On April 20, due to the price increase of commodities , the performance announcements of some companies that were lower than expected, and the impact of the epidemic, the market's confidence in popular track stocks collapsed. Popular track stocks led by CATL , Mindray Medical and Sungrow fell sharply. The GEM index fell below 2,400 points and hit a new low in the past year. How will the subsequent market perform? Are popular track stocks still worth holding or buying the bottom of ? This article will focus on analyzing the above issues.
The certainty of the fundamentals has not yet been determined. We should be cautious as to whether the market bottom has arrived.
The editor reviewed the slump in the past 15 years, divided the policy bottom and the market bottom, and analyzed the favorable policies and market bottom valuations during the review period. In the digit range, look for the triggering factors for to attribute to turn upward from the market bottom. The four sharp decline ranges include: 2007-2008, 2011-2012, 2015-2016, and 2018-2019.
Criteria for dividing market bottom and policy bottom: This study is based on the trend of Shanghai Composite Index , and selects the lowest value in the past 52 weeks as the market bottom. The base point for policy is to use the node where the policy changes significantly during the market downturn or when the government first releases easing policies after the stock market peaks and rebounds. The empirical results of
show that the policy bottom leads the market bottom, and the leading time is 1.5-12 months each time. Based on a review of past stock market crashes, we found that the policy bottom preceded the market bottom. Generally speaking, after monetary and fiscal policies are relaxed, the market will often be revalued due to the influence of funding, policy and other factors. However, due to different market sensitivity to good news, different macro backgrounds, and different policy strengths, the market's lag time to the bottom of the policy is also different.
Several bear markets are separated by three to four years. The policy bottom is generally 1.5-12 months ahead of the market bottom.
Common benefits include: central bank interest rate cuts , loose fiscal policies, Central Huijin's "national team" funds entering the market, pension funds entering the market, improving the A-share issuance system, reducing A-share transaction costs , brokers and funds bargain hunting, etc. The bottom valuation position of the
market is generally between the 5th and 20th percentiles. However, it is worth noting that during this period, good news does not necessarily trigger the market to turn upward, and the result is often a low valuation (5 -20th percentile) with a high-certainty fix for fundamentals. For example, 4 trillion in 2008; the Central Economic Work Conference in December 2012 clearly proposed the task of stabilizing growth; on January 27, 2016, the supply-side reform plan promoted steel, coal and other cyclical stocks to lead the rise, driving the overall market to improve; in December 2018 The trade friction between China and the United States eased in March, and the reserve requirement ratio was lowered in January 2019.
The bottom of this round of policies will appear in July 2021, and the market bottom has not yet been reached.
In terms of monetary policy, it has been nine months since July to December this year. Good news has been emerging recently. Nearly 20 high-performance companies intensively disclosed their monthly reports on March 9. All listed companies that have disclosed monthly reports have positive revenue and net profit growth rates, conveying good news to the market and releasing a signal of stability. From March 7 to 9, 24 listed companies except ST disclosed their repurchase plans and repurchase progress. 15 of them have announced their annual reports, and 9 of them have achieved an expected increase in net profit. At the same time, 13 listed companies issued shareholding increase announcements, conveying to the market the controlling shareholders’ confidence in the company’s future development.
At the level of trigger factors, low valuation factors have been determined, and the repair of fundamentals still needs to wait. The current valuation of the Shanghai Composite Index is 11.68, which is lower than the 20% percentile since 2000 and only 4% away from the lower 10th percentile of 11.24 times (2949 points). Although the two sessions set the GDP target at a higher 5.5%, no clear economic support has yet been found in terms of traditional economic variables such as real estate, infrastructure and the impact of the epidemic on consumption.
The investment logic of track stocks is still there, but the valuation is still not undervalued.
Judging from Sungrow’s annual report released yesterday, its performance was lower than expected. From a financial reporting perspective, revenue growth was 33% lower than expected, possibly due to lower-than-expected centralized installed capacity.The obvious increase in costs is mainly due to the increase in four expenses. R&D expenses and sales expenses increased by 44% and 62% respectively, indicating that competition in the domestic market is fierce. The price of domestic inverter is not dominant, and other assets and credit are reduced. Value losses have increased significantly. Credit impairment losses are related to bad debts and may be related to EPC business cannot be recovered related; financial risk , the proportion of short-term debt has increased, but the total debt has not changed much, current ratio has not changed much, and is generally controllable; however, operating efficiency has declined, inventory turnover rate has declined, The significant increase in sales expenses further confirms the intensified market competition. According to the disclosed data, except for the rapid growth of the energy storage business, the proportion of other businesses has not changed much and the growth rate is low.
From the perspective of gross profit margin, the gross profit margin has not changed much. However, the gross profit margin remained at around 28% in the first three quarters, and dropped directly to 22% in the fourth quarter. The gross profit dropped by half in the fourth quarter, which means that the profit of 1.2 billion is gone. The main reasons why
's performance fell short of expectations were: performance and revenue were slightly lower than expected + surge in costs in the fourth quarter + increase in bad debts + intensified competition + surge in expenses. These factors are also problems encountered by leading companies such as CATL and Mindray Medical. Historically, the long-term profit-making effect of high-prosperity industries will face the problem of mean reversion, because driven by profits, market competition will inevitably occur. Only excellent management can lead the company to maintain its advantages and survive to the end.
Just like Weichai Power Chairman Tan Xuguang’s views on the industry and new energy development. He pointed out that there will be a catastrophic overcapacity of new energy vehicles. At present, CATL’s leading position in power batteries is being challenged. Sungrow’s competitors in the inverter market are all going public and expanding production. The current valuation of and the decline of are the certainty of whether these companies can still achieve substantial growth in the future. question, only their performance can reverse the market's judgment, and investors need to pay close attention to changes in the company's fundamentals and future performance.
It is the financial reporting season. There are many research reports on performance on the market, but there are not many truly reliable analysts. The gap between analysts and analysts is often very large. Some prediction accuracy can be as high as 97%, while others are only 50% and have no reference value.
This article comes from Securities Star
