China Merchants Securities: What does the “transaction” o

Investment Strategy Research Zhang Xia Team

In December 2018, the central bank's total asset size showed non-seasonal expansion, mainly from the expansion of “debt to other depository companies” and “other assets”. If the current expansion of the central bank continues, it may cause a significant recovery in the price of certain types of financial assets. The recent transfer of targeted convertible bonds and the rapid advancement of the science and technology board indicate that the government actively guides liquidity to invest in equity assets, and the central bank's expansion may bring equity assets to appreciate.

Core Views

[Strategic Perspective] In December 2018, the central bank’s balance sheet showed non-seasonal expansion, mainly due to the increase in “debt to other depository companies” and “other assets”. . The total assets of the central bank increased by 1.34 trillion in December. On the one hand, in December, the central bank drove liquidity through MFL, PSL, and open market operations, and increased the debt of other deposit companies by 740 billion yuan. On the other hand, other assets increased by 580 billion, the highest in a single month since 2002.

[Strategic point of view] The composition of other assets of the central bank is less disclosed. Because of the use of central bank funds, any form of borrowing will be reflected in other deposit-taking companies, governments, other financial institutions, and non-financial sectors. The creditor's rights; if it exists in the form of gold or foreign exchange reserves, it will also be reflected in the corresponding subjects, and it is reasonable to speculate that other assets can only be equity or non-gold commodities.

[Strategic point of view] Historically, the central bank’s behavioral changes have hidden mystery. After 2012, the central bank’s balance sheet showed three rounds of changes: in August 2012, foreign exchange reserves expanded significantly, and central bank assets increased significantly. As a result, the growth rate of social welfare has improved significantly. The stock market has rebounded from the end of 2012 to the beginning of 2013. This round of central bank expansion has brought about a rapid rise in real estate prices. In August 2014, the central bank actively expanded its list through a series of financial instruments, but the growth rate of social welfare did not rise significantly. Liquidity did not flow into real estate and infrastructure, but entered the stock market and bond market through financial innovation, bringing stocks and debts. In January 2016, the central bank's credit growth rate of other deposit-taking companies soared again, the growth rate of social welfare rose sharply, the demand for real estate and infrastructure financing recovered, the prices of bulk commodities and house prices rose sharply, and the performance of stocks and bonds was relatively average.

[Strategic point of view] Recently the central bank set up CBS provides liquidity support for bank perpetual bonds, which aims to diversify channels for communication and will bring central bank expansion. CBS is a “voucher-for-voucher” operation. The interest rate of perpetual bonds is still owned by the bank. This means that the bank’s holding of perpetual bonds cannot be shown. The process of purchasing perpetual bonds and replacement will bring banks and central bank assets. The expansion of the size of the balance sheet.

[Strategic point of view] If the current expansion of the central bank continues, it may cause a significant recovery in the price of certain types of financial assets. If the property policy and infrastructure are greatly relaxed, the probability of rising prices and bulk continues to rise. If the “other assets” belong to the equity category and the government directs liquidity to equity assets, the price of equity assets is expected to appreciate. Judging from the current policy of targeting convertible bonds and the rapid advancement of science and technology boards, the probability of the latter may be greater.

[Strategic point of view] The promotion of the science and technology board will bring about the restructuring of related industries, and there is no need to worry about market diversion. For Science and Technology Board, the overall PE may be higher and the PER is at the same level as similar companies overseas; the valuation system of the stock A-share emerging industry listed companies will be closer to the company, and will continue to estimate for several years. In the context of the downside, the end result is likely to be that the stock A-share valuation will also be boosted.

[Strategic point of view] Integrating the central bank's asset “transaction” and actively diversifying the communication, we believe that it is necessary to pay close attention to the credit mechanism. If the growth rate of the social welfare is warming up, the central bank will actively expand the table and follow the credit. Expansion, infrastructure and real estate may pick up. If the social stability is stable, liquidity may be consciously led into the bond and capital markets, then the partial growth style may benefit more from the capital market policy dividends and the science and technology board, "TMT + military" may be dominant.

Risk Warning: Policy support is less than expected, and downward pressure on the economy has increased.

01

Strategic Viewpoint – What does the “transaction” of the central bank mean for A-shares?

1. The central bank’s behavior “transaction” – non-seasonal expansion in the balance sheet in December

In the central bank’s balance sheet announced on January 16, we observed that the central bank in December There has been a significant expansion in the size of the total assets. The total assets increased by 1.34 trillion yuan, an increase of 3.7% from the previous month.Long rebound to 2.6%. The growth rate of 3.7% increase from the previous month was the highest since January 2016. The central bank's balance sheet changes have a certain seasonality. In January, due to the increased demand for funds in the Spring Festival, it will increase its efforts, and in February, liquidity will be recovered. Therefore, the growth rate in January is generally higher, and it will fall back in February.

In December this year, the central bank's total asset growth rate was the highest in the past 10 years. According to the asset class split, the central bank put in 740 billion liquidity through the MFL, PSL, and open market operations in December, so the central bank's claims on other deposit-taking companies are now 740 billion. Since January, the central bank has continued to provide liquidity through open market operations. As of January 25, open market operations in January provided 530 billion liquidity. At the same time, the central bank began its first TMLF operation, placing 257.5 billion liquidity. Taking into account the two implementations of the RRR cut in January, following the significant liquidity in December, the liquidity continued to be significantly increased in January 2019.

Another type of “transaction” of the central bank's asset assets is “other assets”. The category of other assets is more mysterious, and the central bank less discloses its composition. One change that could reasonably be speculated with public information was the sharp increase in other assets in 2003 and the sharp decline in 2007.

In December 2003, the Central Bank used US$45 billion in foreign exchange reserves to inject Bank of China (601988, Diagnostics) and China Construction Bank, which was reflected in the monetary authority’s balance sheet as “foreign exchange assets” under the asset project. The decrease and the increase in "other assets".

In September 2007, the Ministry of Finance issued special government bonds, purchased the entire share capital of Central Huijin from the People's Bank of China, and injected it into China Investment Corporation as part of the investment of China Investment Corporation. The transaction was completed in December 2007. The “other assets” under the balance sheet assets of the People’s Bank of China fell sharply from 197.9 billion yuan in November to 709.8 billion yuan in December, a decrease of 488.1 billion yuan. The current exchange rate is about $67 billion. If from the perspective of the central bank, this operation will increase foreign exchange by nearly 23 billion. Complete a perfect low suction and high throw.

Since then, the central bank “other assets” have been difficult to track with obvious signs. It continued to increase in 2014-2016 and continued to decrease substantially in 2016. From 2017It began to increase substantially, and stopped increasing by the end of 2017. In the month of 2018, the project increased significantly. There was a change in the stock market crash in June 2015, and the central bank’s “other assets” increased by 270 billion.

If the use of funds by the central bank is in the form of any loan, it should be reflected in “claims against other depository companies”, “claims against non-financial companies”, “on government claims” and “claims against other financial companies”. If it is gold or foreign reserves will be reflected in the corresponding subjects. Other assets, reasonably speculated can only be equity assets or non-gold commodities.

In December 2018, other central bank assets increased by 580 billion, the highest since 2002.

At present, whether the credit system of the financial system is smooth has been discussed by the market, and some discussions on the behavior of central bank assets have also appeared. From the current behavior of the central bank, in addition to the regular liquidity through open market operations, MLF/TMLF, PSL, etc., other assets seem to contain some other significance.

On January 24th, the central bank issued an announcement to create a central bank exchange tool (CBS). The primary market traders of the open market business can use the perpetual bonds issued by qualified banks to exchange central bank bills. At the same time, the bank's perpetual bonds with a subject rating of at least AA are included in the scope of qualified collateral for MLF, TMLF, SLF and refinancing. The announcement emphasizes that CBS is an operation of “vouching for coupons” and does not involve the handling of the base currency. The interest rate of perpetual bonds is still owned by the bank. This means that the bank's holding of perpetual bonds cannot be shown, and the process of purchasing perpetual bonds and replacements will lead to the expansion of the size of the bank and the central bank's balance sheet.

2. The potential impact of central bank behavior changes on A shares

The change in central bank behavior often contains some mystery. Before 2011, the central bank's asset expansion was basically accompanied by an increase in foreign exchange reserves, which can be understood as a currency with a “dollar” as its underlying asset. Since 2011, the inflow of foreign exchange reserves has slowed significantly. Since then, the central bank’s balance sheet has seen three rounds of “transactions”.

The first round: August 2012-December 2013

In August 2012, the last round of foreign exchange reserves increased significantly, accompanied by the increase in foreign exchange reserves, the central bankThe growth rate of total assets increased significantly. In August 2012, the growth rate of social welfare improved significantly.

There was a small rebound in the economy from the second half of 2012 to 2013. The stock market had a significant rebound from December 2012 to February 2013, and the current round of central bank expansion, more Reflected in the price of real estate, the price of real estate in first-tier cities has risen rapidly.

The second round: August 2014-June 2015

After August 2014, the foreign exchange reserves dropped significantly. The central bank created a series of financial instruments such as PSL, MLF, etc. Financial institutions actively injected liquidity, and the central bank’s sudden increase in the growth rate of claims of other deposit-taking companies opened up the mechanism for the central bank’s active currency creation. In August 2014, after the central bank actively expanded, the growth rate of social welfare did not rise significantly. The liquidity created by the central bank did not flow into real estate and infrastructure. Instead, financial institutions introduced liquidity into the stock and bond markets through financial innovation, resulting in double-cheats from August 2014 to June 2015.

The third round: January 2016-December 2016

In January 2016, the central bank increased the credit growth rate of other deposit-taking companies again. At this time, the growth rate of social welfare began. A sharp rebound, real estate and infrastructure financing demand picked up, commodity prices and house prices rose sharply, and the stock and bond markets performed relatively well.

In December 2018, we once again saw a small increase in the growth rate of the central bank's claims on other deposit-taking companies. At the same time, we saw another change in the “other assets”, and the central bank’s total asset size was again evident. Rebound.

In addition, the central bank created CBS and actively cleared the channels for wide credit expansion. The creation of CBS is intended to encourage institutions to actively allocate perpetual bonds, improve the liquidity of perpetual bonds, and improve liquidity. More banks will issue perpetual bonds, which in turn will supplement capital and improve credit expansion. After the new regulations, the off-balance sheet business of the bank shrank sharply. The mechanism for credit expansion through off-balance sheet business was blocked, and the off-balance sheet returned consumption of bank capital, which greatly reduced the bank's willingness to lend. The dredge and wide credit transmission mechanism has become the policy focus since the second half of 2018, but the policy effect is less than expected, and the credit is in a state of “thinking wide and not wide”. So the central bank created CBS to encourage banks to issueReplenishing capital with perpetual bonds will help banks to expand their credit and will also bring about the expansion of the central bank’s balance sheet.

After the central bank created CBS, the China Insurance Regulatory Commission responded positively to protect the perpetual debt. The China Insurance Regulatory Commission announced that it will approve the second-tier capital bonds and perpetual bonds issued by qualified insurance institutions, and expand the sources of bank perpetual bonds. It can further improve the liquidity of perpetual bonds and promote the issuance of perpetual bonds to replenish capital. Going smoothly. At present, the first single-guaranteed debt will fall, and the policy will help the subscription to exceed expectations. In the short-term, it will help improve the market's expectations for social welfare and promote investor risk appetite. In the medium and long term, credit expansion and repair will be on the way. As the policy implementation is deepened, the social welfare will gradually improve and support the stable real economy. .

3. The first single-directed convertible bonds landed, and the mergers and acquisitions ushered in new changes

Recently, Saiteng shares (603283, diagnostic stocks) "issued convertible bonds, shares and paid cash purchases The assets and the raising of matching funds were “unconditionally approved by the M&A Audit Committee”. As the first domestically-tested water-convertible convertible bonds, the approval of the merger and reorganization of the convertible bonds of Saiteng shares is of great significance to the market transformation of mergers and acquisitions.

On November 1, 2018, the China Securities Regulatory Commission issued the "SFC piloted convertible bond mergers and acquisitions to support the development of listed companies", indicating that it will actively promote the use of targeted convertible bonds as M&A and restructuring transactions in light of specific circumstances. The pilot of the tool supports all types of enterprises, including privately-held listed companies, to become better and stronger through mergers and acquisitions.

In fact, this is not the first time that the directional convertible bonds have been encouraged by the policy level. As early as the November 2nd meeting of the China Association of Listed Companies, Xiao Gang, chairman of the China Securities Regulatory Commission, first mentioned “directed convertible bonds”. "The concept." Subsequently, the “Management Measures for Major Asset Restructuring of Listed Companies” revised in 2014 stipulates that listed companies may issue convertible bonds to specific objects for the purchase of assets or merger with other companies. Further, in August 2015, the “Notice on Encouraging Listed Companies to Merger and Reorganize, Cash Dividends and Repurchase Shares” once again encouraged the introduction of targeted convertible bonds as M&A payment instruments in addition to cash payments, share-based payments, and asset swaps.

After the Securities and Futures Commission issued a notice on encouraging the transfer of convertible bonds in November 2018, Saiteng sharesOn the second day, the “Notice on the Suspension of the Issuance of Convertible Bonds and Shares to Purchase Assets and Supporting Financing” was issued, and the plan was released on November 8, actively responding to the policy of the CSRC to support the issuance of convertible bonds. Followed by, China Power (600,482, the stock) issued a trading plan for the issuance of convertible bonds at the end of December. At present, the details of the targeted convertible bonds have not been released, so the two cases are used as test water projects, some of which are worthy of our attention:

The use of targeted convertible bonds

Both companies In the merger and acquisition project, the company issues the directional convertible bonds. The company's shares are only used to pay the equity consideration. China Power is not only used to purchase assets, but also to try to use the directional convertible bonds as a way to raise matching funds. At present, the project of Saiteng has been approved, which means that the way of purchasing assets through the transfer of convertible bonds in the merger and reorganization and the related clauses have been approved by the regulatory authorities. If China Power's plan can pass, then the targeted convertible bonds will be used as a way to raise matching funds in the merger and reorganization, and it is not possible to further promote the refinancing method as a non-public offering. And after 18 years of policy easing, the matching funds raised by listed companies in mergers and acquisitions can be used to supplement the liquidity of listed companies and underlying assets and repay debts.

Pricing of Convertible Bonds

The conversion price of the two companies' directional convertible bonds refers to the current pricing method for the issued shares in the merger and reorganization, and the issuance of directional convertible bonds to purchase assets. The pricing method has been approved and become an important reference for the pricing of future convertible bonds.

Among them, the directional convertible bonds issued for the purchase of assets refer to the pricing method for the listed company to issue shares to purchase assets, that is, the price is not less than 20 trading days before the pricing benchmark date, 60 trading days or 120 transactions. One of the average price of the company's stock trading on the day, the base date is the announcement date of the board resolution to purchase the assets.

The part of China Power's fund-raising matching fund issuance refers to the pricing of the matching fund for the issuance of shares, that is, the issue price is not less than 90% of the average price of the company's stock on the 20 trading days before the pricing benchmark date, and the base date can only be For the first day of the issue.

Stock repurchases provide stocks of shares for conversion

Sources of conversion of convertible bonds include shares issued by companies or companiesThe treasury shares formed by the repurchase of shares are in line with the contents of the stock repurchase revised in the 2018 Company Law. The "Company Law" has expanded the stock repurchase situation from the previous four items to six items. The two new items include "cooperating with the company to issue corporate bonds that can be converted into stocks" and "maintaining corporate credit and shareholders' rights", and the company has the most The repurchased shares can be held as treasury shares for 3 years. Then, when the stock price is undervalued, the listed company can carry out stock repurchase to increase investor confidence and stabilize the stock price. At the same time, this part of the stock as treasury stocks, when the stock price rises, the convertible bond holders convert shares, the use of treasury stocks to pay the conversion price does not affect the total share capital, can avoid the dilution effect of the new shares on the original shares. Therefore, for listed companies, stock repurchases can prepare for the company's debt-equity swap while stabilizing the stock price.

In addition, targeted convertible bonds have obvious advantages over traditional mergers and acquisitions.

Relieving cash flow pressure on acquirers

In mergers and acquisitions, usually involving higher-scale transaction considerations, cash payments will cause considerable payment pressure on the acquirer, and the cash flow to the company is Great test. The above pressure can be alleviated by issuing convertible bonds.

Inclusive options to increase subscription intention

Convertible bonds are a financing tool that combines the nature of claims and equity. The essence is “debt%2B stock call option”. After the lock-up period expires, the counterparty can decide whether to ask the listed company to repay the principal or interest or to convert the stock according to its own judgment on the company value and market price. Because the holder of the directional convertible bonds can decide whether to convert the shares according to the analysis of the fundamentals of the acquirer, the quality of the company and the judgment of the stock price. If the company's stock price goes down, the holder chooses not to convert the stock to the company to pay the principal and interest, and obtain the basic transaction consideration; if the company's stock goes up, the holder chooses to convert the stock and obtain a higher premium. Shareholders can enjoy the low risk of bonds, do not have to bear the uncertainty of stock price decline, and can enjoy the benefits of rising stock prices. Increased willingness of counterparty parties to subscribe.

Flexible terms protect the interests of both parties

Targeted convertible bonds have specific issue targets and the terms of the transaction can be personalized. The terms of the transaction for the directional convertible bonds are determined through negotiation between the parties, the conversion price, the conversion price amendment clause, the redemption clause, etc.The special terms can be adjusted and negotiated according to the needs of both parties to better meet the needs of both parties, taking into account the interests of both parties. For example, the price reduction clause can be set to protect the lower limit of the counterparty's income, but at the same time, the minimum cut-off price setting can also protect the control of the listed company from being affected. The price revision clause can be set to avoid excessive dilution of the equity when the stock price rises significantly, thus protecting the rights and interests of the minority shareholders. The early resale clause allows the counterparty to resell the bond in advance when the stock price is too low to reduce its own loss of interest. Conditional compulsory stock conversion protects listed companies, enabling the company to pay through equity when the stock price rises, avoiding the liquidity pressure caused by debt service.

In summary, the first case of targeted convertible bonds to pay for mergers and acquisitions has already fallen, which is to effectively alleviate the company's financial pressure in mergers and acquisitions, protect the interests of the participants, and resolve the future trend of the listed companies and their opponents. Disagreements and other aspects play an important role, which is more conducive to the completion and smooth implementation of the restructuring agreement, and promotes the recovery of the merger and acquisition market, and is expected to become a new refinancing method in the future.

4. The impact of the board's impact on A shares and investment opportunities

President Xi Jinping announced at the opening ceremony of the first China International Import Expo on November 5: will be trading in Shanghai Stock Exchange The establishment of the science and technology board and pilot registration system, support the construction of Shanghai International Financial Center and Science and Technology Innovation Center, and constantly improve the basic system of the capital market. On January 23, according to Xinhua News Agency, the Sixth Meeting of the Central Comprehensive Deepening Reform Committee reviewed and approved the “General Implementation Plan for Establishing a Science and Technology Board and Pilot Registration System on the Shanghai Stock Exchange” and “On the Establishment of the Section of the Shanghai Stock Exchange”. Implementation Opinions on the Establishment of a Pilot Registration System. The meeting pointed out: "The establishment of the science and technology board and the pilot registration system on the Shanghai Stock Exchange is an important measure to implement the innovation-driven development strategy and deepen the capital market reform. To enhance the inclusiveness of the capital market to science and technology innovation enterprises, and to support key core technology innovations. To improve the economic ability of the service entity. We must steadily pilot the registration system, promote the reform of the basic system such as issuance, listing, information disclosure, trading, and delisting, and establish and improve the stock issuance and listing system centered on information disclosure."

[123 The review of the "Overall Implementation Plan" means that the Kecheng board has entered the countdown and may eventually land in the first half of this year. KechuangThe establishment of the board will form the pattern of the Shanghai Stock Exchange-Kechuang Board and the Shenzhen Stock Exchange-GEM, which has profound significance for improving the capital market, especially for emerging industries, providing them with new financing channels; in addition, for a long time, China Both the examination and approval system will be implemented, and the pilot registration system will further improve the market system. The establishment of the science and technology board and the pilot registration system can be said to be a new milestone in China's securities construction.

The establishment of the science and technology board will change the current market structure and have far-reaching impact on science and technology enterprises, investors and markets.

(1) For the market participants, the establishment of the Science and Technology Board aims to enhance the capital market to serve technological innovation enterprises and promote the healthy development of the capital market; although the short-term may cause market capital diversion, affecting market liquidity. However, with the entry of incremental funds such as enterprise annuities, the scope of influence can be controlled; in addition, the establishment of the science and technology board is a major reform of the institutionalization of China's securities market, which will accelerate the internationalization of the Shanghai Stock Exchange and help Shanghai become an international financial center. .

(2) For enterprises, the establishment of Science and Technology Board has broadened the financing channels of some private enterprises, and solved the financing difficulties of private enterprises and small and medium-sized enterprises to a certain extent. At the same time, it has expanded the science and technology enterprises. Direct financing, stimulate technological innovation, and benefit the real economy; in addition, the company has increased the domestic direction of the capital market for overseas Chinese stocks and domestic unicorn companies, and promoted the return of overseas stocks. The direct financing of the Horns Enterprise saves time costs.

(3) For investors, it has broadened the investment channels of investors; however, due to the unevenness of science and technology enterprises, it will force the general investors to improve the ability to identify the company; As well as the improvement of the future delisting system, it will greatly reduce small and medium investors, and future investors will be mainly institutional investors. For VC/PE, the establishment of the science and technology board provides them with new channels for capital withdrawal.

(4) Impact on A-shares:

On the one hand, for listed companies, it will benefit the brokers and the shell companies. As the science and technology board provides a new way to go public, the investment banking business of the brokerage firm will expand accordingly. For the new three-board enterprises, under the expectation of limited liquidity in the hot market of Science and Technology, the New Third Board will further lose its investment value; however, the quality new three boards will increase the transfer route. Performance stocks and shellsSecretary, the value of hype is lost, and excellent technology companies can finance through the science and technology board without having to borrow a backdoor.

On the other hand, from the perspective of liquidity, many investors are worried that due to the establishment of the science and technology board, it will inevitably lead to the diversion of funds in the market, or will affect market liquidity. We believe that under the foreseeable period and current policy expectations, based on the consideration of A-share funds, the pace of listing of science and technology, the threshold of listing of science and technology, and the threshold of investors in science and technology, this concern is not necessary.

Finally, from the perspective of valuation, we published an in-depth report in October 2017, “Reassessing the A-share scarcity technology leader: three methodologies – A-share Nirvana (Wu)” :

? ? Companies that are able to continue to invest in R&D on a large scale and have formed certain technology and platform advantages have become scarce. Scarcity factors have shifted from small market capitalization to high R&D, high intangible assets, and high platform value.

? ? Applying the traditional PE/PEG-based valuation method to technology stocks is essentially a company that punishes high R&D investment. Therefore, we construct an indicator “pre-revenue expenditure surplus” E; R(earnings; research) to revalue R&D investment. . As the name implies, the use of non-net profit plus cost-based research and development indicators. And by calculating E; R and its growth rate, PER and PERG are constructed.

The artificial intelligence, integrated circuits, aerospace, biomedicine, etc. preferred by Kechuang Board are all areas of high R&D investment ratio. According to the 2017 annual report data, the R&D investment in the above four fields accounts for the revenue ratio. They were 9.01%, 7.44%, 3.69%, and 2.55%, respectively, which was much higher than 1.44% of all A shares. As the industry's R&D investment ratio is higher, the valuation system will change after the opening of the board, and the R&D investment will be included in the valuation system. Therefore, the overall sector of the board and the company's valuation method will be compared with the traditional valuation. There are differences in the value method, which will have two major effects:

First, for the company, the overall PE may be higher and the PER is at the same level as similar companies overseas;

Second, the valuation system of listed A-share emerging industry listed companies will be closer to the company, and in the context of the downward trend of valuation for several years, the final result is likely to beThe valuation of A-shares will also be boosted.

Based on the above factors, we believe that the establishment of the Science and Technology Board has limited impact on the GEM in the foreseeable time. From another point of view, the first batch of excellent targets of Science and Technology Board will not be ruled out by the market to give higher valuation. In addition, due to the relatively high R&D investment of Science and Technology Board, the PER valuation system will be more valued. Through the parity effect, the valuation of outstanding technology companies in A-shares is further enhanced.

In general, the establishment of the science and technology board and the pilot registration system are major attempts in China's capital market, and will continue to improve the capital market infrastructure system, which is a new milestone in China's securities construction. In the long run, Kechuang Board has expanded the financing channels of science and technology enterprises, providing opportunities for overseas Chinese stocks and domestic unicorns to be listed; clearing listed companies that lack investment value, rectifying the market environment; stimulating technological innovation and benefiting the real economy Support the construction of Shanghai International Financial Center and Science and Technology Innovation Center, and constantly improve the basic system of capital market.

From the perspective of investment strategy, the science and technology sector industry chooses to focus on high-tech industries with hard technology and innovation capabilities, and has certain fixed assets accumulation, profit conversion has sustainability and growth potential, we believe The biggest drivers are semiconductors, biomedicine, artificial intelligence, etc. The stock A-share technology industry is expected to benefit from the valuation improvement and long-term performance improvement (financing cost reduction, financial cost optimization), and venture capital companies are expected to benefit. Rich in exit channels. For A-share listed companies, there are three investment ideas for reference:

First, A-share listings participate in the holding of the board, the performance will directly benefit from the science and technology board, the relevant A-share shadow stocks may There is an opportunity for thematic investment;

Second, in addition to the A-share listed company participating in the holding, if the listed companies in the A-share market have comparable companies, the corresponding comparable company valuation is expected to benefit from the science and technology The board is corresponding to the evaluation of the target value;

Third, the venture capital A-share listed companies benefit from the richness of the project exit channels, both fundamental and thematic level may be sought after by the market.

5. Strategic views and investment proposals

The central bank's balance sheet showed non-seasonal expansion in December, especially the “other assets” showed historical growth.It has special meaning. Although the composition of “other assets” has not been announced, it is reasonable to speculate that it can only be equity assets or non-gold commodities.

If the current central bank's expansion continues, it may cause a significant recovery in the price of certain types of financial assets. If the property policy and infrastructure are greatly relaxed, the probability of rising prices and bulk continues to rise. If the “other assets” belong to the equity category and the government directs liquidity to equity assets, the price of equity assets is expected to appreciate. From the perspective of policy ideas, the probability of the latter may be greater.

Comprehensive central bank assets “transactions” and active expansion of communication and expansion, we believe that it is necessary to pay close attention to the credit-integration signal. If the growth rate of the social welfare is warming up, the central bank will actively expand the table, and the credit will follow the expansion. And the property may pick up. If the social stability is stable, then liquidity may be consciously led into the bond and capital markets, then the partial growth style may benefit more from the capital market policy dividends and the science and technology board, "TMT + military" may be dominant.

02

Market transaction characteristics tracking

In terms of valuation, all A-share valuations (TTM) rose slightly from 13.71 to 13.75, but all financials were excluded. The stock valuation has declined from 18.75 to 18.71. The valuation of small and medium-sized board rose from 24.27 to 24.31, and the valuation of the ChiNext continued to decline, from 42.57 to 42.42. The valuation of the small and medium board index rose from 19.83 to 19.85, and the valuation of the GEM index fell from 28.82 to 28.65. The valuation of the Shanghai and Shenzhen 300 constituent stocks rose from 10.66 to 10.74, and the valuation of the CSI 500 constituent stocks fell from 16.90 to 16.84.

In terms of sub-funds, the scale of lifting the ban on restricted shares will fall next week. The size of the first lifting of the ban is 14.2 billion yuan, and the scale of lifting the ban is 17.7 billion yuan. Last week, the important shareholders of the secondary market reduced 16.92. 100 million yuan, an increase of 1.791 billion yuan, a net increase of 0.98 billion yuan; listed companies repurchase scale decreased, the amount of repurchase announced last week was 1.206 billion yuan. The net inflow of Lu's shares was 9.58 billion yuan, a decrease of 7.45 billion yuan from last week; the balance of the two funds decreased to 747.362 billion yuan, a decrease of 3.363 billion yuan from the previous week; last week until 2On 01.14.24, the newly established partial stock fund was 2.863 billion, a decrease of 338 million yuan from the previous week.

In 2018, the overall IPO slowed down, a total of 105 companies were listed and issued, with a fundraising scale of 137.9 billion yuan. In January 2019, 13 companies were listed and issued, with a fundraising scale of 10.6 billion yuan, and 2018 In December, a total of five companies were listed and issued, with a scale of 2.8 billion yuan. The IPO speed in January increased significantly. In December 2018, 77 listed companies received refinancing approvals. In January 2019, 22 companies received refinancing approvals, and the pace of approval was reduced.

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