Cailian (Shanghai, editor Zhai Zhehao and Feng Lin) News,Unconsciously, A shares have quietly passed in the first half of 2024. Looking back at the market in the first half of the year, some hot sectors are active. From the data point of view, the total turnover of the two cities reached 100.17 trillion yuan, a decrease of 10.93 trillion yuan compared with the same period in 2023 (111.1 trillion yuan) and a year-on-year decrease of 9.83%.
In terms of overall market size, the market value of listed companies in the first half of this year was 85.00 trillion yuan, which was nearly 1.80 trillion yuan lower than the market value of listed companies at the end of 2023 (86.80 trillion yuan).
In terms of index performance, in the first half of 2024, the Shanghai Composite Index closed at 2,967.40 points, down 0.25% in the first half, with the lowest at 2,635.09 points and the highest at 3,174.27 points. Shenzhen Component Index closed at 8848.70 points, down 7.10%, with the lowest at 7683.63 points and the highest at 9805.92 points. Growth enterprise market index closed at 1683.43 points, down 10.99%, with the lowest at 1482.99 points and the highest at 1926.40 points.
Looking back at the first half of this year, although various concepts are still emerging one after another, synthetic biology, commercial aerospace, synaesthesia integration and so on have come and gone, but only dividends can really achieve a trend increase, the market operation is not satisfactory, and dividend stocks with defensive attributes are fascinating, and many related sub-sectors such as banks, electricity, highways and coal have achieved significant excess returns in the first half of the year. At the same time, the concept of low-altitude economy, as the strongest theme in the first half of the year, stood out from the whole market with an increase of 18.42%, and brought out a number of bull stocks such as Wan Feng Aowei, CITIC Haizhi and Jianxin. In addition, consumer electronics concept stocks such as PCB, AI mobile phone and AIPC also set off an upsurge at the end of the first half of the year, which became a hot spot that investors could not ignore.
How many of the top ten outlets in the first half of 2024 belong to you?
NO.1 low-altitude economy
Low-altitude economy is undoubtedly the most popular theme concept in the first half of this year. Since the two sessions of the National People’s Congress wrote the low-altitude economy into the government work report, local governments in various provinces and cities have intensively issued relevant policies to seize the opportunity period of low-altitude economy development, rapidly promote the deep integration and coordinated development of related industrial chains, and accelerate the landing of low-altitude economy industries. According to the data of "National Three-dimensional Traffic Network Planning Outline", the industrial scale of China’s low-altitude economy will reach 6 trillion yuan by 2035, with a compound annual growth rate of 7.6%.
Looking back at the market performance, the concept of low-altitude economy showed a strong profit-making effect in the context of weak market environment in the first half of the year. First of all, from February to March, it went out of a comprehensive main rally, and after a period of correction, it ushered in a second wave of speculation in mid-April. Among them, Wan Feng Aowei’s highest increase in the first half of the year was more than 4 times, and popular stocks such as Rice Information, CITIC Haizhi and Jindun shares also rose by more than 200%.
In addition, with the low-altitude economic bidding in various places in the past three months, the expectation of policy transmission to orders is constantly strengthening. In the second half of the year, the low-altitude economy is expected to shift from the previous conceptual hype to the fundamentals of order landing. In the follow-up, we can still pay attention to the direction in which the pace of industrial trends obviously exceeds expectations in the main links of low-altitude economy such as the whole machine and parts, planning and design, management system and operation.
NO.2 bank
If only from the perspective of one-day increase, the banking sector is easily ignored by the market, but in fact, banking stocks are one of the best directions for the plate effect in the first half of the year, with an overall increase of nearly 20%. The reason is that in 2024, the equity market fluctuated greatly, investors’ risk appetite declined, and funds sought more certain returns. The high dividend yield and extremely low valuation of banking stocks have become the first choice of funds, and the demand for defense in the superimposed market has increased, which has boosted the market performance of the entire banking sector.
From the profit side, the optimization of real estate policy, the promotion of debt package, the repair of bank income statement and the improvement of industry risk expectation will help to support the valuation. In addition, according to the statistics of Industrial Securities, the banking sector is one of the sectors with the highest proportion of passive fund positions, and it has become a direction that has benefited significantly from the expansion of passive funds. In terms of individual stocks, Bank of Nanjing, Bank of Chengdu and Bank of Changshu were among the top gainers, with a half-year increase of over 30%, while the trillion-dollar giant Agricultural Bank also rose by over 25%, while ICBC just hit a new high in the year, with the total market value of A shares and H shares also surpassing Kweichow Moutai.
Looking forward to the performance of the banking sector in the second half of the year, the allocation value of banks as fixed-income assets still exists under the background of asset shortage, and the allocation value of large and medium-sized banks with high dividends is still outstanding at present. At the same time, we should pay attention to the catalysis of steady growth and the effect of real estate policy on regional banks and stock banks.
NO.3 electric power
The power sector also performed well in the first half of the year. In the context of the overall weakness of the index environment, it has stepped out of an independent trend market. And the leading stocks are mostly large market capitalization weights, among which the benchmark stock Changjiang Power has increased by more than 20%, and the current total market capitalization exceeds 700 billion, while China Guangdong Nuclear Power, Guodian Power, SDIC Power and China Nuclear Power have also increased by more than 30% in the first half of this year.
The reason why the power sector can show excess returns. On the one hand, the profitability of thermal power enterprises has been improved by the decline of coal price and the improvement of electricity price, and the performance of 1H24 thermal power continues to improve. At the same time, the promotion of electricity reform policy, such as the landing of capacity price and coal-electricity linkage, has enhanced the performance stability of thermal power enterprises and enhanced the market’s confidence in the thermal power sector. In addition, the abundant cash flow and high dividend-paying ability of related core enterprises also provide defensiveness and attract the group of medium and long-term allocated funds.
Generally speaking, the trend market of power sector is expected to continue into the second half of the year under the resonance of performance improvement, policy support and the defensive characteristics brought by the high dividend of leading enterprises.
NO.4 zhongtegu
In the first half of the cold market, the China Special Appraisal Board, which has the characteristics of "industry leader+large market value+low valuation+high dividend", became the most enthusiastic haven for market funds:
China CNOOC rose by 57.37% in the first half of the year, a record high;
Bank of China rose 15.79% in the first half of the year, a record high;
China Mobile rose 10.49% in the first half of the year, a record high;
In addition, COSCO Haikong, China General Nuclear Power, China Petroleum, China Nuclear Power and China Shenhua all increased by more than 40% in the first half of the year.
From the policy point of view, on January 24th this year, at the press conference of the State Council Press Office, the relevant person in charge said that market value management would be further studied and incorporated into the performance appraisal of the heads of central enterprises, so as to guide the heads of central enterprises to pay more attention to the market performance of listed companies controlled by them. According to the institutional research report, in 2023, the dividend rate of many central enterprises has been significantly improved. Under the policy constraints, it is expected that the market value management measures of listed central state-owned enterprises will be introduced one after another, which will increase the market value management power of central state-owned enterprises and accelerate the repair of valuations.
Looking forward to the second half of the year, a number of brokers, including Western Securities and Founder Securities, said that a "new dumbbell" combination is expected to continue to outperform in the market outlook, that is, one end is "Zhongte Estimate" and the other end is "Cote Estimate". In addition, it does not rule out that the central state-owned enterprises or the fields related to launching a new round of mergers and acquisitions have key technologies that can be controlled independently. Therefore, the directions of advantageous industries, self-control and future industries are also worthy of attention.
NO.5 Sora concept
In February this year, the concept of Sora was born. The so-called Sora is a text-controlled video generation model developed by OpenAl, which can generate high-definition smooth video for 60 seconds according to the text instructions input by users. Analysts said that the introduction of Sora model will promote the innovation of content creation in the media industry, especially in the field of short video, which may bring about the rapid growth of short video production capacity. At the same time, it is also expected to empower other fields, such as film and television/animation, marketing education, games, etc., and promote the development of related industries by improving content production efficiency, innovating content forms and enhancing user experience. In addition, the increase in Sora’s demand for computing power will drive the demand for upstream computing power infrastructure to grow, bringing investment opportunities to related hardware and software companies.
From the market point of view, the emergence of Sora concept once led the application direction of AI software out of a wave of main rising market from February to March. Among them, Wei Haide once walked out of the 20CM 7 board, and the shares of Annoqi and Insai Group also tripled in just one month. However, since the end of March, related concept stocks have fluctuated all the way down. Until recently, it was stimulated by the news that OpenAI would suspend the API port in China, which ushered in a certain degree of rebound. However, with the coming of July, the interim results of listed companies will be intensively disclosed, and the follow-up can focus on which segment of the AI application field is the first to usher in performance cash.
NO.6 coal
The coal sector still maintained a relatively independent trend market in the first half of this year. From the demand side, the demand for energy and electricity remains flexible, and the problem of new energy consumption and the growth of thermal power installed capacity will stimulate the demand for thermal coal. At the same time, the policy of steady economic growth is expected to promote the recovery of domestic demand, and the periodic resonance of replenishment at home and abroad may bring about improvement in demand. On the supply side, the long-term capital expenditure of the coal industry is insufficient, and it is expected that the tight supply of coal will continue. In the boom cycle of the coal industry, the increase in costs and the injection of assets of central state-owned enterprises will highlight the profitability and growth certainty of the sector.
However, it should be noted that the differentiation of coal stocks is obvious, among which Xinji Energy is the strongest, rising by more than 80%, Haohua Energy is not too much, rising by more than 50%, while China Shenhua, Shaanxi Coal Industry and China Coal Energy, which rank the top three in market value, all rise by more than 25%. While stocks such as Anyuan Coal Industry, Lu ‘an Huaneng and mountain coal international dropped significantly. This may be related to the performance growth of individual stocks and the dividend ratio. Therefore, in the context of no major switch in market style in the second half of the year, we should still focus on those leading enterprises with high dividends and stable cash flow.
NO.7 expressway
As an important part of dividend stocks, the expressway sector has strong defensive attributes, and has achieved considerable excess benefits in the downturn of the market. Among them, Shandong Expressway rose by 35.74% in the first half of the year, and Jiangxi-Guangdong Expressway, Wantong Expressway, Sichuan Chengyu Expressway, Nanjing-Shanghai Expressway and Guangdong Expressway A rose by more than 20% in the first half of the year.
From the perspective of dividend yield, over the years, high-speed plate companies generally have a high dividend yield and dividend ratio. The dividend yield of Fujian Expressway has exceeded 8% in the past 12 months, and the dividend yields of Shandong Expressway, Sichuan Chengyu and Guangdong Expressway A have exceeded 4%. Some companies will even raise the dividend ratio for many times. Take Wantong Expressway as an example, the planned dividend ratio is 60% in 2021-2023, and it was originally raised to 70% in 2023-2025 and then raised to 75% again.
In addition to sub-infrared, the reform of future highway laws and regulations is another highlight of the plate. On April 8, the National Development and Reform Commission and other departments issued the Management Measures for Franchising Infrastructure and Public Utilities, which came into effect on May 1, 2024. The 2024 edition of the Management Measures stated that "the franchise period should not exceed 40 years in principle, and franchise projects with large investment scale and long return period can be appropriately extended according to actual conditions". Huatai Securities Research Report pointed out that the longest charging period of current operating expressways is 25 years in the east and 30 years in the central and western regions. If the "Regulations on Toll Road Management" follows the "Measures" to raise the operating period, the rate of return of highway reconstruction and expansion projects is expected to increase, and the valuation level of the whole industry is expected to increase.
NO.8 nonferrous metals
Cyclic resource stocks represented by nonferrous metals are also unavoidable in the first half of this year. The expected deduction of the Federal Reserve’s interest rate cut cycle and the warming of global risk aversion caused by geopolitical conflicts have led to a collective surge in the prices of non-ferrous metals such as gold, silver and copper, with COMEX gold futures once exceeding $2,400 at the highest, and Luntong copper futures once exceeding $11,000 per ton.
In addition, from the demand side, with the expected strengthening of global economic recovery, the demand for metals is expected to increase, especially industrial metals such as copper and aluminum, which will benefit from the continuous growth of new energy demand and the recovery of domestic economy, and also push up prices and drive the performance of related enterprises to rebound. In addition, from the perspective of capital, in the first quarter of 2024, the non-ferrous plate was the direction that received the most infrastructure allocation, which once again showed that the market remained optimistic about the medium and long-term prospects of these metals. It is precisely under the constant catalysis of the above-mentioned price increase logic that the market has emerged such trends as North Copper, Luoyang Molybdenum, Hunan Gold and Zijin Mining.
Looking forward to the market of non-ferrous plates in the second half of the year, under the background that international metal prices remain at a high range, related stocks still have the possibility of upward repair after finishing. In addition, we can also pay attention to small metals such as antimony, which are driven by the rise in industrial metal prices. However, we also need to pay attention to the impact of potential risk factors such as changes in Fed policy, uncertainty of downstream demand recovery and geopolitical risks on the market.
NO.9 PCB
According to the Prismark report, the global output value of printed circuit boards (PCBs) in 2023 was $69.517 billion, down 15% year-on-year. With the destocking and the accelerated growth of downstream application demand, the industry is gradually recovering from the downturn in 2023. A person from the Securities Department of Shenghong Technology told the Cailian reporter that the downstream demand has recovered better than last year and has begun to pick orders.
However, the recovery of PCB industry is dominated by structural opportunities, and some enterprises may face greater operating pressure. Xing sen technology mentioned that the oversupply and fierce competition in the general multi-layer board market can hardly be substantially alleviated when accepting institutional research. In terms of market performance, Pengding Holdings, Shenghong Technology, Shengyi Electronics, Hudian, etc. have risen over 60% since the first half of the year, but nearly 80% of the stocks in the whole PCB sector still have negative annual growth.
Some analysts said that the categories with relatively stiff market demand include high-end PCB products in the fields of AI servers, new energy vehicles and 5G. The requirements of PCB layers and special processes for AI servers and high-speed switches are complicated, and the industry barriers are high. Only a few digital board manufacturers in the world can undertake relevant orders, which will also put forward higher requirements for investors’ fundamental judgment.
NO.10 AI mobile phone &AI PC
The wave of AI is still going on. The market value of NVIDIA has exceeded US$ 3 trillion. However, the AI concept stocks of A-shares have long since ceased to be the grand occasion of last year, and the market’s hype for AI tends to be rational. Except for some computing hardware directly involved in the supply chain of NVIDIA, the most sought after by funds is the end-side AI concept represented by AI mobile phones and AI PC.
First, at the Microsoft Build Developer Foresight Conference in May, Microsoft launched a new artificial intelligence computer named Copilot+PC, and then Apple launched Apple Intelligence at WWDC in June, showing a new form of AI mobile phone. Western Securities pointed out that with the maturity of end-side AI technology from the core layer to the application layer, consumer electronic terminals have entered an important window of product iteration. All terminal brand manufacturers are integrated into the "AI blood" and constantly innovate, which is expected to cause a new round of "machine change tide" for end users.
With the technical iteration of AI end-side products and applications, the market expects more AI explosive products to appear. Since the end of May, a number of AI mobile phones and AI PC concept stocks have soared, which has driven the whole consumer electronics sector to rise in resonance. Among them, Yingli shares rose by more than 160% in 9 trading days, and Luxshare, Lansi Technology, Lingyizhi and other large-cap stocks all rose by more than 20% in June.