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Cailianshe News, August 18 (Editor: Fang Fang)The latest strategic views of the top ten securities firms are freshly released, as follows:

CITIC Securities: Waiting for the policy to take effect, the volume and price bottoming out continues

After the State Council meeting on August 16 set the tone, the policy entered a period of intensive implementation. After the policy takes effect, it will improve domestic demand, and price signals will gradually become clear. The global market is recovering from the overly pessimistic recession trade, and the expectations of external demand are improving. With the support of "quasi-parity" funds and the easing of external disturbances, during the observation period when the policy takes effect, the market volume and price are expected to continue to bottom out. At present, it is recommended to continue to focus on the two main lines of dividends and overseas expansion, and then turn to the main lines of high-performance growth and domestic demand after the market inflection point appears. In terms of specific varieties, it is expected that the dividend strategy will continue to diverge. Dividend low-volatility assets will continue to focus on banks with considerable dividend yield expectations and improved asset quality expectations, hydropower and nuclear power with stable free cash return rates, and property insurance with stable premium growth. In addition, we believe that subsequent domestic exports will not deteriorate as quickly as the market expects, and the excellent companies in the overseas expansion sector that have fully reflected the US recession trade have regained allocation value.

As the three major external signals of policies, prices and others continue to be gradually verified, the focus of allocation is expected to shift to high-performance growth and domestic demand. It is recommended to focus on leading manufacturing industries such as electronics (intelligent driving and independent control of semiconductors), machinery (equipment upgrades and transformations, and overseas competition), pharmaceuticals after the impact of anti-corruption has been fully priced (industry integration, overseas breakthroughs), and leading Internet and consumer companies in Hong Kong stocks.

Huaan Securities: Market volatility awaits policy implementation, focus on pan-TMT catalytic opportunities

Fundamentals remain weak, and the market is volatile, waiting for policy to take effect. Macroeconomic and financial data in July continued to be weak but did not fall beyond expectations, and the impact on the market was limited. Overseas risk appetite has improved, especially overseas recession concerns and liquidity risks have been relieved, which has provided slight support to the market. As the decision-making level gradually rests and recuperates in late August, policies are expected to enter a round of concentrated introduction and implementation period.

In terms of industry allocation, the rotation or phased characteristics are still significant, and event catalysis is still the most important allocation clue in the short term or phased. At the current point in time, pay attention to 4 main lines that deserve attention: 1. The pan-TMT growth sector has ushered in a phased catalytic opportunity, focusing on industries such as communications, media, and electronics. 2. The theme of "new quality productivity", pay attention to repeated active directions such as equipment updates and low-altitude economy. 3. Pay attention to the phased opportunities of automobiles and real estate. 4. In the medium-term dimension, firmly allocate the prosperity direction in the second half of the year, including non-ferrous metals (industrial metals & precious metals), utilities (electricity), coal, and agriculture and animal husbandry (live pigs).

CICC: Pay attention to policy response during the bottoming period of A-shares

The current A-share market trading sentiment has cooled down sufficiently, which may have reflected the market's overly pessimistic expectations. After the market has continued to shrink significantly, both long and short funds are relatively cautious. Combined with historical experience, the current market has many bottoming characteristics. Looking ahead, with my country's stable growth policy still expected to increase, and the system is constantly improving under the current capital market policy dividend, investor confidence is expected to be re-boosted. Overseas, under the baseline scenario, we believe that the US economic growth is slowing down but may not be a recession. Employment and retail data show that the US economy is still resilient. The slowdown in inflation data supports the Fed's September rate cut and the improvement in sentiment. The US stock market has stabilized and rebounded; the impact of the reversal of the previous carry trade in the Japanese market has gradually weakened, and the stabilization of the external market has also helped to ease the risk appetite of domestic investors. At present, A-shares have adjusted to a historical low level. The dividend rate of the CSI 300 exceeds the 10-year treasury bond rate by more than 1 percentage point, which means that the valuation level of the market at this position has a good investment attractiveness; combined with the recent strengthening of the RMB exchange rate and the expectation of the Fed's rate cut, pay attention to the subsequent domestic monetary policy easing space.

In terms of industry allocation, areas that benefit from reforms and policies, such as education and equipment consumption trade-in, may still have relative performance in the short term; pay attention to the field of scientific and technological innovation, especially sectors with independent industrial logic; the medium- and long-term logic of dividend assets has not changed, but at present, we need to pay more attention to the fundamentals of the numerator and the sustainability of dividends. With the intensive disclosure of interim reports recently, we can focus on the progress of companies' mid-term dividends; export chains and globally priced resource products may be differentiated after a short-term correction due to overseas fluctuations.

CITIC Construction Investment: In the short term, we still need to wait for the offensive signal

The market is concerned about the recent sluggish trading volume. There were two typical rounds of trading volume reduction in the second half of 2012 and 2018. It is worth noting that both ended up with a slow decline and a sharp rise. From the perspective of market characteristics, we believe that this year's low trading volume background is relatively more similar to that of 2012. In addition, the experience of A-shares in the past two years also shows that once a rising market occurs, it is often rapid. Although short-term domestic demand data is still weak, the recent impact on the market is not obvious, indicating that expectations have also been significantly revised down. We believe that we still need to wait for offensive signals in the short term. Investors can consider holding on to winning assets with stable dividends first, and then deploying odds assets such as the direction of expanding domestic demand policies and growth industries on dips.

Key focus: electricity, telecom operators, large state-owned banks, automobiles, military industry, home appliances, pharmaceuticals, the Internet, etc.

China Merchants Securities: Some relatively rare A-share bottoming signals

Recently, some rare signals have appeared in the market. From historical experience, the emergence of these signals often corresponds to the bottoming out and recovery of the market. First, US manufacturing orders (March moving average) turned negative. Second, the adjusted core index turnover rate all returned to 0. Third, the growth rate of capital expenditure of listed companies turned negative. Starting from the second half of the year, the weak domestic demand environment has gradually ushered in a turning point. The semi-annual reports of listed companies will be disclosed, and the overall performance is expected to stabilize. The valuation of A shares has returned to a historical low, and important internal institutional investors have passedETFContinue to support A-shares and improve the internal stability of domestic capital in A-shares. The external environment has undergone major changes. The global economy is heading towards a recession and interest rate cut cycle. The external liquidity environment facing A-shares has begun to improve. The probability of market stabilization has further increased, and the allocation strategy of A-shares is also expected to usher in a turning point. From the previous external dominance, it has gradually returned to the relevant investment opportunities brought about by domestic policy efforts. Domestic consumer technology and medicine can begin to pay attention.

In terms of industry, taking into account previous performance, valuations, trading activity, changes in business climate, policies and event catalysts, it is recommended to focus on areas where interim performance is expected to continue to grow or marginally improve and where business climate is relatively high, specifically involving industries such as electronics (semiconductors, consumer electronics), food and beverage (liquor, food processing), agriculture, forestry, animal husbandry and fishery (breeding), utilities (electricity), pharmaceuticals and biology (medical devices, chemical pharmaceuticals) and other sub-sectors.

Guotai Junan：Fluctuation is the main trend, so stay patient

Historically, "ground volume" is one of the important conditions for "land price". Recently, the A-share market has been running at a reduced volume, and the daily trading volume has once dropped below 500 billion. Investors have expectations for "ground volume, ground price". The formation of "ground volume" is due to the narrowing of investor differences, and the negative factors fully express the exhaustion of short positions in the stock market. Comparing the "ground volume, low price" of the stock market in 2012/14/18: 1) Since the trading volume cannot be directly compared, from the turnover rate, the turnover rate of all A-shares at the bottom of the stock market is about 0.5%. At present, the lowest turnover rate of all A-shares is about 0.7%, and the value is approaching; 2) From the perspective of valuation pricing, the valuation percentile of the Shanghai Composite Index during the effective "ground volume, ground price" period is around the 20th percentile, and it is currently around 40%; 3) "ground volume" does not absolutely point to "land price", and the direction of stock market operation depends on whether expectations can be reversed. For example, the turnover rate of the A-share market hit new lows many times in 2012-2014 and 2018. It was not until the repressive financial policy turned to loose in the second half of 2014 and the social financing exceeded expectations in 2019, which pushed economic expectations upward. The market then started a mid-term rebound. Combining the industry turnover rate and valuation level, the areas that have been cleared and have low valuations in the current trading stage are mainly concentrated in finance (insurance), consumption (liquor/beverages and dairy products/white goods) and some manufacturing (batteries/aviation equipment/agricultural chemical products). If expectations can be revised upward, they may be sectors with greater elasticity.

Theme recommendation: 1. New power system. The central government issued opinions on accelerating the comprehensive green transformation of economic and social development, and is optimistic about power transmission and distribution equipment and intelligent direction; 2. Folding screen mobile phone. Q2 sales doubled and the three-fold screen is expected, and hinges/UTG glass and other components are optimistic; 3. Commercial aerospace. my country's low-orbit constellation is densely networked, and the satellite/rocket manufacturing and launch industry chain is optimistic; 4. Renewal. Supporting funds have been put in place and subsidies have been increased, and passenger cars/rail transportation equipment/agricultural machinery will benefit.

Minsheng Securities: Looking for the future after the "ground volume"

Behind the "ground volume" of A-shares, it is actually the result of the general trend of participants' changes and the exit of trading funds in stages: on the one hand, the main participants in the market are changing from high-turnover northbound and active equity funds to passive funds and insurance funds with low turnover; on the other hand, the activity of trading funds represented by margin trading and northbound trading has recently fallen to a stage low. Historically, the market bottom is often accompanied by "ground volume", but more characteristics of getting out of the bottom need to be presented: such as unit turnover rate can bring greater fluctuations, the number of industries with upward earnings has rebounded, and the sentiment of institutional investors has begun to recover. The market characteristics themselves are still waiting for the power to break the low volatility, similar to around February this year. We believe that the trading confusion in the market at this moment should not cover the understanding of the fundamental environment.

It is true that A-shares are still tangled in the trading structure, but the path of fundamentals has begun to become clear, and the tailwind of physical assets is slowly blowing. Recommendation: First, after multiple tests, upstream resource assets are still our top recommendation: non-ferrous metals (copper, aluminum, gold), energy (oil, coal), shipping (oil shipping, shipbuilding, dry bulk); second, for relatively advantageous assets under declining capital returns, we recommend banks that benefit from the gradual stabilization of interest rate spreads, and resilient infrastructure: ports, railways; third, look for industries in the manufacturing industry with better supply and demand patterns or expectations of improvement, and recommend: rail transit equipment, refrigeration and air-conditioning equipment, power grid equipment and home appliances.

BOC Securities: Dividends are expected to regain their advantage

Looking ahead, overseas demand will weaken marginally in the second half of the year, and downward pressure on domestic demand will increase. We need to further observe the strength of subsequent policy hedging. In contrast, this week's US July inflation data has to some extent repaired the market's previous overly pessimistic expectations of a US recession, but the slightly weaker core CPI has not changed the current market's expectations for the Fed's September rate cut. As a result, concerns about overseas recession have eased temporarily, and overseas risk assets have rebounded significantly this week.

Dividends are expected to regain their advantage. This week, the market fluctuated at a low level with reduced volume under the expectation of weak domestic demand. Although the A-share market as a whole did not show a seesaw effect, the substantial adjustment of long-term bonds has increased the demand for dividend asset allocation. After experiencing a period of adjustment caused by factors such as dividends and trading congestion, dividend assets have regained strength this week. We believe that before the weak domestic demand pattern shows obvious signs of recovery, the logic of dividend allocation has not been damaged, and this round of dividend style adjustment driven by trading logic may be coming to an end.

SDIC Securities: Where to go now that the volume has reached its extreme limit?

From a trading perspective, the most striking feature is that the A-share trading volume has shrunk significantly since July, with the average daily trading volume of all A-shares this week reaching 529.4 billion. Here, we counted six rounds of A-share trading volume below 600 billion since 2020, and found that the ground volume rebounded after about 20 trading days, and the upward driving force from shrinking volume to extreme probably corresponds to the stage-by-stage pullback formed by the improvement of risk preference. There is often a "last drop" between ground volume and land price. In the process of rebounding after the "last drop", technology growth + small and medium-sized stocks (CSI 2000, Science and Technology Innovation Index) showed obvious upward elasticity. At present, the external "recession trading" has roughly come to an end. Based on the premise of the Federal Reserve's preventive interest rate cut in September, the external drive of A-shares has obviously lower tail risks; for the internal, the new soul pricing indicator of A-shares: the difference in the growth rate of central and local fiscal expenditures has further dropped to -5.92pct, which means that the market may still lack momentum for upward movement, and the turnaround still needs to be tracked.

Short-term overweight industries: global competitiveness of industries (commercial vehicles, ships, home appliances, tires, optical modules, construction machinery), high dividends (utilities (electricity), energy (petrochemicals) and high-dividend consumption), technology stocks and US stock mapping (optical modules + consumer electronics + chip design), and a small amount of resource stocks (gold).

Industrial Securities: Some positive signals in the bottom area

The turnover of A-shares has shrunk significantly recently, and the market trading sentiment has once again reached a "freezing point". However, we have also seen that there are still some positive signals emerging in the bottom shock. It is recommended to continue to pay attention to the repair opportunities that may be brought by the mid-year report window. Referring to historical experience, after the transaction low point, as the volume bottoms out and rebounds, the market will usually usher in a phased repair. We have counted the performance of the A-share market after 11 transaction lows since 2019. It can be seen that in the subsequent 30 trading days, the winning rate of major broad-based indexes exceeded 80%, among which the All A andGEMThe winning rate of the ChiNext Index is 100%, and the winning rates of CSI 500, CSI 1000 and CSI 2000 also exceed 90%. Judging from the average increase or decrease, the ChiNext Index, CSI 1000 and CSI 500 ranked at the top.

Looking forward, we believe that similar to late April, as risk appetite enters a window of slow climb and repair from an overly pessimistic state, the turning point may be in August, and the market style will also shift from over-defense to both offense and defense, and spread from high dividends to high prosperity and high ROE. But we must emphasize that this spread is limited, and it is a spread in the beta of large-cap leaders in the context of high-win investment era, and does not support the market to return to the style of small and micro-caps and theme speculation.