Newsletter summary

The issuance scale of Q1 fund in 2024 decreased by 41% compared with the same period last year.Segarallyarcademachine.5%, the position of the consumer sector has increased, and leading enterprises such as Guizhou Moutai and Wuliangye are favored. The decline in CPI shows that demand has yet to recover and the home appliance sector has benefited. Consumer sector valuations are still low, fund managers prefer absolute leaders, it is recommended to focus on good growth tracks and low-valued dividend assets.

Text of news flash

[the scale of fund issuance declined in the first quarter of 2024, and the consumer sector performed brightly] in the first quarter of 2024, the issuance scale of China's fund market fell, but the consumer sector stood out. The overall share of new issuance of the fund in the quarter was 50.138 billion, down 41.5 per cent from the same period in 2023 and 17.2 per cent from the fourth quarter of last year. At the same time, the Shanghai Composite Index fell to 2635 points from 2974 points at the end of the year, before rebounding. In the consumer sector, funds put forward higher requirements for the profitability of companies. Take the liquor sector as an example, the funds are further concentrated to the national leading enterprises Guizhou Moutai (600519) and Wuliangye (000858), while the positions of other liquor companies generally decline or increase by a small extent. At the same time, companies with high dividend yields attracted attention, and the positions of the White Power sector increased significantly, especially Midea (000333) became the largest consumer sector stock with the largest increase in positions in the first quarter. [core CPI declines, consumer demand needs to be restored] from a fundamental point of view, CPI rose 0.1% year on year in March 2024, down 0.6% from the previous month; core CPI rose 0.6% year on year, also down 0.6% from last month. CPI and core CPI remained at historically low levels in the first quarter of 2024, reflecting that domestic consumer demand is still weak and needs further recovery. [leading rate of return on assets with high dividend] from the perspective of yield, household appliances, textile clothing, and food and beverages have performed better in the consumer primary industry so far this year, which are + 10.0%,-0.9%, and-5.3%, respectively. The high dividend assets represented by household appliances have significantly outperformed and continued.SegarallyarcademachineThe trend of undervaluation dominance since 2021 is discussed. [consumer sector valuations begin to rise] in terms of valuations, consumer sector valuations begin to rise, but are still at historic lows. The CSI consumer index PE rose from 26.8 at the end of 2023 to 28.1 at the end of March 2024, while the CSI optional consumer index PE rose from 16.4 at the end of 2023 to 16.8 at the end of March 2024. [home appliance sector position significantly increased] in the overall position of large consumption, the overall position proportion of large consumption industry was 23.8% in the first quarter of 2024, up 1.3% from the previous quarter, slightly higher than the historical average. In the first-tier consumer industry positions, agriculture, forestry, animal husbandry and fishing and social services sector significantly declined, while the home appliance sector benefited from low valuation and dividend attributes, the position increased most obviously. [the top 10 consumer heavy positions rose moderately] the proportion of the top 10 consumer heavy positions in the first quarter of 2024 was 15.5%, up 0.6% from the previous quarter. In the context of the overall decline in market earnings expectations, the scarcity of companies with excellent profitability is more obvious, and the fund will gradually concentrate its positions on some high-quality companies. [future view of fund managers] Fund managers have reduced differences between future expectations and fundamental performance of the consumer sector, and have a high consensus on the pace of recovery of consumer demand. They have further improved their positions in absolute leading companies with excellent business models and clear patterns, especially in the national leader of spirits. At the same time, the dividend attribute asset attention increased, especially the white power leading position increased significantly. [investment advice] it is recommended to focus on tracks that benefit from demographic changes and where the industry as a whole still has a growth advantage, such as coffee and health products. At the same time, focus on companies with a strong moat and solid competition, such as high-end spirits. In addition, the targets with low valuation and dividend advantage, such as the leading companies with high dividends and stable performance in the home appliance sector, are also worthy of attention. [risk Tip] it should be noted that sample statistical deviations and market volatility risks may have an impact on investor decisions.