A shares have entered the bottom range of the cycle, just wait patiently

2022-07-11 0 By

Thanks for the invitation of “Red Weekly”. Baichuang Capital is an old friend of “Red Weekly”. We have spent many years together.On the occasion of this festival, I wish Red Weekly a better and better future.We are also happy to share our views for the reference of red Weekly readers.After A dismal start to 2022, many investors are worried about the market’s performance for the year as A whole.But we think A shares may have A good performance in the future.In fact, looking back over the past few years, there has almost always been a big drop in the first quarter of each year, but when the market starts off badly, it’s not always a bad thing, as the Shanghai Composite index has turned red for three consecutive years.Compared with 2021, there are five stronger factors for the capital market in 2022. First, after the adjustment in 2021, the valuations of many industries and companies are already cheaper, which is the core factor.Second, although the epidemic is still going on, the rate of severe illness and death has dropped significantly as the vaccination rate has increased.This is like a cyclical industry. When the industry is already at the bottom, it may linger for a while, but the trend is definitely positive.Third, China’s comparative advantage is actually increasing. From the current external environment, the overall situation of other major economies is not as optimistic as that of China.Fourth, after the real estate market decline, funds will naturally pour into the stock market, but the current lack of profit effect;Fifth, China’s monetary policy is already easing.Looking forward to the future, we believe that the stage of the negative factors have been fully demonstrated, the end of the fund is expected to be completed stage.This means that there are still many structural opportunities in the market. We are relatively optimistic about the industries with high long-term fundamentals, such as the consumer industry. After the valuation adjustment in 2021, the circuit including white electricity, food and beverage has been in a reasonable valuation range, with good investment opportunities.The same is true of the pharmaceutical industry.At present, everyone’s attention is on collective mining, but the policy of collective mining has tended to be more mature and rational, and the valuation of relevant pharmaceutical companies has been at a low level in its history.In addition, the novel coronavirus epidemic also caused a large negative impact on medicine, but even under the double pressure, the medicine sector maintained a double-digit growth in 2020, and it is expected that the performance of 2021 will not be too bad.In contrast, the new energy industry chain will be in the “moment of high light” in 2021, and many investors have already had the view of “overheating” at the stage.But we believe that after the outbreak of 2021, the value of the new energy industry chain is being transmitted from the upstream to the middle and downstream.Among them, the structural opportunities presented by the battery technology route, as well as the downstream vehicle sector are very worthy of attention.In addition, TMT, chemical, military and other booming areas may also have good investment opportunities.Last but not least, a word of encouragement to red Weekly readers. Tough times are tough, but every big market goes through times like this. Just be patient.As long as you own a company with long-term investment value, there is no need to be too anxious, and there is no need to be pessimistic.Wish you all the best in investing in the Year of the Tiger!