Carnival Tide Of Small And Medium-Sized Market Cap Stocks: Pro Cyclical Plate Leads Gains, 1000 Performance Forecasts Reveal Rebound Direction

"Baotuan stocks" suffered heavy losses.

On February 22, the turnover of Shanghai and Shenzhen stock markets exceeded trillion yuan for the third consecutive trading day after the Spring Festival, but the market style reversed sharply. The high-level plates such as liquor, photovoltaic, food and household appliances which had been soaring before the festival continued to make a deep correction, and the Mao index fell 5.28%.

Among them, Guizhou Maotai fell by nearly 7%, Wuliangye, Luzhou Laojiao and Yanghe shares all fell by more than 8%. Baotuan shares of yaomingkant, Dongfang fortune, Dongfang Yuhong, Midea Group, Aier Ophthalmology, Shunfeng holding and Longji shares fell by 9.06%, 8.66%, 8.32%, 7.70%, 7.41%, 6.99% and 6.94% respectively. Golden dragon fish, Changchun high tech, Mindray medical, Haitian flavor industry also fell by more than 4%.

The three major indexes also fell collectively, with the Shanghai composite index down 1.45%, the Shenzhen composite index down 3.07%, and the gem index down 4.47%, reaching a new high in nearly half a year.

However, the 21st century economic report reporter noticed that while the group stocks were adjusted substantially, the low-level small and medium-sized stocks continued to rise, with 2612 rising stocks and less than 1600 falling stocks. In addition, the trading volume of the two cities is also constantly expanding, with the cycle stocks all strengthening, steel and oil chemical non-ferrous metal plate rising sharply. Nearly 20 shares of Tongling Nonferrous Metals, Luoping zinc power, Yunnan copper, Tin Industry Co., Ltd., China gold, Xingye mining, Ningbo Fubang, northern rare earth, Jiangxi copper, etc. were once up and down.

Behind these changes, institutions have become loose, and funds are gradually transferred to small and medium-sized market shares. 21st century economic report reporters have noticed that the current focus on Pro cyclical and undervalued targets has almost become the consensus of institutional investors.

Medium and small cap valuation repair market is expected to start

"This year's yield is not as optimistic as last year." A private equity investor in South China told the 21st century economic reporter.

Since the Spring Festival, the market has continued to shake, institutions are obviously loose, and the "core assets" with high valuation have been reduced by many institutions. On February 22, market turbulence intensified, liquor index fell 6.61%, pharmaceutical biological index and new energy index fell by 4.11% and 2.35%, respectively. Leading enterprises in household appliances, food and beverage, electrical equipment, medical biology and other sectors with concentrated funds in the early stage were recalled.

"We observed the spread of the 10-year Treasury bonds between China and the United States, and found that there was a positive correlation between the spread and the valuation of stocks held by foreign investors in the long run. In January, we noticed that the spread of 10-year Treasury bonds between China and the United States has gradually narrowed, but the valuations of these stocks are still rising. Therefore, we concluded at that time that the trend of continuous rise in group stocks will not last long." Xuanyuan investment director Yang Xia said.

It further added: "during the Spring Festival, the fundamentals did not change much, but the stock price obviously reversed. For example, the dynamic sales of liquor in the first quarter had very good data. There was no problem with the EPS of these subject matters. The main problem was that the valuation was high, and there were problems in the matching degree of performance and valuation and cost performance."

However, the market has yet to decide whether or not institutions will collapse.

"Although the organization group appears to be loose, it will not easily disintegrate. The rotation between plates will be intensified, and the group will continue. It is inevitable that the agglomerated plate will also change, but it will still focus on the high-quality leading companies in the industry with stronger profit certainty." Chunshi capital business partner and head of securities investment department Yang Ruyi pointed out.

Yin Yue, chief market analyst of YueKai securities, also pointed out that "the end of Baotuan market is closely related to economic weakness and liquidity tightening", but "from the perspective of fundamentals, policies and liquidity, Baotuan market does not have the foundation for collapse."

In Yin Yue's view, the high and low switching of medium and short-term funds to a certain extent reflects the market's doubts about whether there is space above the high-end stocks. The funds are expected to flow from high-priced stocks to ultra-low-performance stocks with relatively low valuations. With the injection of incremental funds, the valuation recovery of small and medium-sized stocks is expected to start.

However, from the perspective of market flow, there has been a significant shift in capital preference. On February 22, northbound capital sharply changed from buying to net selling in the afternoon, with net purchases of more than 2.1 billion yuan at one time in the morning, but by the end of the day, the net sales of northbound funds reached 1.114 billion yuan. Southbound funds became more active, and continued to buy 23.286 billion yuan for three consecutive trading days.

"Compared with A-share investors, they are more optimistic about Hong Kong stocks. The big logic is that the progress of monetary policy normalization of the Federal Reserve is slower than that of the Central Bank of China. China's central bank has begun to normalize monetary policy, while the Federal Reserve continues to release water. As the liquidity pricing of Hong Kong shares is global pricing, while the liquidity pricing of a shares is determined by the central bank, a shares will take the lead in entering the environment of tightening marginal liquidity than Hong Kong stocks. However, Hong Kong stocks did not rise significantly before, so the current valuation is (relatively) reasonable. " Yang Xia pointed out.

However, looking at the trend of Hong Kong stock market, it is also obvious that the technology sector with signs of holding together has suffered heavy losses. Among them, the Hang Seng technology index plummeted by 5.53%, meituan and Xiaomi both fell by more than 5%, Tencent, Alibaba and Jingdong fell by 3.71%, 2.49% and 3.8% respectively.

Annual report indicates investment direction

The 21st century economic report reporter learned that at present, many institutional investors have already adjusted their positions, and some new funds are no longer going to "climb stocks" to continue to build positions. Instead, they choose to invest in small and medium-sized stocks in the direction of matching valuation with performance and more cost-effective.

In fact, it is not difficult to see the flow of funds from the current market performance. No matter Hong Kong stocks or a shares, nonferrous metals, chemical industry, energy and other sectors continued to strengthen, with Shenwan steel, nonferrous metals and mining index rising by 6.02%, 4.70% and 3.03% respectively. Among them, the cyclical stocks with small and medium market value become the main force of the rise, and Zijin mining, Tongling Nonferrous Metals, Yunnan copper, Chalco, Shandong Haihua, Jinniu chemical, Zhongyan chemical, Shenyang chemical industry, etc. all rose.

From the current performance point of view, the performance of the above-mentioned trading enterprises in 2020 annual report is relatively excellent.

"In fact, from the perspective of long-term investment, it may be possible to dilute the market style or consider the current allocation based on fundamentals and valuation. On the one hand, under the background of global economic recovery, the opportunities of Pro cyclical sectors are highlighted, and the improvement of economic structure is more certain and sustainable than the overall improvement. The resonance of overseas supply and demand may benefit the performance of non-ferrous machinery and chemical industries; On the other hand, we will pay attention to some growth plates with higher prosperity, which are helpful to digest static overvalues. On the whole, high-quality companies in industries with long-term logic and positive short-term prosperity are expected to continue to make efforts. " Chunshi capital business partner and head of securities investment department Yang Ruyi pointed out.

It is worth mentioning that as the "archives" reflecting the value of listed companies, the annual report has become a vane for many investors to dig for "low value depression".

Up to now, 2418 A-share listed companies have issued performance forecasts for 2020, and many small and medium-sized enterprises with better performance than expected have become the target of institutions' pursuit. According to wind data statistics, there are 1049 listed companies with performance forecast increase, 295 enterprises turn loss, accounting for 55.58%. Chemical industry, nonferrous metals, animal husbandry and other early oversold stocks in the annual report "rebound" immediately ushered in the stock price surge.

A typical example is Jiangsu SOPP. In the end of January, the company predicted in the annual report forecast that the company would turn a loss and realize a net profit of about 230 million yuan to 260 million yuan in 2020, The increase was 4180.0603% ～ 4712.2421%, which was due to the following reasons: in the second half of the year, with the gradual control of the epidemic situation, the social return to work rate increased steadily, and the price of acetic acid, the company's main product, gradually rebounded. Especially in the fourth quarter, the price of acetic acid increased greatly and the company's performance increased significantly.

According to wind data, Jiangsu Thorpe's share price, which fell by 12.48% in 2020, will fight back by the Jedi in 2021, and has increased by 83.04% in the year up to February 22.

This is not an example. According to CICC's forecast, benefited from some strong cyclical areas of international industrial metals and crude oil prices, it is expected that the performance of non-ferrous metals, petroleum and petrochemical industry and chemical industry will increase by 535%, 39% and 171% respectively in the fourth quarter of 2020.

"In the medium and long term, not all the small and medium-sized bills will rise. Only when the subject matter of EPS marginal expansion and reasonable valuation has a sustained upward momentum can be found. At present, (in line with this logic) one is the pro cyclical sector, and the other is that the companies damaged by the epidemic situation will obviously have a repair process after the epidemic situation is under control. " Yang Xia said.