Northeast Securities: Game Plate switching

The medium-term outlook for the economy is expected to increase further, and the market is still maintaining a trend of upward momentum. However, the market for the short-term adverse factors can not be ignored, such as the non-tradable pressure is still continuing, financing demand began to rebound.　　Therefore, we believe that in the focus on the trend of rising, beware of the big market drop. Pay attention to 2,700 points or is a drop in the Northeast securities Feng Zhiyuan Guo Feng due to the medium-term macro-economic expectations will be further enhanced, the recent trend of a-share a short-term adjustment after the oscillation upward, the market is still maintaining trend of upward momentum. Market attention to a number of positive expectations brought about by the trend of rising, while the market for short-term adverse factors have been neglected. Short-term risk factors include influenza A virus is still spreading, the negative impact on the economy is still there; the size of the volume is still continuing, reducing the number of the chain is still rising, a-share circulation market value has exceeded 10 trillion yuan; Financing demand began to rebound, the pace of the gem, the IPO is getting closer　　Therefore, we believe that in the focus on the trend of rising, beware of the big market drop. Style conversion has been strengthened in the two quarterly strategy report, we have proposed that based on the performance of listed companies are still in the negative growth rate, the Shanghai Composite Index to enter more than 2,500 areas will face the high valuation pressure brought about by the overall level of valuation, in particular, we believe that the high valuation of small and medium market If the market can not appear style conversion, the rebound market will face pressure. The previous rounds of banks, petrochemical sector of the drop in the fall can be seen market style conversion is not successful. But in recent times, there have been some changes in the market, which have strengthened the style of conversion. These changes are mainly reflected in the following two aspects: first, the central bank's price four-stage theory suggests that the recovery of performance is optimistic. The central bank has explicitly put forward the price four stage theory in its currency performance report. Namely: inflation, inflation, deflation and inflation. The central bank noted in its report that in contrast to inflation, when the total price level continues to rise, it refers to stimulating the economy out of deflation by increasing the supply of money, which is the time when the economy began to recover from the bottom of the recession and the overall price level began to rise. From this point of view, the central bank may think that the current price of our country is in the inflation stage. The central bank's statement reflects the central bank's optimistic view of macroeconomics and prices.　　Combined with the 5-month-old rebound in the benchmark PMI, the market's expectations of a macroeconomic recovery have been reinforced, partly by the pressure on short-term valuations. The second is the recent intensification of market-style conversion, and the start of the recent indicator stocks makes the index fast upward. Due to the performance and valuation advantages, the large blue chip has to the market average rate of return closer to the increase in power. At the same time, we note that the Fund issued a return to the pursuit of signs, the new fund is now better choice in the market or in the broad blue chips.　　Therefore, the performance of the market will determine the trend of future stock index. The success of style transformation needs to be further coordinated by macro-level, which comes from the expectation of macroeconomic recovery, when the expected reaction in the stock price and the future is difficult to achieve the expected degree, the market will inevitably release the risk. Overall, China's macro-economy is still at the bottom but the recovery needs to be further observed in the period, we see indicators are good and bad data, such as April of electricity generation. But we believe that the correction of individual indicators in April does not affect the overall macroeconomic upturn in the 2 quarter.　　Style transformation process is bound to accompany the emergence of structural adjustment pressure, we are concerned about the large blue chip replenishment, but also to avoid the small and medium-sized market stocks due to valuation factors and the adjustment pressure. Focus on the 2,700-point pressure current market runs to 2,600 points near, after all, our annual strategy is considered a liquidity-supported 2,700 point position.　　At the same time, the market in the way of plate rotation continues to a more strong trend, large financial, petrochemical, the more powerful rise, so that market participants have to re-examine our current market structure and its overall operating characteristics. Continuing the idea of our annual, quarterly and monthly strategy reports, we believe that if the economy is a more moderate recovery and the economy remains under potential output for a longer period of time, the dominant force in the market will remain largely at the policy level, The level of market valuations, including in some sectors such as infrastructure driven by fiscal policy, and with ease of liquidity, has gradually returned to the central axis (especially as a strong rebound in small and medium-sized market stocks).　　In this inference, we think that around 2,500 is already a reasonable estimate of the central axis, 2,700 points will be the critical position of the high point. But rational investors must be in awe of the market and cautious about the city. We also need to consider another scenario, that is, the economy's hyper-anticipated recovery, the economic V-shaped and the rapid and obvious recovery. If this happens, the market drivers will shift from the previous "Liquidity + policy stimulus" to "a strong expectation of liquidity + policy stimulus + economic recovery", and more will be put to the strong expectations of economic recovery. The corresponding market, will not only appear plate switch, that will switch to the economic recovery cycle of interest rate sensitive industries, including real estate, such as the big financial industry and automobile and other optional consumer goods industry, and gradually will continue to the economic boom cycle of raw materials, capital goods, such as the upstream industries. For this hypothesis, although from the fundamental perspective, we still have doubts, but from the global market, there are some leading indicators: The dollar has continued to fall, according to the investment clock theory, in the economic recovery cycle of the U.S. dollar demand for safe havens will weaken, more money in favor of more growth of the economy;　　It's close to the 50-60-dollar range we've measured before, and once the oil has successfully topped 60 trillion dollars, it will herald a turnaround in the economy and a sustained rebound in global equities. Game plate switching for the above two fundamental and market assumptions, although we have some doubts about the economic v-type reversal, but from the market strategy, we must pay attention to "The strong expectation of economic recovery "in the current market operation." Reference to the economic recovery phase of the reasonable valuation of the table, we can find, whether it is economic optimism, or neutral situation, the Bank (big financial) and PetroChina + Sinopec at a reasonable level of valuation-reasonable valuation level of the middle axis, at the same time, A shares also appeared a structural irrational phenomenon, That is, 245 loss shares are enjoying an average of 4 times times the PB, there is an overestimation. As a result, once the market has "a strong expectation of economic recovery", the valuations of stocks are likely to hit the upper limit of reasonable valuations in the economic recovery phase;　　Then according to our calculation table, we can see that both the Bank (big Finance) and PetroChina + Sinopec are in the reasonable interval of the middle axis, and some small and medium-sized stocks in both scenarios have the adjustment pressure. Therefore, from an operational strategy perspective, we should be more game plate switching, from the security margin, more should be inclined to the bank-led large financial stocks and PetroChina Sinopec, and according to experience, the market optimistic expectations, once the impact of economic recovery on the track, then the two types of stocks may exist 10-20% The valuation on the punch space.　　But for the higher valuation of small and medium-sized stocks are mainly to avoid, and to return to the economic recovery phase corresponding to the reasonable valuation interval to give priority attention. The focus of valuation depressions and regional revitalization style conversion is to look for the valuation of depressions, the bank, real estate, petrochemical and other weight stocks have some valuation advantages. The decision by the State Council to reduce the capital of investment projects in some areas will strongly support the 4 trillion investment projects and ease the market's fears of a credit slowdown and a tightening liquidity.　　Commodity residential investment in the proportion of capital, and recently some well-known developers began to take the move or intention to look, indicating that real estate investment growth is expected to rebound, will drive upstream related industries such as steel, non-ferrous, building materials and other industries recovery expectations. Subject investment, after the Shanghai two centers and Hercynian planning out, the government's regional revitalization of the idea has been more clear, suggesting that the latter may come out of other areas of planning, such as the Bohai Sea, Guangxi, the Midwest (Chongqing, Wuhan), Northeast revitalization.