Guotai Junan Securities released a research report sayingLargestlotteryjackpoteverFrom economic, policy and stock market uncertaintiesLargestlotteryjackpoteverThe reduction is expected to promote the improvement of investors' acceptance of risk, expected repair and replenishment of positions, and investment opportunities are expected to rise in shock and rise in the middle of the year. The focus of investment is on growth stocks. 1) Technology manufacturing industry: long adjustment time pessimistic expectations clear, looking back on the sector where uncertainty is expected to decline, recommended: electronic semiconductors / automobile / military industry / machinery / communications / innovative drugs; 2) brokers + growth cycle and consumption. Declining uncertainty in the stock market + M & An expectations, optimistic about the rebound of brokers; focus on medicine / cosmetics / beer beverages, and non-ferrous / steel new materials; 3) Hong Kong stocks spread hard technology and medicine in addition to the Internet.

The return of Chinese trading: spring is still there, and investment opportunities are in the middle of the year. Chinese trading is quietly returning, with the Shanghai Composite Index breaking through the key position of 3100 and the Hang Seng Index breaking through 18000, but the market is still divided. Guotai Junan's view is different from the 23-year situation in which stock market expectations are high and positions are high, but optimistic expectations continue to fail. After falling at the beginning of the year and adjusting most stocks in March-April, stock market expectations are low, valuations are low, and positions are also low. The consensus on low consensus implies potentially unexpected room for returns and a more positive response to marginal good. The reduction of uncertainty from the economy, policy and stock market is expected to promote the improvement of investors' risk acceptance, expected repair and replenishment of positions, and investment opportunities are expected to rise in shock and rise in the middle of the year.

The driving force of the market is not the upward revision of growth expectations, but the reduction of uncertainty. After three years of adjustment and clearing, the low valuation of the market reflects the accumulation of medium-and long-term uncertainty. Marginal changes are emerging and the market needs to assess its positive effect on stock pricing:

1) the uncertainty of stock market volatility is reduced. Policy makers recently pointed out that "promoting the stable and healthy development of the capital market is an important embodiment of economic development and governance ability." the related two sessions "enhance the inherent stability of the capital market", the State Council's "New Nine articles" and the CSRC promote a series of "investor-oriented" reforms, implying stock market fluctuations and a clear bottom line.

2) the policy uncertainty is reduced. Policies to boost domestic demand have become more proactive. After three years of real estate consolidation, it has entered an easing cycle, promoting large-scale equipment upgrading / trade-in domestic demand measures, coupled with "issuing ultra-long-term special treasury bonds for several consecutive years" and exploring the central bank buying and selling treasury bonds in the secondary market and enriching the monetary policy toolbox, the policy space is being opened.

3) the economic uncertainty is reduced. The reduced drag on price inflation, coupled with the accelerated pace of special treasury bond issuance and fiscal spending from May to June, is expected to promote the formation of physical workload. Expectations are no longer revised down, uncertainty falls, or an important cornerstone of the stock market rally.

The policy avoids "tightening in front and loosening later" to dispel doubts, and the third Plenary session of the CPC Central Committee has led to a rise in reform expectations. The Politburo meeting was positive and pragmatic, and there were three major points of interest in the domestic demand policy: 1) the meeting clearly put forward the idea of "avoiding tightening in front and loosening later, and effectively consolidating and strengthening the trend of economic recovery." it dispelled the market's misgivings about the improvement of economic growth and that policies may not be as good as expected. 2) put forward the overall study of digesting the stock of real estate and optimizing the incremental housing policy, analogous to the Politburo's attention to local debt in July 23, the focus of incremental policy is expected to reduce the smooth landing of real estate; 3) interest rates and reserve requirements are clearly mentioned in monetary policy, indicating that a decline in real interest rates is possible. Guotai Junan believes that the most important change of this meeting is that it is clear that the third Plenary session of the 20th CPC Central Committee will be held in July. and re-emphasized the importance of reform and opening up and measures such as "further liberating and developing social productive forces, liberating and enhancing social vitality", and the market is expected to recalibrate medium-and long-term development expectations.

Uncertainty declines, investment opportunities in technology manufacturing, and growth in materials and consumption. The market comes from a decline in uncertainty rather than an upward revision in earnings expectations, so mid-year investments are focused on growth stocks. Recommendation: 1) technology manufacturing industry: long adjustment time pessimistic expectations clear, looking back on the sector where uncertainty is expected to decline, recommendation: electronic semiconductors / automobile / military industry / machinery / communications / innovative drugs; 2) brokerage + growth cycle and consumption. Declining uncertainty in the stock market + M & An expectations, optimistic about the rebound of brokers; focus on medicine / cosmetics / beer beverages, and non-ferrous / steel new materials; 3) Hong Kong stocks spread hard technology and medicine in addition to the Internet.