Is There Any Drama In The Second Half Of The Year? Under The Normalization Of Epidemic Prevention And Control, Fund Managers Still Rush To Raise Funds.

Under the structural market boost, the pharmaceutical and consumer sectors have seen a big increase this year.

In June 17th, A shares remained stable, the Shanghai Composite Index closed up 0.14%, Shenzhen stock index, SME board index and gem index rose 0.19%, 0.53% and 0.15% respectively. But subdivision, the pharmaceutical sector led the whole market.

According to the level of the industry, the pharmaceutical and biological industry ranks first in the 28 industries in June 17th, reaching 2.38%. This year, the medical and biological industry has increased by 35.72%.

Similar to the performance of the pharmaceutical sector, the consumer sector has also seen a small increase this year. According to Wind data, this year, the food and beverage industry is following the rise of medical organisms.

"Recently, pharmaceutical stocks have gone up a lot, and many pharmaceutical stocks are indeed very high valuations. The current situation reflects investors' concern about the downward pressure on the economy under the influence of the epidemic, which has led investors to seek long-term assets with certainty and rigidity. The driving force behind this situation is that the epidemic rate will not end in the short term, so the high value of medical stocks is likely to continue. In June 17th, Ge Chen, manager of the mixed medical fund, told the business reporter in twenty-first Century.

Reasons leading to medicine and consumption

According to June 17th data, more pharmaceutical stocks were trading on the same day and a new share price was set. The pharmaceutical stocks on the market include Hua Lan, North China Pharmaceutical and many other stocks. Among them, Hua Lan has increased by 78.82% this year and its market value has reached 87 billion 500 million yuan.

The June 17th tiger list data show that funds are still highly favored for this new stock. On the same day, Hua Lan bought 61 million 307 thousand and 900 of its net purchases, of which two of the five sales offices still had two seats and the total purchase amount was 11 million 880 thousand.

"For some epidemic prevention and control related companies, the impact of the epidemic on their operation is not negative. Some enterprises have not only increased their profits significantly, but also the competition pattern has overtaken the curve because of the epidemic. For such companies, the normalization of epidemic prevention and control brings a golden opportunity for development. The rising share price reflects the sublimation of the value of the company. Ge Chen thinks.

In its view, "no matter how the epidemic is repeated, normalization of prevention and control is a relatively definite event in the future for a long time. In this context, we will continue to dig deep into those companies that can get incremental markets in normal prevention and control. "

Similarly, the consumer sector, which is also the biggest gainers, has also stepped out of the hot market this year.

According to Wind data, the food and beverage industry rose by 8.66% in April, and 9.07% in May. In addition, there are sub sectors such as leisure service and commercial trade, which also have taken the top of the A share market this year.

Research data show that, from the historical division of PE, the PE valuation of leisure services, medicine, food and health care is more than 90% of the historical range since 2010, and household appliances are above 70%. Compared with the total consumption PE, the valuation is not low. Judging from the historical division of PB, food and health care has nearly 90% of the historical area since 2010, while leisure services and medicine are located near 40%, and home appliances are among the top 50%.

"Horizontal comparison, many leading stocks in the current consumption sector, not only the absolute value of the stock price has reached a record high, but also in the historical high level, especially in the food, beverage and pharmaceutical sectors. Vertical comparison, benchmarking international, from the perspective of PE-PB, the valuation of A share consumption leading enterprises is higher than that of the mature markets in Europe and America, but considering the growth of A share enterprises, it is still in a more reasonable interval. Sun Qi, deputy general manager of the research department of Founder Fubon fund, was interviewed.

"Even under the influence of the new crown pneumonia epidemic, the net profit of A share leading enterprises can still be expected to grow by more than 15%, while overseas enterprises are experiencing different degrees of negative growth. In addition, the leading companies of A shares are generally less affected by the new crown pneumonia epidemic, and even some sectors, such as medical devices, are benefiting. It can be seen that under the new crown pneumonia epidemic, the current A share consumer stocks have a higher profitability. " Sun Qi thinks.

Allocation changes under high valuation

However, the high valuation of consumption and medicine sector also brings about the market's concern for the risks behind.

"Overall, the performance of some consumer targets is strong, and the valuation level is higher than the historical 90% points. However, some undervalued and strong cyclical valuations are approaching the lowest level in history. In the context of long-term low interest rates and low growth rates being accepted by more and more investors, enterprises with some basic masks with comparative advantages are expected to enjoy higher valuations in the long run, but they need to be vigilant against some individuals or industries who have been wrongly given too high valuations, and the underlying logic has been falsely reduced to a low valuation range. A securities business department public fund investment director said.

Li Yu, chief investment officer of Gao Teng international equity, said: "if we compare the valuation with other sectors from the historical point of view, the valuation of the pharmaceutical sector is more expensive. But now is a hundred year old epidemic, which is understandable, because no one knows how long the epidemic will last.

"At present, we can consider pharmaceutical stocks from two perspectives. The first case is, assuming that the first outbreak of the epidemic is the first wave in spring and the second wave is small in September, there is basically no widespread outbreak in the near future. However, if a good vaccine is not studied in a short period of time as individual experts worry, the epidemic will turn into an epidemic like influenza. If there is still a few years to go, there may be room for medical shares. At present, it is difficult to ascertain the future changes of the epidemic situation, and the probability of the first judgement is even greater. " Li Yu said.

For the valuation of consumer stocks, sun Qi believes that "from the perspective of growth space, the overvalued value of A share consumer stocks is actually a growth consideration for Chinese enterprises. From the perspective of market style, determining premium is the main logic of this year's global market. From a longer time perspective, the nature of valuation is a long-term expectation of the industrial outlook."

Therefore, although consumer stocks have accumulated small gains and higher valuations, this valuation is still in a reasonable range and can be gradually digested by long-term excellent growth. Especially in the medium and short-term background of the current global economic uncertainty and the medium and long term backdrop of China's economic transformation, the higher valuation of consumer stocks will become the norm, if selected tracks and companies are excellent. Consumer stocks still have huge market growth potential. " Sun Qi said.

With the end of June, the second half is near. Will the A share market maintain its pattern since the first half?

"The epidemic will not end in the near future, so in investment, we still pay more attention to those companies that have been verified in the epidemic, the long-term competitiveness has been optimized, and there are incremental demand and long-term growth." Ge Chen said.

Li Yu pointed out that "for the second half of the year is optimistic, but we need to pay attention to two short-term risk points. First, how China US relations will change; the two is the second wave of the epidemic and whether there will be any vaccine in the coming year. If there is a vaccine, it will be good for the overall market, but it will have an impact on the market structure. For example, now the hot line down the line, including online office, game benefits, as well as pharmaceutical stocks, but if effective vaccines appear, these stocks may lead from the leading market to a backward market. And cyclical stocks, such as tourism and aviation, which have been badly pressed before, are likely to rise.

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