In the first half of 2024, the market showed a volatile recovery pattern of first suppressing and then rising. At the beginning of the year, the index continued to be weak and accelerated to bottom. Before the Spring Festival, the Shanghai Composite Index fell below 2700 points, but after a significant decline, the market ushered in a technical recovery and rebound opportunity. With the implementation of the new "National Nine Measures" and the implementation of the Two Sessions policy, as well as the strengthening of policy expectations, the market is gradually recovering from volatility, and the index is gradually stabilizing. Although the market entered a range of volatility in the second quarter, it is still in a rhythm of recovery from volatility in the first half of the year. Securities firms believe that with the adjustment of macroeconomic policies and the gradual stabilization of market sentiment, the market is expected to usher in a period of restorative recovery.

Galaxy Securities:

The winning rate of growth stocks will significantly increase

In the first half of the year, the growth momentum of China's outbound chain was particularly significant, with strong resilience in foreign trade. With the gradual recovery of the global economy and the recovery of the manufacturing industry, the overseas business revenue of Chinese enterprises is expected to achieve sustained growth. The performance of industries such as electronics, household appliances, automobiles, mechanical equipment, basic chemicals, and power equipment in 2024 is expected to continue to benefit from the increase in overseas growth rate. In addition, as of mid June, 1554 listed companies have implemented buybacks since the beginning of this year, with a total buyback amount of 94.013 billion yuan, setting a new historical high for the same period.

In the second half of the year, the macroeconomic recovery efforts are expected to continue to increase, and A-share performance is expected to stabilize and rebound. The current valuation of A-shares is at a historically low level, and the improvement in fundamentals has driven investors to increase their risk appetite. In addition, with the strategic layout of policies, the probability of A-shares oscillating upwards will be significantly increased. In the second half of the year, the market for small cap stocks is expected to gradually improve; The growth value style is moving towards a more balanced direction, with value stocks slightly dominating. As the interest rate difference between China and the United States continues to narrow, the winning rate of growth stocks will also significantly increase.

The game about themes and industry structure. One is that investor risk appetite is gradually improving, but overall it is still at a historical low, so the high dividend market is expected to continue throughout the year; Secondly, technological innovation, as a medium - and long-term development theme, is easily affected by hot events in the short term, which is expected to lead to phased market trends; The third is that the prosperity of the theme of going abroad is expected to continue to rise, which is beneficial for related industries; Under the implementation of large-scale equipment updates and the action plan of exchanging old for new consumer goods, the investment value of the midstream manufacturing and downstream consumer industries with high absolute growth rate and low valuation of A-share performance is expected to gradually be valued.

Dongwu Securities:

Technology growth style is expected to rise

The key to obtaining excess returns in the second half of the year lies in grasping the style, and the growth style is expected to rise, especially with a positive outlook on technological growth. Looking ahead to the second half of the year, the convergence of the nominal growth rate gap between China and the United States is expected to drive the narrowing of the interest rate gap between China and the United States, becoming a core factor in the recovery of Chinese asset prices. On the one hand, signs of weak US consumption are evident, inflation resilience is falling, and the weakening of nominal US economic growth may show a trend; On the other hand, in the global manufacturing industry's upward cycle, the repair of external demand combined with policy efforts will help boost the domestic economy.

After 2019, the impact of style on excess returns is much greater than before 2019. Behind the rise of value style in the past three years is the continuous adjustment of economic expectation slopes and the rise of valuation premiums for high dividend defense sectors. This market style cycle has significantly exceeded the duration of the past two rounds. With the gradual easing of overseas liquidity, growth styles are expected to dominate.

At a critical stage of market style switching, with continuous policy support, technology stocks are expected to "seize the opportunity". The sustained efforts of policies are backed by the macro background of anti globalization and the game of great powers. From a trading perspective, technology stocks are in line with market preferences and have a cost-effective valuation. Suggest paying attention to: advantageous manufacturing industry, cutting-edge emerging industries and future industries, and digital economy. Focus on tracks such as semiconductors, autonomous driving, information and innovation, and low altitude economy.

Dongguan Securities:

The market is expected to recover in the second half of the year

The domestic economy operated stably in the first half of the year, and the follow-up policy support is expected to continue to increase. In particular, the issuance of treasury bond, equipment upgrading, consumer goods trade in, and the adjustment and optimization of real estate policies will promote the stability of the economy in the second half of the year. Under the guidance of the new "National Ninth Article" policy, the capital market will experience deepening reforms, and the results of these reforms are expected to gradually be realized in the second half of the year. The current market valuation is still at a relatively low historical level. The fundamental factors that suppressed the market in the first half of the year may improve moderately in the second half, and market confidence will gradually recover. With the gradual stabilization of economic fundamentals and the continuous promotion of capital market policies, the market is expected to experience a sustained recovery and recovery pattern in the second half of 2024.

Operational strategy and investment mainline: 1. New quality productivity mainline with strategic emerging industries and future industries as the main body: focusing on strategic emerging industries such as intelligent connected new energy vehicles, high-end equipment, new energy, and new materials; On the other hand, attention can also be paid to future industries such as quantum technology, life sciences, and low altitude economy. Under the valuation system with Chinese characteristics, the main theme of reshaping the valuation of state-owned enterprises with undervalued values, high dividends, and stable profits is to focus on undervalued, high dividend, and stable profit sectors, such as public utilities, banks, infrastructure, etc. 3. Value return mainline benefiting from industry recovery or stable performance: Focus on industries with phased repair potential, such as power equipment, as well as consumer chain industries such as home appliances and food and beverage.