Core conclusions: ① From the perspective of valuation and position, the crowdedness of most high-end manufacturing sectors is still not high, but there are structural differences in position data. ② From the perspective of excess returns, the trend of excess returns in the high-end manufacturing sector has obviously converged since the end of March. ④ The short-term market may be in the process of recuperation, and medium and high-end manufacturing with better fundamentals may become the main line in the medium term.
At present, most of the high-end manufacturing sectors are still not crowded. Since February, the performance of medium and high-end manufacturing sector has been relatively strong as a whole. The rise of this round of medium and high-end manufacturing may be due to the strong recovery of the fundamentals of related industries supported by export flexibility. With the continuous deduction of the manufacturing industry's outbound logic and the early strength of the high-end manufacturing sector, some people worry about the overcrowding of related sectors. From the perspective of industry valuation and transaction indicators, the industries with medium and high market attention in the manufacturing industry at present are automobile (the comprehensive indicator is 63%, the same below), national defense and military industry (54%); Most of the medium and high-end manufacturing industries are below the average level of attention, including household appliances (47%), mechanical equipment (47%), and electrical equipment (44%); However, the market attention of other manufacturing sectors has been in the cold regions since 2010, such as architectural decoration (38%), light industry manufacturing (22%), and textile clothing (15%). From the perspective of fund position, the current position level of power equipment (fund position level is 83%, the same below) and automobile (83%) in high-end manufacturing is at a historical high; However, the position level of military industry (74%) and household appliances (54%) is at a medium to high level; In addition, mechanical equipment (46%) is still at a medium low level.
Since the end of March, the trend of excess returns in the high-end manufacturing sector has obviously converged. The excess return is an intuitive indicator to measure the relative strength of the industry performance. We use the excess return rate of the industry index to measure the excess return trend of the manufacturing industry. We can find that the excess return trend of the high-end manufacturing industry has begun to weaken since the end of March this year. First of all, we calculate the change in excess earnings of various industries from 2/5. At present, the excess earnings of high-end manufacturing industries have fallen back. Specifically, the highest excess earnings of automobiles reached 12 percentage points at the end of April, but now it has fallen back to 5 percentage points; National defense and military industry dropped from 10 percentage points to 7 percentage points at present; Mechanical equipment dropped from 7% to 4%; Power equipment dropped from 8% to 3%; Different from other high-end manufacturing sectors, household appliances began to outperform the market at the end of March, and the excess return fell to 5% from the highest 11% in mid May. In addition, if we examine the relative strength of the industry performance from the rolling one month excess return, we find that the rolling one month excess return of the high-end manufacturing industry has begun to converge since the end of March. Automotive (the rolling one month excess return is up to 10 percentage points, currently - 2 percentage points), military (10 percentage points, - 4 percentage points) Machinery and equipment (8 percentage points, 3 percentage points) have dropped.
In the short term, the market may be surging, and in the medium term, focus on medium and high-end manufacturing with better fundamentals. The nature of the market rise since 2/5 is the first rebound at the bottom. Looking back at the first rebound of the last four market bottoms, the market tends to last about 2-3 months, with the index rising about 25% - 30%. The time and space of this round of market rise is close to history. Looking back, after all bear markets bottomed out, the first wave of rising prices ended, and the market often took profits. The reason behind this is that the fundamentals are not solid enough. From the current fundamentals, the current macroeconomic repair is not yet stable, and the follow-up trend of the market still needs to track the implementation of policies and whether macroeconomic data can accelerate recovery. After the market is closed, the main opportunity of the stock market is expected to emerge, focusing on medium and high-end manufacturing with better fundamentals. Medium and high-end manufacturing has both supply and demand side advantages: on the one hand, Made in China has incomparable advantages on the supply side, including complete industrial system, strong innovation ability and abundant talent capital; On the other hand, the development of domestic manufacturing in emerging countries will drive economic and income growth, and the demand for medium and high-end manufacturing will also increase accordingly, or become a new increase in China's advantageous manufacturing exports. At present, the performance growth of high-end manufacturing industry is significantly higher than the overall level, and its recovery is more robust.
Risk tip: the implementation progress of the stable growth policy was less than expected, and the domestic economic recovery was less than expected.
