Gem: Profitability Will Dominate The Growth Trend

< p > 2013, the trend of A share market was mainly manifested as differentiation, concentrated on the small and medium-sized board market represented by CSI 500, and the gem of the gem, which was an important emerging industry gathering environmental protection industry, information and communication, and so on.

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< p > contrast the PE of Shanghai and Shenzhen 300 and the growth enterprise board, and take the early 2013 as the watershed, which showed a very different style trend. Before 2013, although the absolute value of the two plates had always been different due to the different growth spaces of growth stocks and value stocks, the difference remained basically stable. The difference was roughly 20 times, indicating that the two trends were basically the same.

But after 2013, the scissors difference between gem and CSI 300 continued to expand, the biggest difference was nearly 30 times.

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< p > from the historical trend of < a href= "http://www.91se91.com/news/list.aspx Classid=101112107" > enterprise earnings < /a >, the main business income of industrial enterprises in 2013 dropped to a higher level than the historical average level. The main business income of industrial enterprises in the three quarter of 2013 increased by only 11%.

The total profit grew by 13.5% year-on-year, also at a historical low point, which concentrated on the current high cost of corporate financing, but the continued downturn in profit levels and income levels resulting from weak demand in the context of capacity.

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< p > liquidity is a topic that can never be discussed at any time when the stock market is closed. This is even more so.

Recently, the pressure on the A share market at the end of the year has basically exceeded the expectations of most investors.

The Federal Reserve reduced the size of QE, slowed the inflow of hot money, and continued to suspend reverse repurchase. The pressure of settlement at the end of the year was intertwined with many factors. The short-term liquidity was unprecedented tense, capital prices soared, and the A share market continued to bear pressure.

Not only the heavyweight stocks have fallen sharply, but also the previous hot spots have dropped significantly. The new hot spots can not be compared with the previous stage, and the market is in a shortage of funds.

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< p > we think that the main keynote of monetary policy in 2014 is neutral. In the past year, the center of capital prices has been significantly uplifted. The lack of incremental funds will continue to perplex the performance of the A share market, even if there is a demand for valuation repair in the blue chip sector.

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< p > government led economy, while local a href= "http://www.91se91.com/news/list.aspx Classid=101112108" > financing platform < /a > and the real estate industry are extremely insensitive to financing costs. Its high cost absorbing funds, occupying large amounts of capital and raising the price of capital, leads to inefficient departments and industries with low capital flow, making social financing separate from the development of real economy and forming a structural black hole of capital.

From the present point of view, the government has basically realized the risks of local financing platforms, and has publicly reminded for the first time that the regulation of the real estate industry has never relaxed, and that the future capital level has also realized the market configuration, and the structural black hole will gradually disappear.

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< p > since the beginning of the year, the profitability of the gem has steadily increased. However, the upward trend of the market index is more driven by market sentiment. As the three quarterly report shows that the profitability of the gem is not as good as expected, it shows a double kill state with the downward trend of profitability and the downward trend of the market sentiment. If the earnings of the next GEM companies are not as good as expected, then the downward trend of the pessimism and the downside of earnings will lead to the accelerated decline of the market, so the profitability of the gem will become the main factor leading to the price trend.

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< p > the progress and intensity of the reform basically exceeded the market expectations.

After reviewing the policies promulgated in various fields after the third Plenary Session of the 18th CPC Central Committee, IPO reform, interbank deposit certificate business will pave the way for interest rate marketization, expand the fluctuation range of RMB exchange rate, promote the marketization of interest rates, clarify the planning and layout of new urbanization gradually, ecological agriculture, land pfer and food security will be further clarified at the policy level.

On the whole, the current government is far ahead of market expectations in the process of reform.

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< p > combined with the above analysis, we believe that the future liquidity and corporate earnings will still be bothering the A share market in the short term. Although the SFC has also repeatedly stated that it will encourage long-term pension funds such as corporate annuity to enter the market, the central bank has repeatedly stated that it will make more adjustments to liquidity through SLO instead of reverse repurchase in the future, but all of these must be implemented in the way of incremental capital to achieve real results. Otherwise, in such a pessimistic market sentiment, it is difficult to achieve better results.

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< p > < < a href= > http://www.91se91.com/news/list.aspx > Classid=101112102 > > gem > /a > performance is also a more important aspect. In terms of current valuation level, high valuation and overdraft of future earnings are basically consistent with the facts. In the future, gem should be more risk averse than earnings.

Therefore, in the first half of 2014, it is difficult for us to see a decent market. In the best case, it is only a narrow and volatile market.

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< p > with the local financing platform and the real estate industry entering a substantial improvement stage, with the elimination of the black hole of capital structure, the problem of tight funds will be fundamentally improved. At this point, it is possible that the A share market will really be driven by an incremental capital market.

This process will be gradually realized in the second half of 2014.

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< p > considering that the intensity of the reform has exceeded the expectations of the market, we have every reason to believe that there are more ideal investment hotspots in the focus of reform.

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< p >, therefore, the choice of investment themes is centered on the marketization, rebalance and new impetus brought about by the reform. It benefits from the market reform of cultural media, health care, electricity, energy, pportation, agriculture and forestry, and so on. From the rebalancing plate, there are investment opportunities for new industries that are brought about by 4G network and informatization. The new power should pay attention to the relevant sectors such as mobile Internet, biotechnology and so on. At the same time, we should pay attention to the valuation repair market of weight plates.

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