candycrushsagadownloadfreeforpc| Huatai Securities A-share strategy: Tactical allocation of dividends at the bottom and outside positions in the medium term focuses on "real estate +"

Zhitong Financial APP learned that Huatai Securities released a research report saying that last week, the Shanghai Composite Index shrank and adjusted, summing up three observations.Candycrushsagadownloadfreeforpc: ① 2Candycrushsagadownloadfreeforpc.5-5Candycrushsagadownloadfreeforpc.24, full A NTM PE repair exceeds 20% to 14x, total market center of gravity moves up, lack of economic extrapolation direction in structure, performance-to-price ratio is dominant, low valuation and dividend style are dominant. ② policy: after the intensive catalysis of the real estate policy, entering the observation period, the policy tools have reserves and the market has expectations. Reduce the new rules on the ground, or accelerate the floating of industrial capital to optimize the A-share ecology. ③ overseas: the Fed's interest rate cut is expected to return or continue, suggesting weakening the point bet when cutting interest rates. Overseas AI strong capital expenditure + leading high boom weakens the mapping of A shares. Configuration: low crowding + cost-effective dividend varieties are still bottom positions; tactical allocation of real estate + export-driven light industry, real estate + chemical fiber and chemical raw materials driven by capacity reduction, and real estate + consumer goods driven by consumption recovery.

The main points of Huatai Securities are as follows:

Market observation: the total risk is small, and the main line of the structure is difficult to find.

On the one hand, the financial data window, real estate, capital markets and other areas of market concern, decision-makers are active, and A-shares still have a cost-effective advantage from a global perspective, the market is looking forward to the policy before July, and there is little downside risk. On the other hand, the real estate destocking policy has gradually landed, and some of the funds have made a profit after the short-term active odds trading of the real estate chain (mainly the real estate enterprises themselves).CandycrushsagadownloadfreeforpcEnd it and wait and see the follow-up measures. The total A NTM PE has been repaired to 13.6x, close to the 19-year average of 14.2x, and the center of gravity has gradually moved up, but there is still a lack of economic extrapolation in structure.

Somatosensory, the recent rapid rotation between industries, high-cut low after the market resistance has become greater, investors are more in pursuit of stability, last week defensive varieties (agriculture, electricity) and other performance is at the top, while low valuations and dividend style since April excess earnings rebound continues.

Policy observation: the real estate policy still has expectations, and the new rules for reducing holdings optimize the ecology.

In the past month, the marginal change of policy has been intensive, which is one of the dominant variables affecting market intensity. Among them, real estate and capital markets are the focus. ① real estate: destocking policy intensive catalysis, accelerate the fundamentals of bottoming, real estate valuation repair. For the market as a whole, the follow-up housing prices (expected) and stock mortgage interest rate optimization → residents' balance sheet repair → domestic demand improvement chain will gradually deduce or more critical.

New rules on ② reduction: strictly standardize the reduction of major shareholders, stipulate that breakage, net breakage, substandard dividends and other situations such as no centralized bidding and bulk trading reduction, increase pre-disclosure obligations; effectively prevent bypass reduction; refine the liability provisions for violations. From the beginning of the year to May 25, industrial capital reduced its holdings by 43.6 billion yuan, down 78% from the same period last year, and reduced its holdings by 1.4 billion yuan last week (1.2 billion yuan the week before last). The new rules may accelerate the floating of industrial capital.

Overseas observation: overseas liquidity is expected to wobble or persist, TMT overseas mapping is also passivated

The paths of overseas variables affecting A-shares in the short term include: the Fed's interest rate cut (expected) affects the overall valuation repair space and rhythm of A-shares, and the mapping of overseas AI industry cycle to A-share TMT plate. For the former, the Fed's interest rate cut expectations may move back again, the time point of the first interest rate cut is highly uncertain, and there is no bet on the rate cut or a better solution. Fed officials said last week that the July rate cut required better inflation data and signs of weakness in economic activity or the job market, while stronger May PMI and lower unemployment meant that July was less likely to meet the conditions for a rate cut.

For the latter, the pull of overseas catalysis on A-share TMT is weakening. Although according to the unanimous forecast of FactSet, AI has pushed up the capital expenditure of 2024E US stock TMT by 7% so far from the beginning of the year, and Nvidia, which is driven by the data center, has been strong and continues to exceed expectations, but the performance of A-share TMT share price has passivated this, and the marginal change weight of domestic industry may be increased.

Configuration: outside the medium-term bottom of the dividend, the tactical configuration pays attention to "real estate +".

Since the beginning of February, full A NTM PE repair has exceeded 20% to 13.6x, above the average of the past year and close to the average level of 2019. During the repair, the market center of gravity has gradually moved upward, policy expectations in total support risk appetite, and there is a lack of economic extrapolation direction at the main line level in structure, which is characterized by the rapid rotation of the industry and the market sinking in the direction of high performance-to-price ratio.

In terms of configuration, it is suggested that on the basis of a stable ROE and even a dividend with room for improvement, we should build "real estate +" at every bargain to increase exposure to domestic macro-beta, including: ① real estate + export-driven light industry; ② real estate + supply of reduced-pressure chemical fiber, chemical raw materials and real estate + consumer recovery of mass consumer goods.

Risk Tips:

1) the landing of domestic policy is not in line with expectations; 2) the change of overseas liquidity is not in line with expectations.