The Zhitong Finance App learned that SDIC Securities released a research report saying that in the face of the April market, the clearest style guideline from historical experience is to return to fundamentals, and the role of fundamental factors increased sequentially. Regarding the recovery of excess earnings from 2010 to April 2023, the conclusion is that the April increase was more correlated with the first quarter report (median correlation coefficient of 21.54%), and the correlation between the second half of the month's increase was significantly higher than that of the first half of the month. Here, combined with industrial enterprise profits and PMI data for January-February, the prediction was further clarified: in this round of intensive disclosure of 2023 annual reports and quarterly reports, the best boom pricing guidelines were concentrated in the direction of going out to sea (export) (three routes to sea, certified vehicles (commercial vehicles), shipbuilding electricity (home appliances)), while other fields were relatively scattered (optical modules, gold, sporting goods, some new energy sources, etc.).

Top 10 gold stocks in April: Shaanxi Energy (001286.SZ), Xugong Machinery (000425.SZ), BYD (002594.SZ), Midea Group (000333.SZ), Western Mining (601168.SH), Tianfu Communications (300394.SZ), North China Chuang (002371.SZ), Zhongke Xingtu (688568.SH), Yanjing Brewery (000729.SZ), Changshu Bank (601128.SH).

SDIC Securities views are as follows:

Since March, the Shanghai Index has been fluctuating around 3050 points.

Here, when combined with a sharp rise, there was a sharp decline, and after the sharp decline, there was a shock. Regarding the assumption of the mid-term operation of the large market index, the bank maintains its judgment: the current market is similar to the shock after the collapse in 2016 (the core issue is the stock market liquidity crisis, small and medium market growth = technology represented by new quality productivity, delta g = the dual main line of going overseas dominates), get rid of the phased sharp decline mentality; rather than pricing in 08-09 (the core problem is the financial and economic crisis, which is always relayed by a sharp decline without substantial policies and continuous improvement in economic data); the analogy between late 2018 and early 2019 is still premature (Internal and external pricing conditions Improve resonance formation reversal pricing).

Facing the April market, the clearest style guide from historical experience is: return to fundamentals, and the effects of fundamental factors increase sequentially (note: not necessarily the most important factor).

Regarding the recovery of excess earnings from 2010 to April 2023, the conclusion is that the April increase was more correlated with the first quarter report (median correlation coefficient of 21.54%), and the correlation between the second half of the month's increase was significantly higher than that of the first half of the month. A notable sign is that the “SDIC Securities Strategy - A-share Sentiment Investment Effectiveness Index” has recently returned to 1.65%. When the index is greater than 5%, it means that boom investment has systematically entered the effective range, and excess returns are often the highest; below 0 means systematic failure; and the 0-5% range means that there is clear excess performance. Here, combined with industrial enterprise profits and PMI data for January-February, the prediction was further clarified: in this round of intensive disclosure of 2023 annual reports and quarterly reports, the best boom pricing guidelines were concentrated in the direction of going out to sea (export) (three routes to sea, certified vehicles (commercial vehicles), shipbuilding electricity (home appliances)), while other fields were relatively scattered (optical modules, gold, sporting goods, some new energy sources, etc.).

Objectively speaking, at the structural level, the bank tends to continue the interlaced pattern of high dividend+technology+overseas in April, and overseas pricing will have more advantages to support profit growth.

In fact, according to historical statistics, the probability that A-shares will dominate in the first quarter is the main line for the whole year (probability reaching 80% or more). Since the beginning of the year, the three directions of high dividend+technology+going overseas have prevailed, fully verifying that the bank repeatedly emphasized four effective investment strategies (technology, overseas, consumption conversion, and high dividends) last year.

Further: Facing the A-share market in the second quarter, the bank still believes that the core of the internal issue is judging the bottom of A-share profits; the core of the external issue is whether global capital represented by FDI will return to China in anticipation of the Fed's interest rate cut. From a logical point of view, the bank believes that looking at FDI first, if FDI capital continues to accelerate month-on-month, it means that the market is expected to break through the fluctuation and upward; if FDI capital shows a low inflow or further slowdown in inflow growth, then the core of A-share pricing in the second quarter is still mainly internal: 1. PPI remained flat month-on-month; 2. PPI rebounded year-on-year to speculate on the bottom of profit. If profit bottoming can be predicted within the next six months, even if the month-on-month improvement in profit growth continues for only 1-2 quarters, it can induce upward pricing changes. In other words, if we want to break through the volatile pattern in the second quarter, then the required condition is to meet the bottom of profit in Q3 at the latest. If both conditions are not met, then the shock after the sharp decline will be maintained.

Short-term overmatch industries: technology stock mapping (TMT+ pharmaceutical+humanoid robots); global competitiveness of the industry (robot parts, commercial vehicles, auto parts, ships, optical modules, home appliances, smart logistics), high dividends (energy, electricity, home appliances and operators); consumption substitution.

Risk warning: Increased friction between China and the US, policies falling short of expectations, changes in overseas monetary policies.