Shanghai Composite Index continued its narrow continuation trend, closing down 0.36%, to close at 3,378.47 points, ending last week's four consecutive positive trend; the GEM index was sluggish, closing down 2.25%, closing at 1882.69 points. The total transaction volume of the two cities was 545.8 billion yuan. The majority of the industry sector fell. Banks and insurance stocks turned against the market and turned red. Their role in maintaining the market was significant. (Click to view>>Bank stock market Insurance stock market)
Analysts focused on analyzing the performance of the small and medium-sized third-quarter newspapers this week. Analysts generally believe that the three quarterly advance notices show that the fundamentals are stable, the uptrend of the shock market is not over, the market is stable, and the current A-share market structure is good. Slow bull market will continue.
Securities Co., Ltd.:Actively grasp
The Chenshun Team of Essence Securities stated that, overall, we believe that the A-share market will be very favorable in terms of sentiment, economic expectations, liquidity environment and risk appetite next week. We continue to be optimistic about the October market, and we expect the Shanghai Stock Exchange Index to innovate again. Since January 2016, it is recommended that investors actively embrace the "Red October."
In terms of structure, we suggest to focus on banking, brokerage, steel, coal, communications, and new energy vehicles. The short-term theme activity is expected to be higher, focusing on Xiong'an, Hainan, state-owned enterprise reforms and artificial intelligence.
Guosen Securities:China Small and Medium Business Reports Reported Strong Results
Guosen Securities said that from the current data available, the net profit of listed companies in the third quarter of 2017 still maintained a fairly good performance growth rate. Since most of the Main Board listed companies have not yet released the third quarter report or performance forecast information, the current performance statistics of all A-share and Main Board companies may not be different from the actual growth. However, according to the information disclosure requirements of the Exchange, the listed companies of the small and medium-sized board and the Growth Enterprise Market have already disclosed the performance forecast information of the three quarterly reports at the current time. From the published data, the performance growth of the listed companies of the small and medium-sized board and the Growth Enterprise Market in the third quarter Remarkably picked up.
In terms of configuration, the current major global PMIs, including China, have reached new highs in recent years, indicating that the global economy is accelerating its recovery. Judging from the information published in the third quarterly report of listed companies, the net profit of listed companies in the third quarter still maintained a fairly good performance. In particular, the growth rate of small and medium-sized board and GEM companies has obviously increased. We believe that the current structural slow market of the A-share market will continue. In the direction of investment, we recommend focusing on three main lines: First, companies in the traditional industry that can fully benefit from the increase in industrial concentration. Second, industrial upgrading brought about by innovation-driven industries in emerging industries such as 5G, new energy vehicles, nuclear power, new materials, and artificial intelligence. The third is consumption upgrade. After the cycle, it focuses on opportunities for the consumer sector.
Haitong Securities: Why the SME Index has risen the first since this year
In the first week after the National Day in October, the overall performance of A-shares was relatively good, and the market volume increased. The Shanghai Composite Index, the Shanghai and Shenzhen 300, and the small and medium-sized board indexes all reached new highs during the year, and the current market upward band will continue. There is a phenomenon in the market that deserves deep thinking. The small and medium-sized board index has surpassed the Shanghai 50 by unknowingly, and has become the largest index this year.
In this regard, Hai Tong Securities Yu Yuen root team pointed out: 1 small and medium-sized board index has risen to the first place this year, since August, gradually overtake the Shanghai Stock Exchange 50, due to outstanding performance, the three quarterly advance notice of net profit growth of 29.9% on average, or increase The top 29 companies have an average of 46.7%. 2 The directional RRR cut and the growth of the money supply indicated that the policy and funding were well oriented. The three quarterly advance notice showed that the fundamentals were stable. The upswing of the shock market put forward at the beginning of June was not over, and the market was stable. 3 Pay attention to the matching of performance and valuation, and be optimistic about financial, consumer white horses, construction, and quarterly value growth stocks.
Huatai Securities: Configure profitability and pay attention to interest rate
The Daecom team of Huatai Securities pointed out that post-holiday long-term interest rates have risen sharply, reflecting bond investors’ concerns about financial deleveraging and confirmation of economic resilience. We believe that the financial deleverage at the end of the year may accelerate slightly, but it only affects the A-share discount rate. Concerns over credit recovery and damage to profitability recovery can basically be eliminated. We should use shocks to firmly grasp corporate profits to repair the main line.
In terms of strategy, profitability is still on its way to continue to focus on the "golden chemical" combination of profitable recovery: rare metals (mineral of rare earths) and electrolytic aluminum (Yunshan shares); chemical raw materials (Wanhua Chemical); construction machinery ( Liugong); Bank (China Merchants Bank); Brokerage (GF Securities).
Industrial Securities: No fear of heights, continue to add financial leaders and core assets
Wang Delun's team of Industrial Securities stated that the index has reached a new high, but it still does not need to be fearful. In the October monthly report, we emphasized that “after the holiday, it will be a time window of high performance and price ratio. A shares will usher in the red October.” Last week, the market saw a new high in the year. However, there are still no fears at this stage: 1) The important meeting will be held soon, the stability of the market is expected to increase, and the index will remain stable at least; 2) Economic data will be released soon after the first two months of consecutively failed to reach expectations. The data will be larger in September. The probability of warming even exceeds expectations, providing positive catalysts for the market, especially cyclical stocks; 3) After the directional demotion, the liquidity will at least remain stable. Therefore, the long window is still not over, and the red October will continue.
Continue to add core assets and financial leaders. Since the beginning of the year, our recommendation for core assets has continued and remained firm. Even if the adjustment in the third quarter caused the market to be pessimistic, we also insisted that the “adjustment period is the layout period.” At present, the stock price of Moutai has reached new heights, and the core assets will be re-started after the rest. There will still be excess returns before the end of the year. For the financial sector, we have continued to favor financial stocks similar to supply side reform under financial supervision since April. At the end of the current year, financial stocks are also suitable for flattening volatility and locking in revenue. Overweight banking and insurance have strong fundamentals, and brokers have room for compensatory growth. Therefore, their cost performance will continue to increase.
In terms of themes, continue to focus on red flags. The follow-up index risk is small, and the policy before and after the important meeting is expected to heat up. It is recommended to continue to pay attention to state-owned enterprise reform, debt-to-equity swap, “Beijing-Tianjin-Hebei 3.0”, “One Belt and One Road” topics under the “Red Flag Recruitment”. And catalysts.
Tianfeng Securities:Pessimistic expectations of repair, cycle stocks to meet the rebound opportunity, optimistic about the green stocks in the mid-term!
Tianfeng Securities pointed out that even if some Fed officials are still confident that inflation will continue to rise and continue to boost market interest rate expectations, it will not have a substantial impact on China’s monetary policy environment. A key logic has been discussed many times before. To some extent, China's monetary policy environment is hampered by the spread between China and the United States (the difference between China and the United States 10-year Treasury yields), and the direction of change in US Treasury yields depends on future economic growth and inflation expectations. It is the change in nominal GDP, not the increase in interest rates and the shrinking of the table. At present, there are still no factors that trigger the trend of upward inflation in the United States. Prior to this, no matter whether it is shrinking the table, raising interest rates, or tax reform, there is no restriction on the domestic monetary policy space.
In terms of configuration, pessimistic expectations are repaired, and cyclical stocks usher in a good opportunity to rebound again. Demand remains resilient, with September economic data released next week. Restricted supply of environmental protection products, most local documentary rules exceeded expectations. In addition, with the recent rebound in spot prices for steel, cement, paper, and aluminum, the expectation of the previous pessimism began to gradually recover, and the release of steel, cement, paper, and electrolytic aluminum with performance matching and valuation were recommended in turn.
State Securities:Reversing the road is still profitable driving industry configuration
Guo Jin Securities Li Lifeng's team pointed out that in the third quarterly earnings release of listed companies, profitability drove the October industry configuration. October is the focus of disclosure of the A-share three-quarter report. The three quarterly reports of all listed companies in Shanghai and Shenzhen will be fully disclosed on October 31. As of October 15, there were 26 listed companies such as Fangda Chemical, Bohui Paper, Qibin Group, China Jushi, Hongxing Development, Zhongyuan Special Steel, Beixin Building Materials, Wanhua Chemical, and Hongda Mining. Three quarterly results. According to the statistics on the disclosure of listed companies, as of October 15th, there were 688 companies with pre-increase in A-share performance, which is nearly 4 times the number of companies with 143 companies. Benefited from factors such as the rise in crude oil prices in the third quarter, supply-side reforms, and consumption upgrades, the three quarterly reports of listed companies in 2017 are expected to continue their booming trend.
From the perspective of the history of October's excess earnings sector, earnings drive industry allocations in October (for excess returns). Historically, the sectors that received excess returns in October were mostly driven by earnings (three quarterly reports). As of October 15, Chemicals and Electronics were the first two industries with the largest number of pre-incremental companies in the three quarters. The number of pre-incremented companies in the industry was 84 and 75, respectively, accounting for 23.11% of the total number of pre-incremented companies. From the point of view of industry prosperity, the industries in which the three quarterly profit growth rate is higher than that in the second quarter are mainly concentrated on “iron and steel, building materials, papermaking, gardens, liquor, household appliances, heavy trucks, auto parts, photovoltaics, LEDs, and optical components”.
In terms of configuration, standing at the current point in time, we continue to be optimistic about the view of the A-share market, and the A-share rally window is still open. Positive factors remain in overseas markets: After the Trump administration’s tax cuts were delayed for half a year, the overall framework for tax reforms was finally available. Although the tax reductions offered by the larger framework had been reduced, it was still the United States over the years. The largest scale tax cut in history is expected to introduce a formal draft of the tax reform before November 13th. It is more likely to be landed within the year. If Trump's tax reform is passed, it will be regarded as injecting a dose of “strengthen the US economy”. “Needle”, Lido’s equity market, etc.; domestic factors in October also showed positive changes: in 2017, the domestic economy is highly likely to achieve a soft landing during the year, and the implementation of “targeted RRR” helps A share earnings (ROE). Structural improvement, and the release of the signal of warmer liquidity, the probability of monetary policy tightening in the near future is almost zero. As the meeting is approaching, reforms will increase risk appetite.
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