundamentals. In addition, due to a number of underlying factors, the potential space and strength of fiscal and monetary policies are lower than ideal. Such a combination of fundamentals and policies, coupled with a complex external environment, makes it difficult to see the strength supporting the upward movement of the index. In the first half of the year, only 750 stocks rose in the two cities, accounting for less than 15%, but from the performance of public funds, it was better than the broad-based index and better than the median of the rise and fall. We believe that this trend force will continue, and it may be easier to bring alpha returns by downplaying the impact of the index and focusing on the earnings sustainability and stability of sectors and individual stocks.