carcrashgames| The Shanghai Composite Index rose 4.96% year-to-date: supply in the consumer sector improves, and expectations for ROE repair increase
editor 2024-05-27 18:29:51 Nature 35
News summary
Economic fundamentals are dividedcarcrashgamesManufacturing investment exceeded expectationscarcrashgames, the Shanghai Composite Index rose 4carcrashgames.96%, dividend style is better than growth. Supply in the consumer sector has improved, corporate operating cycles have bottomed out, consumer investment valuations are attractive, and long-term investment value is significant.
Newsletter text
Since the beginning of this year, the economic fundamentals have shown the characteristics of stable aggregate but internal differentiation. Currently, the conversion of old and new momentum is at a critical stage, and the strong performance of manufacturing investment echoes the reaction of the A-share market. Year-to-date, the Shanghai Composite Index has reached 4.5%.carcrashgames.96% growth, while the GEM index fell 2.49%. Investors 'preference for certain assets has increased, and the dividend style has outperformed the growth style. Driven by the home appliance sector, the home appliance industry performed outstandingly, while the commercial and retail sector suffered a large decline.
Currently, the consumer sector is undergoing some positive changes. The repair of the demand side is still in progress, but improvements on the supply side have already appeared, indicating that consumption will return to high-quality growth. In the past few years, the consumer market has undergone a transformation from bottom to prosperity, with new consumer groups, online channels and new marketing methods driving the rise of new brands. However, with the downward trend of the economic cycle and the ebb tide of capital, the shortcomings of new consumer brands have begun to emerge. This year, changes on the supply side have a greater impact on most consumer goods industries than on the demand side, which will help improve the industry landscape and restore ROE.
In addition, more and more consumer companies are experiencing a bottoming out of the business cycle. With the stabilization of the bottom of the economy and the improvement of the industrial competition landscape, many companies have successfully seized new growth opportunities through self-innovation and organizational optimization. This increases the opportunity for bottom-up stock picking.
Looking to the future, the prospects for consumer investment remain optimistic. The valuations of most consumer targets have been digested for three years, and both absolute levels and cross-industry comparisons show high cost performance. Taking into account the stability of the consumption pattern, good free cash flow conversion ability and increased willingness to pay dividends, most consumption targets have a high margin of safety and long-term investment value. In the long run, new industry trends in the domestic consumer market, excellent enterprises in consumption overseas and domestic substitution will be the focus of investment.
The recent earnings season has verified these industry insights. Investors should continue to pay attention to changes in industry prosperity, the speed of pattern improvement, and the operating cycles of individual stocks to fully explore investment opportunities.