Ping An Securities: The differentiation of dividend style will continue under the differentiation of industry fundamentals and profit expectations

According to the information from Zhitong Finance and Economics APP, Ping An Securities released a research report stating that in the current A-share market where the overall valuation level is still at a historically low level, it is worth seizing the medium-term structural opportunities in the market. Structurally, the differentiation of dividend style will continue under the differentiation of industry fundamentals and profit expectations. In the short term, it is recommended to seize the landing of interim report expectations. In the medium term, it is recommended to continue to layout along the direction of reform policies, with the growth style gathering momentum; it is recommended to seize investment opportunities related to new quality productivity, high-end manufacturing, and SOE reform. Key Points from Ping An Securities Last week, the A-share market showed a rebound with differentiation, with dividends more advantageous. Last week, the Shanghai Composite Index rose by 0.6%. The performance of the overall market dividends was relatively advantageous, with the Shanghai Dividend Index and the CSI Dividend Index rising by 1.64% and 1.16% respectively, and the SSE 50 Index rising by 1.17%; while the STAR 50, ChiNext Index, and CSI 1000 Index adjusted by 0%-2%. The average daily turnover of the entire A-share market fell to 529.4 billion yuan; the northbound funds continued to have a net outflow of 5.04 billion yuan; the total net inflow of stock ETFs for the week was 22.81 billion yuan. In terms of industries, the banking, communication, coal, media, and non-banking financial industries performed well. Domestically, in July, demand stabilized and physical credit and production remained weak. From a fundamental perspective, in July, social retail sales increased by 2.7% year-on-year, compared to 2.0% previously, and retail sales of goods showed some signs of recovery; the value-added of industrial enterprises above designated size increased by 5.1% year-on-year in July, compared to 5.3% previously, with an expected value of 5.0%; from January to July, fixed asset investment increased by 3.6% year-on-year, with previous and expected values of 3.9%, among which infrastructure investment increased by 0.4 percentage points to 8.1%, manufacturing investment decreased by 0.2 percentage points to 9.3% from the previous month, real estate investment continued its deep adjustment, recording -10.2%. In addition, financial data showed that physical credit remained weak, with new social financing in July reaching 772.4 billion yuan, an increase of 235.8 billion yuan year-on-year, with government bonds as the main support; financial institutions' new RMB loans in July were 260 billion yuan, a decrease of 85.9 billion yuan year-on-year, with long-term loans to residents increasing by 77.2 billion yuan year-on-year, while long-term loans to enterprises decreased by 141.2 billion yuan year-on-year; the M2-M1 scissor difference expanded to 12.9% in July. On the policy front, first, the policy of replacing old with new continues to be strengthened. On August 16, the Ministry of Commerce and seven other departments increased the subsidy standards for scrapping and updating, raising the subsidy for purchasing new energy passenger vehicles from the original 10,000 yuan to 20,000 yuan, and the subsidy for purchasing fuel passenger vehicles from 7,000 yuan to 15,000 yuan. Second, the threshold for offline subscription of the Sci-Tech Innovation Board has been raised. On August 16, the Shanghai Stock Exchange increased the holding market value requirement for investors participating in the offline issuance of the Sci-Tech Innovation Board to over 6 million yuan, which will be implemented from October 1. Internationally, some economic data in the United States show resilience, and recession expectations have eased. From a fundamental perspective, in the United States, the CPI in July increased by 2.9% year-on-year, compared to 3.0% previously; on a month-on-month basis, it rebounded from -0.1% to 0.2%. The core CPI in July increased by 3.2% year-on-year, compared to 3.3% previously; with a month-on-month increase of 0.2%, compared to 0.1% previously. The core PPI in July increased by 2.4% year-on-year, compared to 3.1% previously; with no change on a month-on-month basis, compared to 0.3% previously. Core retail sales in July increased by 3.1% year-on-year, compared to 3.3% previously; with a month-on-month increase of 0.4%, compared to 0.5% previously In the United States, the initial jobless claims last week were 227,000, down from the previous value of 234,000 and slightly below the expected value of 232,000. In terms of liquidity, the Reserve Bank of New Zealand cut interest rates by 25 basis points, reducing the benchmark interest rate from 5.5% to 5.25%. Additionally, with some improvement in certain economic data in the United States, market concerns about a recession have eased. Looking at the overall week, the 10-year US Treasury yield fell to 3.9%, the US dollar index dropped to 102.4, and the three major US stock indices rose by 2%-6%. In terms of exchange rates, the USD to offshore RMB rate closed at 7.16. In the commodity market, amid supply disruptions and improved macro sentiment, LME copper rose by 3.5% for the week, while COMEX gold also increased by 2.9%. Overall, the overseas recession trade has eased, with expectations for a September rate cut by the Federal Reserve remaining consistent. Domestically, the focus on deepening reforms is clear, with policy efforts accelerating the development of new quality productivity and gradually increasing domestic demand policies. Given that the overall valuation of A-shares is still at historically low levels, there are structural opportunities worth seizing in the market medium-term. Structurally, the dividend style differentiation will continue under the differentiation of industry fundamentals and profit expectations. In the short term, it is advisable to capitalize on the landing of interim report expectations. In the medium term, it is recommended to continue positioning along the direction of reform policies, with growth styles gathering momentum; it is advised to seize investment opportunities in new quality productivity (TMT/defense industry/machinery and equipment, etc.), high-end manufacturing, and state-owned enterprise reform-related sectors . Risk Warning: 1) Macroeconomic recovery falls short of expectations; 2) Monetary policy tightens more than expected; 3) Increased volatility in overseas capital markets