On November 11, the Comprehensive Group of Joint Prevention and Control Mechanism of the State Council issued the Circular on further optimizing COVID-19 epidemic Prevention and Control measures scientifically and accurately to do a good job in Prevention and Control work ("20 articles"), announcing 20 measures to optimize prevention and control work.Among them, close contact disposal, close connection determination, risk area categoryAnd entering the country.Optimization and adjustment has been made in many aspects, such as related aspects.Minimize the impact of the epidemic on economic and social development。

On December 7, the Comprehensive team of the Joint Prevention and Control Mechanism of the State Council issued the Circular on further optimizing the implementation of COVID-19 epidemic Prevention and Control measures ("New Ten articles"). The notice includes 10 specific measures, which are further loosened on the basis of the "20". Among themRisk zone division, closure and control measures, nucleic acid and health code inspection, isolation methodsMake further optimization and adjustment, etc., and have a clear policy attitude.Epidemic prevention has entered a new stage.

The expectation of relaxing epidemic prevention has been fulfilled.We expect the economic recovery to begin to accelerate after the Spring Festival.Hong Kong stocksIt is expected that Hong Kong stocks will gradually usher in a double repair of valuation and performance from the second quarter of 2023.In the bond market, the "strong expectation" of fundamental repair may be gradually realized, and it may be difficult for short-term and long-term bond interest rates to get rid of the high volatility trend.We need to guard against the possibility of a change in the orientation of monetary policy next year.

As for the influence at the meso level, we start fromHealth care, consumption, manufacturing, carsAnd other industries / industries for analysis.Medical and Health:We believe that marginal changes in epidemic prevention and control policies will bring incremental opportunities for vaccines, COVID-19 drugs, household standing OTC, chain drugstores and consumer health care.Consumption:Pay attention to the trend of epidemic situation and suggest dynamic allocation of consumption.Car:23Q2-Q4 domestic car sales may exceed expectations.Manufacturing:Focus on the recovery of home appliances, forklifts and industrial robots.

COVID-19 epidemic prevention and control measures continue to loosen

On November 11, 2022, the Comprehensive Group of Joint Prevention and Control Mechanism of the State Council issued the Circular on further optimizing COVID-19 epidemic Prevention and Control measures scientifically and accurately to do a good job in Prevention and Control.Twenty measures for optimizing prevention and control work have been announced, including seven aspects of optimization and adjustment.On December 7, the Comprehensive Group of the Joint Prevention and Control Mechanism of the State Council issued the Circular on further optimizing and implementing measures for the Prevention and Control of the epidemic situation of COVID-19.The notice includes ten specific measures，Overall policy control has been further loosened on the basis of the "20 articles", and epidemic prevention has entered a new stage.

What is the impact on economic fundamentals and investment?

Hong Kong stock market: a comprehensive valuation repair market will be launched in 2023

Domestic epidemic prevention policies are expected to be continuously optimized, stable growth and stable real estate policies will continue to be introduced, and economic fundamentals are expected to continue to recover. The Federal Reserve is expected to end raising interest rates in the first half of 2023, against the backdrop of rising worries about economic recession. the expectation of a shift in monetary policy has also emerged, and Sino-US relations have also entered a phased period of moderation. We judge that in the future, foreign investment is expected to completely reverse the previous large outflow trend and continue to return to the Hong Kong stock market.Starting from the second quarter of 2023, Hong Kong stocks are expected to gradually usher in a double repair of valuation and performance.

Research and judgment on the general trend of Hong Kong stock market in 2023

What are the investment opportunities at the medium and micro level

Health Care: pay attention to incremental opportunities for Vaccines, COVID-19 drugs, Family standing OTC and Medical Services

At present, COVID-19 presents the development of fluidization and the future.COVID-19 vaccineDemand will be sustained, the winter will face the risk of influenza COVID-19 superimposed epidemic, the influenza sector is expected to recover. The Health Commission called for strengthening the vaccination of COVID-19 for the elderly, increasing the certainty of the demand gap.

ExpectedCOVID-19 small molecule oral medicine and COVID-19 related traditional Chinese medicineIt will be an important guarantee for COVID-19 prevention and control in the future, while the performance increment of the family standing OTC drug will be ushered in.

Recovery in demand for health care:The growth rate of passenger flow is expected to recover under the relaxation of prevention and control policies, and we expect the growth and profitability of the chain drugstore industry to continue to strengthen since 2022Q4; in terms of optional attributes of consumer health care (such as assisted reproduction, dentistry, ophthalmology, traditional Chinese medicine, medical beauty, etc.), we expect terminal consultation volume and consumer demand in relevant sectors to recover, and performance elasticity is expected.

At the same time consideringGradual optimization of prevention and control measuresOverseas navigation is expected to resume gradually in the future.We expect that companies with operations in the United States, Laos and other places may benefit. In addition, it is expected that the optimization of domestic COVID-19 epidemic prevention and control measures will facilitate the entry of FDA personnel to carry out on-site verification work, and the success of domestic PD-1 to sea is imminent.

Investment opportunities in the health care industry

Consumer industry: pay attention to the trend of epidemic situation and dynamically allocate consumption

We expect the impact and impact of the epidemic on domestic consumption to remain in 2023, especially in the first half of the year. The overall performance of consumption in 2023 will still be mainly driven by the rhythm of epidemic control policies and the adjustment of relevant policies that affect the economy, such as real estate policies. The logic of dilemma reversal is still the main logic. It is suggested that attention should be paid to the trend of the epidemic and dynamic allocation.Top-down focus on the allocation of three main opportunities: first,Continue to configure the travel chain plate with the most obvious elasticity of post-epidemic repair.Second,Dynamically increase the configuration of prosperous representative strong energy tracks such as liquor, consumer Internet, sports, etc.Third,Pay attention to food security, real estate industry chain recovery under the theme of seed industry, home and other related plate phased opportunities. In addition,The opportunities of individual stocks with better development cycle, relatively good bearing under the epidemic situation and strong ability to cash in performance can be selected from the bottom up.Mainly concentrated in supply chain production enterprises, snack food enterprises and so on.

Investment opportunities in the consumer industry:

1. Travel industry chain:The recovery of the travel chain is still one of the very clear allocation lines in the consumer industry. At present, we believe that the alpha discrimination of clear recovery pace and performance flexibility is more critical, so it is particularly important for overseas recovery path review and domestic travel company elasticity calculation. With reference to overseas markets, the opening up of initial leisure demand promotes passenger flow and price-led recovery, while companies that strengthen their operating advantages during the epidemic will be given an additional market capitalization premium. From the performance sensitivity test, under the assumption that the optimistic scenario in 2023 is relatively neutral.We judge the performance elasticity of domestic travel sector OTA > catering > hotel > scenery.区。

In terms of airportsThe landing of the previous policy led to a rapid rebound in flight volume, and we expect the suppressed demand for family visits to be released during the Spring Festival travel season in 2023.Aviation demand may return to about 80% of the same period in 2019.The press conference of the Joint Prevention and Control Mechanism of the State Council on December 7 said that the management measures of immigration personnel will be further optimized and improved, with reference to the evolution of the immigration policy of Hong Kong, China, and in view of the substantial relaxation of domestic epidemic prevention measures, we look forward to the further optimization of the mainland's immigration policy.We expect that by the end of March 2023, the number of international flights will return to 20% in 2019 and continue to expand throughout the year, which is expected to resonate with the repair of domestic demand.The fundamentals of the airport in 2023 are expected to gradually turn to the right, and the demand for Spring Festival transportation will resume & the immigration policy will be loosened again or it may be an important observation indicator in the short term. It is strongly recommended to pay attention to the tension of the aviation cycle and the return of the duty-free value of the hub airport.

2. Alcohol: the liquor is expected to improve, and the beer upgrade is gradually realized.In the context of the relaxation of the epidemic, consumption repair is expected to open, and the catering scene dominated by local flow is expected to be repaired as soon as possible, both liquor and beer will be driven to a certain extent.① spirit:The focus is gradually focused from the policy game to the Spring Festival transfer, mobile sales, the impact of the release of the epidemic on normal production and life, changes in channel inventory, and so on. It is generally judged that the impact during the peak period of the epidemic is controllable, and it is recommended to maintain the configuration and adjust dynamically, focusing on the two main lines of investment.② Beer:It is judged that the industry is still in the high-end cash stage in 2023, and the high-end sales in the industry are expected to maintain double-digit growth. We judge that the prosperity of the beer industry is high before and after low, 2023H1 is expected to outperform the sector index, 2023H2 needs to observe cost fluctuations.

3. New retail: the policy and performance are at the bottom, and the return of value can be expected.The restoration of prosperity under the stimulation of marginal relaxation of control and related policies such as real estate and consumption may become an important variable for the continuous upward trend of the sector market from half a year to one year, and the long-term improvement on the profit side brought about by reducing costs and efficiency during the year will be likely to continue. The overall scale of the e-commerce industry has entered a period of steady growth, the income growth rate and profitability of each player are expected to be significantly differentiated, and pay attention to the head companies with stable core categories / scenarios, certain structural increments and clear profit improvement paths. The epidemic in the local life industry during the year led to serious damage to the business activities and cash flow of small and medium-sized businesses in the service industry. at the same time, Douyin entered the bureau strongly, forming differentiated competition in the minds and product forms of users.

4. Sports shoes and clothing: the rise of China and the outbreak of subdivision.Epidemic control tends to optimize has been relatively clear, the sports industry is expected to continue to usher in marginal improvement and recovery, with the rise of the national brand and overseas brand competition pressure relief, market share is expected to continue to transfer to the head of the national brand; shoes and clothing as an optional consumption flexibility is higher, the rebound is greater.

5. Food: the short-term pressure still exists, the long-term dawn has emerged, and the machine layout at the bottom.It is suggested that the layout of three main lines: ① demand recovery, cost improvement, business and performance with obvious flexibility of the company. ② has the ability to grow companies; ③ valuation has a very safe marginal segment of the industry leader.

6. Beauty makeup: the growth rate slows down, and the consumption rigidity of skin care products is stronger than that of color makeup.Looking forward to 2023, we will prefer high-quality brand leaders with good texture, strong comprehensive ability of product power / marketing power / channel power, and greater elasticity of recovery after the epidemic; secondly, we will focus on recommending the upstream benefit targets of the industrial chain with the increased importance of R & D / raw material end and accumulation of certain resources; thirdly, we recommend enterprises that benefit from downstream demand pull and their own business optimization when the industrial chain recovers, and pay attention to ODM/OEM producers.

7. Seed industry and biological breeding:Food security has once again been stressed by the national high level that the seed industry has ushered in a period of strong policy support, the "three-phase superposition" has driven the industry to accelerate its evolution, and the industrialization of biological breeding is about to kick off.

8. Home: shock is still the main theme, pay close attention to the change of demand.The current epidemic situation makes it difficult to replenish the front-end latent pool in the short term, and the pressure on the 23H1 plate is expected to remain. The short-term bargain-hunting layout will be restless in the spring next year, while closely tracking the inflection point signal of demand. In the medium and long term, we are optimistic about the development of household brands with comprehensive channel management and control capabilities and strong product power.

Manufacturing industry: focus on the recovery of home appliances, forklifts and industrial robots

1. Home Appliances: ① White: profit repair is expected, pay attention to the left layout opportunities.With the easing of the pressure on the stabilization of raw material prices, the intensive release of positive signals from real estate policies, and the steady progress of epidemic control, White Power is expected to usher in valuation repair.② Kitchen electricity: focus on specialization, cost performance and the growth of new categories.In the future, if the impact of the epidemic gradually fades, superimposed "Baojiao Building" policy effect of transmission, dishwasher, integrated stove sales may have restorative growth.③ massage apparatus:Epidemic prevention and control policies have been adjusted, consumption is expected to accelerate the recovery, the recovery of the travel chain is good for massage equipment.

2. Machinery: ① forklift: the bottom of domestic demand is expected to recover soon.With the further optimization of the domestic epidemic policy and the recovery of production, the demand for forklifts is expected to gradually recover and enter the upward phase from the fourth quarter of 2022.② industrial robot: the trend of replacement continues, and the turning point in the industry is coming.We believe that the epidemic has given a market education to domestic manufacturing enterprises and stimulated the demand for machine replacement in manufacturing enterprises.

Investment opportunities in the manufacturing industry:

Car: 23Q2-Q4 domestic car sales may exceed expectations

We expect that with the more accurate and liberalized epidemic prevention policy, the sales volume of China's automobile industry may be more similar to that of Vietnam, Malaysia, Indonesia and other places after the liberalization of epidemic prevention policy, showing a trend of recovery. Comprehensive judgment23Q1 domestic car sales will be under pressure, 2023Q2-Q4 domestic car sales may exceed expectations.It is recommended to pay attention to the following three types of investment opportunities: 1) vehicle companies whose scale effects of electric vehicle races are emerging rapidly, especially those with layout in DHT/ hybrid circuit; 2) parts suppliers with strong certainty of intelligent demand, especially the core suppliers of Tesla, Inc. and Wei Xiaoli; and 3) parts companies with global substitution capability in the context of European energy crisis.

Investment opportunities in the automotive sector

A list of investment opportunities in related industries / sectors

Risk factors.

Macroeconomic stimulus policies are not as expected; domestic policy promotion and economic recovery are not as expected; economic and household income levels are lower than expected; local epidemics have repeatedly exceeded expectations; risks of tightening domestic epidemic prevention policies, and so on.