Although the current risks have not been clearly revealed, they are gradually accumulating, and the “cost performance ratio” of investment returns is declining. It is expected that the upward momentum of A-shares in April will probably weaken.
The Zhitong Finance App learned that although the current risks have not been clearly revealed, Guojin Securities released a research report saying that although the current risks have not been clearly revealed, the “cost performance ratio” of investment returns is expected to weaken, and market volatility may tend to rise in April. It is recommended to grow at a higher rate than profit and gradually switch to value defense; wait for the March economic data, once potential risks are clearly exposed, it will enter full defense. At that time, expectations for a new round of downgrades and interest rate cuts in the second quarter will further heat up. It is recommended that the configuration gradually shift from “growth attack” to “value defense”.
The top ten gold stocks in April: Zoomlion Heavy Industries (000157.SZ), CNPC (601857.SH), Tangshan Port (601000.SH), Shandong Gold (600547.SH), China Gold (), Tebao Biotech (Dubai), Superstar Agriculture and Animal Husbandry (Sichuan), China Merchants Shekou (001979.SZ), Sichuan Jiuzhou (000801.SZ), Kairun (300577.SZ). 600489.SH 688278.SH 603477.SH
Guojin Securities's views are as follows:
The actual profit performance of micro enterprises still needs to be improved, and there is a clear “temperature difference” with macro data. Recently, industrial enterprise profit data was released. The cumulative industrial revenue for January-February 2024 was 4.5%, and the cumulative total profit was 10.2%. Compared with the cumulative year-on-year increase in December 2023, the cumulative year-on-year increase was 3.4 pct and 12.5 pct, respectively. Obviously, judging from the data, the improvement was quite obvious. However, considering that the total revenue and profit of industrial enterprises were negative in January-February 2023, and in particular, the cumulative total profit fell sharply by 22.9% year on year, which is a large decline. Therefore, if you calculate the two-year compound growth rate, the cumulative total revenue and profit of industrial enterprises from January to February 2024 were 1.56% and -7.82% year on year, respectively. Revenue still improved marginally, but profits declined sharply, showing the “increase in revenue without profit increase” phenomenon. The reason for this: Industrial enterprise data may mainly come from “quantitative” support, low base effect, and calibration adjustments by the Bureau of Statistics.
Among them, the cumulative industrial value added in January-February 2024 was 7% year-on-year, which not only exceeded market expectations, but also improved markedly by 4.6% compared to the cumulative year-on-year ratio in December 2023. However, in terms of prices and profit margins, there is still room for improvement. PPI in February was -2.7% year-on-month, and the decline increased from the previous month and remained the same in December 2023; the operating profit margin of industrial enterprises in January-February was 4.7%, a further significant decline of 1.06 pct from 2023, which means that the price side and profit levels of enterprises still need to be improved. This deviates from the bright performance of the January-February macro data. There is a clear “temperature difference” between the two.
In fact, the bank's two other sets of data: (1) M1 was 1.2% year over year in February. After the January jump, it turned back and continued to be at an all-time low, and after excluding the impact of the M0 (12.5% growth rate) Spring Festival effect, the year-on-year growth rate of corporate demand deposits has dropped to -1%. It has only occurred 5 times in the past ten years, including: 2014, 2019, 2020, 2022, and this year, which means that the M1 growth rate in March will likely drop further to close to the 0 axis or even negative values. Considering that M1 is about 3-6 months ahead of PPI, the company's actual financing costs may continue to rise passively, and the actual return on the enterprise may decline further. (2) In February, the nominal inventory ratio of industrial enterprises was 2.4%. It was recovered for two consecutive months, and its bottoming characteristics became more obvious. However, considering that PPI momentum is still insufficient and actual inventory is still high (5.1% in February), the reversal of the inventory cycle has not yet arrived.
Continuing to maintain the quarterly domestic market, there are still potential risks in the following three areas: 1) the pressure on real estate companies to “take the initiative to remove warehouses” continues to rise; 2) the slowing pressure on overseas economies is increasing, or increasing the risk of a decline in domestic exports; 3) increasing domestic deflationary pressure, etc. In fact, the latest data shows a further decline in real estate sentiment. In January-February, real estate sales area and sales volume both declined markedly from previous values, at -20.5% and -29.3%, respectively, and commencement, construction, and completion also generally declined.
In summary, the bank maintains the judgment of the previous period: although the current risks have not been clearly exposed, the “cost performance” of investment returns is gradually being reduced. It is expected that the upward momentum of A-shares in April will probably weaken, market volatility may rise, and gradually switch to value defense; wait for the March economic data. Once potential risks are clearly exposed, it will enter full defense. At that time, expectations for a new round of downgrades and interest rate cuts in the second quarter will further heat up.
April industry configuration: gradually shifting from “small to medium market growth attack” to “large market value defense”
The bank's proposed allocation gradually shifts from a “growth attack” to a “value defense”: first, colorful, especially gold, benefiting from US interest rate cuts expected in the second quarter; second, pharmaceuticals, including traditional Chinese medicine, pharmaceutical commerce, and innovative drugs, benefiting from weak economic cycles and increased sensitivity to declining interest rates on US bonds; third, the pig cycle, benefiting from a sharp decline in sales and stocks, and the logic of price increases under supply contraction; four is high interest rates on less price-sensitive businesses, including: state-owned banks, utilities, communications, construction, and decoration. transportation, etc.