CICC: The current position is not pessimistic about the downside of the class A share market

On September 15th, according to the analysis of the research report of China International Capital Corporation, the economic data in August showed that domestic demand was still weak, and the marginal slowdown was lower than that in July. The year-on-year growth rate of the industrial and service industries at the production end declined, while the external demand at the demand end remained resilient, and the year-on-year growth rate of consumption and investment in domestic demand slowed down. In terms of the sub-investment structure, real estate development investment was still weak, with a decrease unchanged from January to July, and the growth rate of infrastructure and manufacturing investment also slowed down. August price and financial data also reflect that demand needs to be improved. On the one hand, the endogenous momentum depends on the rhythm of the implementation of existing policies (government bond issuance, project construction, trade-in of consumer goods, etc.). On the other hand, new policies need to be Combined with recent fundamental data, CICC believes that the current market remains cautious about fundamentals in the short term, and the market generally has high expectations for macro policy strength, which will still restrict market performance to a certain extent. However, from the valuation of the market itself, the current CSI 300 dividend yield is close to 3.5%, exceeding the yield of 10-year government bonds by 1.4 percentage points. Whether it is historical vertical or global horizontal, it reflects that the market has a good margin of safety. Recently, the market has fallen and there has been a compensation for strong stocks. Combined with CICC's judgment that the progress of fiscal spending in the fourth quarter may accelerate, the current position is not pessimistic about the downside space, and it may not be difficult to rebound from oversold. But if the market is to come out of the bottom and show a more obvious recovery, it may still need to be patient and rely on macro policies, especially fiscal efforts, to reverse the current pessimistic expectations.