Thoughts on the allocation of Hong Kong stocks in January and November

1.1. Review: October strategy "counter-attack in the bottom region of Hong Kong stocks"

• July 15, "the bumps in the initial stage of Science and Technology Changniu"A clear reminder: monthly market volatility, after July 15, especially in August into the performance period, the emergence of long-term ideals and short-term performance reality when the shock adjustment. Enter the critical period of defusing stock risk. It is recommended to wait for concussion before layout.

• The report "short-term wind and rain, long-term opportunities" in early AugustLooking forward to August, the Hong Kong stock market is still subject to risk suppression, and some long-term quality assets will take the lead in bottoming out. Short-term shock, long-term opportunities are emerging.

• August 28, "Hong Kong stocks enter the bottom area, adversity breeds opportunities"To judge, Hong Kong stocks have entered the bottom area. The Hong Kong stock market showed a systemic risk shock after the education "double reduction" policy in July, which experienced killing valuations and releasing risks. The report on August 31, "bottom-grinding stage, returning to the nature of investment" once again emphasizes that Hong Kong stocks have entered the bottom area, but it is not a V-shaped reversal, but a continuous "bottom-grinding". Remind you that there may be twists and turns in credit risk in the late third quarter and upward pressure on US bond yields in late September.

• September 24 report "looking at the trend opportunities in the dual-carbon era from the Perspective of Power restriction"It is suggested that the cyclical stock market in the fourth quarter should be on guard against the shock adjustment caused by the downward demand. "the short-term cyclical stock market rhythm is affected by demand (expected) fluctuations, but the medium-term cyclical stock market will differentiate based on the degree of supply constraints."

• The strategy report "counter-attack in the bottom area of Hong Kong stocks" at the beginning of October 1It is pointed out that the Hong Kong stock market has been at the bottom of the long-term valuation, and Hong Kong stocks showed a systemic risk impact in the third quarter. After the overall collapse, the risk has been fully released. In fact, the Hang Seng Index, the Hang Seng Composite Index and the Hang Seng China Enterprises Index, the three main indexes of Hong Kong stocks, rose 3.3%, 2.3% and 2.7% respectively in October.

1.2. Outlook: Hong Kong stocks will continue to "bottom out" repeatedly in the bottom area, and the structural market will still follow A shares.

• First, the United States is expected to implement Taper in November, adding outbreaks, inflationary pressures, or short-term disturbances.

1) inflationary pressures in the United States are still in the process of rising. The lagging response to global water release, supply chain risks caused by the epidemic, commodities, chips and other shortages continued, and inflationary pressures began to change market policy expectations.

2) the recent epidemic situation has been repeated, and the economic expectations of Europe and the United States have weakened, so it is difficult for long-term debt interest rates in the United States to repeat the impact of the rapid rise in February-March this year after Taper. Euro zone Markit manufacturing PMI and services PMI continued to decline in October, while US Markit manufacturing PMI in October was 59.2, the lowest since March and below expectations of 60.5.

3) the short-term compromise reached on the debt ceiling is postponed to December 3, so there is still a game around the debt ceiling in late November, and there is still moderate upward pressure on US bond interest rates.

• 第Second, China's policy determination is still strong, and the downward pressure on the economy may be greater in the fourth quarter, thus affecting the short-term sentiment of overseas investors towards Chinese assets.

1) China's economy will continue its downward trend in October 2021. China's GDP grew by 4.9% year-on-year in the third quarter, down 3 percentage points from the second quarter. In October, on the production side, under the background of power restriction and double control of energy consumption, the PMI index declined and continued to fall below the tipping point; on the investment side, the monthly growth rate of fixed asset investment in September was-1.71%, the lowest since the epidemic; on the consumer side, retail sales of consumer goods rebounded in September compared with the same period last year, and since October, the epidemic in many places across the country has gradually begun, which will continue to drag on the consumption performance in the fourth quarter.

2) the higher-than-expected upstream of PPI triggered by the supply side may end.

• Third, the changes in China's macro-control policies, especially industrial policies, still need overseas investors to digest risks through a period of observation and understanding, and finally wait for fundamental data to prove or falsify some logic.

1) in October, Comrade Guo Shuqing, party committee secretary of the people's Bank of China and chairman of the Bank of China Ltd. Insurance Regulatory Commission, said in an interview with Xinhua that in the rectification and reform of 14 Internet platforms, financial management departments have successively raised thousands of questions, most of which have received positive responses, and about half of them have landed, and more significant substantive progress will be made by the end of this year. The Internet is the mainstay of the Hong Kong stock market, and the policy is expected to improve significantly in the fourth quarter.

2) on October 23, the 31st meeting of the standing Committee of the 13th National people's Congress made a decision authorizing the State Council to carry out pilot work on real estate tax reform in some areas. The increase in real estate tax may have a short-term impact on market sentiment.

3) since October, the National Development and Reform Commission and other ministries have jointly regulated coal prices and increased coal production capacity to ensure coal supply. finally, coal prices have dropped sharply, especially in the thermal coal futures market.

• Fourth, looking forward to November, the important domestic political events are the upcoming sixth Plenary session of the 19th CPC Central Committee and the Central Economic work Conference, which will point out the general direction for the layout of next year and the next few years.

We expect toAdvanced manufacturing, new infrastructure and "specialization" represented by clean energy, new energy vehicles, semiconductors, digital economy, 5G applications, Internet of things, etc.And so on, will be the sustainable strategic development direction in the future, will also usher in the structural stimulus policy.

The market-oriented reform of factors may be further improved, and the highlight lies in the opportunities brought by the market-oriented reform of electricity price, as well as the opportunities brought by the improvement of the new generation of power system.

In addition, under the background of common prosperity, how to realize the consumption upgrading and healthy consumption of the broad masses of people, we can pay attention to the opportunities of automobiles, especially new energy vehicles, textiles and clothing, food and beverages, business management and management in the era of national consumption.

In the middle and latter part of the fourth quarter, monetary policy is expected to remain neutral and loose, and structural credit can be expected.

1.3. Investment advice: be patient, don't follow the trend, beat the long and short, and grasp the logic of long-term growth.

Market outlook:After the rebound in October, the momentum of the sustained rebound of Hong Kong stocks in the fourth quarter is weak, and it is more likely that the "rebound-shock-adjustment-rebound" in the bottom area will be sawed repeatedly, and the fundamentals and policy gains still need to continue to gain momentum. At this stage, we should not pay attention to the index, but should pay attention to the structural market and look for stocks with long-term investment value.

Investment opportunities: a subdivision of gold panning fundamentals with reliable long-term logic and strong short-term performance data.

• Advanced manufacturing industry: it is expected that there will be policy backing and structural industrial policy stimulus around new growth points in the fourth quarter, and it is suggested that we should focus on the industrial chain related to new infrastructure.

1) New energy vehicle industry chain:Complete vehicles, spare parts.

2)In the "double carbon" era, the revolution of energy technology is in the ascendant and is optimistic for a long time.Clean energy, new power systems, power intelligence and informatization, and auxiliary industries around the new demand for reducing energy consumption in traditional industries, etc.。

3) related industry chain of Wisdom:The pace of investment and construction by operators will accelerate in the second half of 2021, and the opportunities for the Internet of things, industrial Internet and industrial Internet may exceed expectations in the next few years.

• Be able to adapt to the "consumption +" of the era of common prosperity, and the demand is worry-free.

1) overseas home appliances:Focus on the export of home appliance blue chip stocks in Europe and the United States, the current U. S. economic recovery, real estate sales continue to grow.

2) Food and beverage:Pay attention to the opportunities for performance improvement in three quarterly reports, layout medium-and long-term branding, high-end development trends, and select subdivision leaders that have the ability to raise prices.

3) Sports shoes and clothing:With the rise of the national tide, the expansion of domestic demand, and the superposition of accumulated technology research and development and sports resources marketing, a number of domestic brand enterprises of Hong Kong stocks occupy a more and more important position in the international market, with significant long-term value.

• The traditional Internet leader market will begin to shock and divide.

Valuations of related stocks were also repaired in October as the market expected marginal improvement in regulatory intensity. In the follow-up, with the gradual normalization of regulatory policies, the Internet will develop in the norms, and its valuation logic will be reconstructed. Before forming a new long-term logic convincing the market, the market of the Internet leader will fluctuate and divide repeatedly. Uncertainty is still high. Therefore, the long-short strategy of the industry based on the market center may be to participate in the optimization of the traditional Internet market.

Risk hints: global economic growth is declining; monetary policy in China and the United States is not as loose as expected; big country game risk.

II. November recommendation portfolio logic

China Resources Power Holdings:Traditional thermal power enterprises turn around, new energy drives future growth

Trinity International:Accelerated research and development and rapid development of new business

Yongda Motors:Deep order reserve + lock in the high price of new cars, Q4 performance may reach a new high

Nestor:Maintain the project target of putting into production for the whole year, and expand new customers smoothly.

Man Wah:Active expansion of functional sofa leaders

Techtronic Industries:Performance exceeds expectations, professional tools accelerate growth

Sunny Optical Technology:Grab the lens of big customers, accelerate the development of vehicle business.

China Mobile Limited:Profitability continues to improve, cloud business opens room for growth

China Mengniu Dairy:Leading breasts attempt to go south, long and short performance can be expected.

Sunac Services:The profit margin improved more than expected, and the extension ability increased rapidly.