The annual strategies of many brokers are optimistic about the market expectations for next year： A shares are expected to usher in valuation, repair growth style or be relatively dominant.

K-line chart of high-voltage fast charging plate index day (Zhang Dawei drawing)

　　Near the end of the year, a number of investment strategies of brokers in 2024 have been released one after another, making the latest judgments on macroeconomics, market trends and sector allocation in the new year. Institutions generally believe that the macro economy will continue to improve next year, and A shares are expected to usher in valuation repair. However, there are different views among brokers on the judgment of market style.

　　Macroeconomic recovery is expected to continue next year.

　　Looking forward to the economic situation next year, many institutions believe that with the continuous efforts of policies, the domestic macro-economy will continue to improve and market confidence will be boosted.

　　Huaan Securities predicts that the endogenous growth of the domestic economy will be around 4.6% in 2024, and with the help of policies, it is still expected to achieve a GDP growth rate of around 5% throughout the year. The supporting factors mainly come from two aspects: on the one hand, with the endogenous recovery of the economy, consumption gradually stabilizes, which constitutes the basic disk of growth; On the other hand, under the policy guarantee, the investment side continues to exert its strength. One is to issue additional government bonds to support infrastructure investment, and the other is to stabilize real estate investment in affordable housing in urban villages. At the same time, the recovery of exports has driven the manufacturing investment to remain stable.

　　Dong Qi, the macro chief analyst of Guotai Junan Research Institute, believes that it is expected that the economic growth rate will continue to recover in 2024, the rhythm will be high and then low, and the pattern of low inflation will continue. PPI will turn positive in the second quarter, exports will improve relatively, and consumption and investment will remain resilient.

　　According to CITIC Securities, the domestic macro-economy is expected to be steadily restored and its vitality will reappear in 2024. The vitality of domestic micro-subject economy will be restored with the weakening of the US dollar and the strengthening of policies, and the economy will gradually return to the potential medium and high-speed growth level. In 2024, the domestic GDP is expected to increase by 5.1%, which is structurally characterized by "old kinetic energy for stability and new kinetic energy for progress".

　　A shares are expected to usher in valuation repair

　　Since the beginning of this year, affected by multiple internal and external factors, the A-share market has fluctuated obviously. How will the A-share market be interpreted in the new year? Many institutions expect optimism.

　　Zhang Xia, chief analyst of China Merchants Securities Strategy, said that looking forward to next year, the revenue and profit growth of A-share listed companies is expected to maintain a slight upward trend. In terms of funds, the implementation of the previous capital market reform measures will effectively improve the supply and demand of funds, and it is expected that the incremental funds will turn to net inflows in 2024. With the end of the Fed’s interest rate hike cycle and the shift to interest rate cuts and table expansion, the liquidity of the US dollar is expected to improve significantly. It is expected that foreign capital will resume a small net inflow trend in 2024, which will have a positive impact on A shares.

　　"Overall, driven by the above factors, the A-share market will show a volatile upward trend, and the main broad-based index is expected to record a slight increase." Zhang Xia said.

　　Zheshang Securities believes that the state of China’s economic operation is a key factor for the judgment of the general trend in 2024. With the help of the auxiliary description of inventory cycle, combined with the forecast of investment, export and consumption, it is predicted that A shares will show a trend of shock recovery in 2024.

　　CITIC Securities predicts that, from the rhythm point of view, the A-share repair will be more flexible in the first half of 2024, and may fluctuate and differentiate in the second half. It is expected that the New Year’s Eve to the first quarter of next year will be an obvious window to boost market confidence, and the slope of A-share repair will be the largest. With the verification of domestic economic targets and the slope of restoration, the reform of the investment side of the capital market continues to take effect, and the market is expected to continue to repair in the second quarter of next year, and the slope tends to be flat. It is expected that the market structure may begin to differentiate after the A-share valuation has undergone three stages of repair in the second half of next year.

　　What investment opportunities are worthy of attention?

　　Since the beginning of this year, the rotation of A-share theme has been accelerated, and the configuration is more difficult. Which investment direction is worth paying attention to next year, the dominant value style or the dominant growth strategy? In terms of style judgment, brokers have their own opinions, but the pre-judgment growth style is dominant.

　　Caitong Securities believes that the A-share market style is expected to be relatively balanced next year, and the valuation is expected to pick up. It is recommended to pay attention to the Science and Technology 100 Index and the Entrepreneurship 200 Index. Judging from the comparison with the historical bottom area and the characteristics of institutional heavyweights, many indicators of current A shares are at the bottom. Consumption, TMT and many other segments are cost-effective, and next year’s profit and valuation are expected to be Shuang Sheng, and the market is expected to warm up. Combined with multiple factors such as profit margin improvement and policy drive, the growth style of A shares may be relatively dominant next year.

　　Zhang Xia is also optimistic about the performance of growth style next year. He said that under the trend of bottoming out of profits and declining yield of US bonds, A shares may turn to growth style. From the perspective of industry, it is suggested to pay attention to science and technology, medicine and some cyclical stocks, and pay attention to the new energy sector after the second quarter, based on the comprehensive judgment of macro environment, science and technology cycle, supply and demand pattern of production capacity, changes in core driving factors of industry prosperity and market performance in the past two years.

　　Huaan Securities judges that the growth of the A-share market and the market of the consumer sector will alternate next year. Growing the main line of science and technology or leading the annual market, the main line of consumption is expected to follow closely. When the overall growth style is dominant, industries such as electronics and communications are preferred. With the stabilization of the real estate industry and the significant upward consumption of services, the consumption style is expected to gradually dominate.

　　Fang Yi, chief strategist of Guotai Junan Research Institute, believes that the small-cap theme market may cool down in the first half of next year, and the stable style of the large-cap market is expected to prevail. Since the beginning of this year, investors’ risk appetite has tended to be at both ends: small-cap growth stocks have risen, while large-cap blue-chip stocks have fallen. It is expected that the market of small-cap theme stocks with high-risk characteristics may ebb in the next stage, and investment opportunities may turn to large-cap stocks with low-risk characteristics. It is suggested to pay attention to investment opportunities of fixed-income bonds and related products.