Source: Citic Securities Research Author: Jiang Ya, Yang Qingpu, Xu Yingbo, Liao Yuan, Dan Zhuling Dubbed 618 grand promotion in 2024 has come to an end, and Citic Securities expects that the e-commerce large cap GMV during this period is expected to achieve low double-digit growth (+12% or so), continuing the positive trend since the beginning of the year and May. Structurally, it is judged that the growth center of content e-commerce platforms has moved downward, and the growth rate of shelf e-commerce platforms has rebounded under active investment. Platform-wise, Citic Securities judges that the core platform GMV growth rate during 618 is ranked as follows: TikTok > PDD Holdings > Tmall > JD.com.
"Lighten up and move forward" is the core idea of the new round of policies.
Since the end of September, a series of policy combinations have clarified the turning point of policies, with strong intensity, open-minded thinking, and a resolute attitude, aiming to effectively respond to various risks, promote economic growth and structural optimization, and reverse the society's pessimistic expectations. We believe that the policy mindset can be summed up as "lighten up and go back to battle." Firstly, break the negative debt-price cycle, avoid further risk expansion, in order to achieve a "lightweight" state, which is the short-term goal of the current government policy. Secondly, implement stronger macro-control policies, with the central government increasing leverage and guiding other economic sectors to maintain stable leverage levels based on expected improvements. This is expected to become the main direction of the new round of incremental policies in 2025. Finally, based on the long-term reform blueprint of the Third Plenary Session of the Twentieth Party Central Committee, taking the opportunity of the upcoming formulation and implementation of the "15th Five-Year Plan," it will promote structural reforms on the basis of stable economic recovery, achieve high-quality development, which will be the policy focus in the second half of 2025.
Specifically, how to measure whether the policy scale is sufficient cannot be simply calculated backwards based on the amount. What's more important is to observe the leveraged effect and cyclical improvement of the whole society, especially whether it can achieve a positive and stable price level.
Some investors believe that we should refer to the intensity of the 4 trillion-stimulus plan in 2008, where the new fiscal expansion should account for about 10% of GDP (13 trillion), in order to measure the effects and expectations. However, after 2008, China's fiscal tools have become increasingly abundant. In addition to fiscal tools within the budget, policy banks and local government financing platforms have become important components. Therefore, we should consider the impact of multiple fiscal tools under a broad fiscal definition on the macro economy. More importantly, the extremely strong expectation turning effect of the 4 trillion plan at that time is worth learning from. We believe that in 2025, while the central government leverages up, with the basic end of suppressing fund idling, marginal improvement in debt-to-equity swaps, gradual stabilization of the real estate market leading to the restoration of resident wealth effects, and the easing of overcapacity in the manufacturing industry, it will promote the stabilization of leverage by local governments, residents, and enterprises, and even an improvement in the willingness to leverage, all working in the same direction, thus achieving economic stabilization.
Policy expectations will remain resilient, and the time window for macroeconomic narratives that cannot be observed or verified will last at least until March next year, with the current policy cycle expected to last more than 18 months. During this period, ample market liquidity will effectively support the index's upward volatility. Attention should be paid to changes in market liquidity and improvements in economic indicators, and during the one-month short-term policy vacuum, patience and resilience should be maintained, waiting for the new round of policy directives.
Firstly, from now until December, it belongs to the period of policy verification and observation of macroeconomic data before the major conference. On the one hand, most of the policies mentioned at the September 26th Politburo meeting have been implemented, and possible further policy implementations include the continuous promotion of debt-to-equity swaps, further relaxation in the real estate sector, and the possible details of specific bond and land reserve policies, and monetary policy cuts of 25bps-50bps. However, most of these are already within market expectations. On the other hand, close attention should be paid to economic conditions in the fourth quarter, especially whether core city housing prices can continue to stabilize, as well as the continuous rebound of social retail sales growth and PMI; due to the continued overcapacity situation, it may take some time for factors such as PPI and other prices to turn positive.
Secondly, after the Central Economic Work Conference sets next year's economic arrangements, from late December to early March of the following year, it usually belongs to a domestic period of macroeconomic data and policy vacuum. On the one hand, we expect that the policy direction of the Central Economic Work Conference will not fall short of expectations. A strong fiscal expansion statement and more tilted support for people's livelihood consumption will further boost market confidence. This will be the strongest voice of this policy round. On the other hand, from late December to early March of the following year, both domestic macroeconomic data and policies will be in a vacuum period. The focus of policies worth paying attention to during this period is the policy commitments made in Trump's inauguration speech, and a series of policies may be intensively implemented in the form of presidential executive orders. By then, the international relations situation will become increasingly clear.
Finally, considering that the policy narrative cannot be observed and verified until at least March next year, we expect the index to maintain a volatile upward trend supported by ample market liquidity. The main focus is expected to remain on high-quality large-cap blue-chip stocks with resilient performance, ample cash flow, and high dividend payout ratios; given the more effective market feedback mechanism and greater dividend buyback intensity, quality blue-chip stocks in the Hong Kong stock market may be more favored. Currently, the daily average trading volume of A shares is still above trillions but has declined slightly, with active funds potentially rotating from sectors with larger fluctuations and significant ETF inflows such as the STAR Market and the GEM to sectors with smaller volatility but safer valuation such as beginning with middle letter, quality, dividends, and large-cap sectors. In addition, in the new round of capital market reform cycle, it is recommended to continue to focus on increasing high-quality assets led by industrial capital.MergerOpportunity in restructuring - this is not only a clear direction supported by policies, but also an opportunity to enhance the quality of assets through high-level industrial integration.
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