For the trend of A shares in the second half of the year, most brokers have a positive attitude, among which Industrial Securities said that it is necessary to bid farewell to bear market thinking; CITIC Jiantou Securities expects that the market is expected to attack again in the third quarter after the new round of policy overweight; Cinda Securities judged that stock funds covering positions will bring a bull market atmosphere; CITIC Securities is more optimistic that the economy will climb upwards in the second half of the year, and A shares will reappear slowly.
It is worth noting that for the rebound in the second half of the year, brokers often use the expressions "continue to repair in the fluctuation" and "move after making a decision" to describe the rising market, which is not achieved overnight.
In terms of investment style, there are differences among brokers. Bank of China Securities said that combined with the full pricing of valuation squeeze and profit reduction in the first half of the year, growth returned to the starting line. Ping An Securities said that the dislocation of internal and external cycles makes China's assets more attractive in the world in the short term, and the inflow of incremental funds continuously strengthens the repair of market sentiment, and industries with higher growth and prosperity have greater flexibility.
However, CICC believes that the opportunity to shift from market style to growth needs to pay attention to overseas inflation and China's steady growth. Everbright Securities said that in the second half of the year, under the background of falling profits, the expected value outperformed the growth and consumption outperformed the manufacturing industry.
As for the layout direction in the second half of the year, high prosperity track, steady growth plate and large consumption are the main lines mentioned by brokers, especially photovoltaic, new energy vehicles, first-line liquor and household appliances.
In the view of brokers, A shares are expected to go up in the second half of 2022.
Citic Securities said that with the gradual increase of positive and favorable factors, China's economy will pick up in the second half of the year. It is predicted that the second quarter will be the lowest point in the whole year, and the economy will climb upwards in the second half of the year. The economic growth rate will return to a strong level in the third and fourth quarters, and it is still expected to achieve a relatively reasonable high growth rate in the world. On the market side, CITIC Securities predicts that policies will work together to support rapid economic recovery, ease external risk pressure, and A-share slow cattle will reappear. In a year, the market can be divided into three stages: emotional calm, valuation repair and valuation switching. At present, the market is in the second stage.
According to CICC, the current valuation of China stock market is at a low level in the historical range, which has a mid-line value. However, the internal and external environment of the market may still face certain challenges in the second half of the year. The upward trend of the market in the second half of the year needs more positive catalyst support, and it is not appropriate to be overly pessimistic in the medium term. In terms of liquidity, the interest rate level may decrease steadily, and the improvement of stock market liquidity depends on the improvement of risk appetite. For investors, the industry configuration should be based on "stability", first defending and then attacking.
Citic Securities said that the short-term A-share market still faces a series of fundamental challenges after the "Golden Pit" rebound. Investors need to wait patiently for the bargain-hunting layout. It is expected that after the new round of policy overweight, the market is expected to attack again in the third quarter, and the growth style will lead.
Guotai Junan pointed out that in the second half of 2022, economic expectations improved, risk assessment declined, risk appetite rebounded, and the index operating range was revised.
Everbright Securities believes that the uncertainty of profit and the downward adjustment of expectations will still be the resistance that the market needs to overcome, and the turning point may be in the fourth quarter. In the third quarter, the overall market may remain volatile, with staged downside risks. If the economy improves, the turning point of the market is expected to appear at the turn of the third and fourth quarters, and the market index may perform better in the fourth quarter. However, the previous market lows have provided a relatively sufficient margin of safety.
Haitong Securities judged that the market trend is upward, but it is still possible to rest in stages, and the downward revision of profit is one of the triggering factors. Although the overall valuation of A shares is not high, compared with the low point at the end of April, the buffer effect on profit reduction may be weakened. Judging from the nature, the impact of this year's profit forecast reduction on the market is similar to that in July 2020.
Since the rebound of A shares in the second quarter of 2022, growth stocks have performed well. At the current point in time, there are differences among brokerage institutions as to whether the value or growth strategy is dominant in the second half of the year.
China Merchants Securities believes that according to the stage of A-shares, the second half of the year will be characterized by a shift from liquidity-driven to social-driven, and accordingly, the style of small-cap growth to large-cap value will evolve.
Like China Merchants Securities, Everbright Securities also believes that in the second half of the year, under the background of falling profits, the expected value will outperform the growth and consumption will outperform the manufacturing industry. It is expected that consumption and steady growth will have outstanding performance in the second half of the year. At the same time, the high dividend strategy is also worthy of attention.
However, many brokers such as Bank of China Securities and Ping An Securities are more optimistic about the performance of growth stocks in the second half of the year. Bank of China Securities said that the relative profit advantage of manufacturing agglomeration in the middle reaches is expected to remain at a high level in the second half of the year. Combined with the full pricing of valuation squeeze and profit reduction in the first half of the year, growth returned to the starting line.
Ping An Securities pointed out that in the market environment in 2022, there are new inflationary pressures from the outside, short-term epidemic shocks from the inside, and policy stimulus for moderate and steady growth and structural adjustment. The choice of this round of market is more similar to 2020, and growth is still an important allocation direction of the market in the second half of the year.
Guotai Junan also believes that with the confirmation of the bottom of the economy and the bottom of the market, the policy of steady growth has landed, investors have shifted from panic and risk aversion to moderate acceptance of risks, and the investment style has shifted from cash assets that only emphasize performance certainty to profitable high-growth sectors with marginal improvement in demand, and they are optimistic about growth companies that benefit from policy support and have greater resilience to demand recovery brought about by incremental economy.
In terms of overall configuration, most brokers recognize the three main lines of "steady growth", high prosperity plate and large consumption in the second half of the year.
CICC suggested that in the context of overseas interest rate hike expectations, the upward cycle should be appropriately shortened and three main lines should be paid attention to. First, some areas with "steady growth" or policy support, such as infrastructure (traditional infrastructure and some new infrastructure), building materials and automobiles. Second, areas with low valuation and relatively low correlation with macro fluctuations, especially some areas with high dividends, such as infrastructure, electricity and public utilities, hydropower and so on. Third, some areas where fundamentals have bottomed out, supply is limited or prosperity continues to improve, such as agriculture, some non-ferrous and some chemical sub-sectors, coal, photovoltaics, military industry and so on.
The allocation idea given by Huatai Securities is to grasp the major marginal changes after the second quarter and the existing logical transaction degree, the discount rate pressure at the peak of US debt, the profit distribution pressure at the peak of industrial chain, the current industrial cycle, the inflation structure and the loose stock price of real estate are not expected to be high. Therefore, midstream manufacturing is the first choice, followed by consumption. In the subdivision of varieties, combined with the bottom-up logic, the midstream manufacturing industry considers machinery, electronics, automobiles, electronics and military industry.
Everbright Securities believes that there are three main lines of subdivision within consumption in the second half of the year that deserve attention. One is the liquor medicine with high certainty of prosperity and the bottom warehouse of the fund; Second, cars and home appliances that benefit from consumption promotion policies; Third, the prosperity of social services, trade and retail is expected to be restored.
CITIC Jiantou Securities said that the industry can pay attention to military industry, photovoltaics, new energy automobile industry chain, automobiles, food and beverage, coal, brokers and so on. The theme focuses on the digital economy and the reform of state-owned enterprises. In the medium term, the index strategically focuses on the science and technology innovation board.
In terms of industry allocation, GF Securities suggested embracing China's advantageous assets with "warm policies" and focusing on three main lines: post-epidemic recovery, "re-leverage" and inflation chain transmission.
First of all, pay attention to the certainty of internal and external demand, such as photovoltaic industry chain, automobiles and parts, new energy vehicles, automotive electronics, retail, sports, tourism in compensatory consumption of residents, home appliances and automobiles stimulated by policies.
Secondly, it is suggested to pay attention to the potential direction of "adding leverage" by residents, enterprises and governments, such as real estate, selling to-C chains, internet media, innovative drugs, coal chemical industry and scenery. In addition, it is suggested to pay attention to the "stable supply and demand" of upstream resources and materials such as coal and potash fertilizer, as well as the improvement of the supply contraction profit of aquaculture.
In terms of theme investment, it is suggested to give consideration to the needs of security and transformation, and pay attention to the theme of energy security and state-owned enterprise reform. The former is coal chemical industry, oil and gas equipment, photovoltaic components and wind power components, while the latter is aerospace and green power.
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