pokergameset| CITIC Prudential Fund Market Letter| Outlook for May market! Focus on investment opportunities in high dividend and resource sectors

When the market closed in April, the market as a whole showed a box shock pattern. For the May market interpretation, fund managers generally believe that the follow-up A-share index may maintain a narrow range of shocks, the need to seize structural opportunities. In terms of subdivision, it is boosted by the new "National Nine articles", dividend strategy and diffusion market may be worthy of continued attention, at the same time, the upstream resources sector is still worthy of attention.

Director of equity investment and fund manager: Wang Rui

Representative products: Citic Prudential innovation and growth mix, etc.

In terms of macro policy, US inflation data remain high, expectations of Fed interest rate cuts have been repeatedly postponed, geopolitical risks in the Middle East remain uncertain, commodities such as gold and crude oil soar, and global risky assets are under pressure. Domestic GDP grew by 5% in the first quarter.Pokergameset.3%, exceeding expectations, of which the contribution of industry and services is relatively large; the price factor is still weak, CPI is basically flat, and PPI has been declining for 18 consecutive months. In terms of the securities market, the new Nine articles is issued, which is good for the long-term structure of the capital market, and the short-term impact may mainly lie in the strengthening of regulatory policies (source: national Bureau of Statistics, time: April 16).

In terms of investment strategy, the current index has entered a narrow shock stage. On the one hand, due to the clearing of trading risk and the high margin of safety of the overall valuation, the downside risk of the index is relatively predictable. On the other hand, because the market is still worried about the impact of real estate on the short-term economy and there are no signs of easing in the overall market liquidity before the Fed cut interest rates, the driving force for a sharp upward index is not sufficient. NextPokergamesetWe will pay more attention to the landing of central budget projects and the implementation of policies such as equipment renewal and double control of energy consumption.

Director of Research Department, Fund Manager: Wu Hao

Representative products: Citic Prudential four Seasons Red mixture, etc.

On the macroeconomic front, the signal of domestic economic recovery is not clear. Domestic GDP grew 5.3% in the first quarter compared with the same period last year, 6.6% year-on-month, higher than the target of about 5%, which was consistent with the trend of PMI expansion. However, core inflation fell, social retail sales and fixed asset investment grew at an annualized rate of 1.2% and 3.7% respectively, which was still a combination of strong supply and weak demand. PPI still had negative inflationary pressure, and nominal GDP growth in the first quarter was only 4.2%. The quarterly adjustment of industrial value added in March is negative from the previous quarter, and the follow-up will focus on the month-on-month trend of economic indicators in the second quarter, as well as whether the Politburo meeting in April made targeted adjustments (data source: national Bureau of Statistics, time: April 16).

Corporate profits are still under pressure. The Quarterly reports of listed companies have basically completed the disclosure that the income growth rate is down from the previous month, and there is a high probability of negative profit growth in 2023. It is expected that the first quarterly report will affect the market consensus on profit growth in 2024, and the risk of further revision of profit forecasts is higher.

Pay attention to the dividend of contingent system reform. Compared with short-term financial expansion and risk prevention, individuals pay more attention to whether they can release institutional reform dividends to improve total factor productivity, and actively pay attention to the arrangements of the third Plenary session of the CPC Central Committee and the policy signals released; the CSRC reform norms, guide dividends, reduction behavior, is conducive to market pricing around the ability of enterprises to generate cash flow fluctuations, but the improvement of corporate cash flow still depends on the macroeconomic environment and meso-industrial environment.

After the market rebounded, there was adjustment and differentiation, and the assets with large gains in the previous period (AI, high dividends, resources, going to sea) have been significantly adjusted one after another. before substantial positive results are observed, we should still track market changes with the right side of thinking, do a good job in defense around high dividend assets, and strive to make a good timing counterattack in the troubled reverse assets.

Fund manager: Wu Yijing

Representative products: Citic Prudential Deep value mix (LOF), etc.

The macro economy bottomed out moderately, domestic GDP growth exceeded expectations in the first quarter, the Federal Reserve postponed interest rate cuts overseas, and US bond yields rebounded, but gold prices continued to rise under risk aversion. The A-share market as a whole may continue to fluctuate within a range, focusing on structural opportunities, first, dividend strategies and diffusion markets, and second, industries with positive changes on the demand side, such as export chains and upstream resource sectors that benefit from improved global manufacturing sentiment.

Deputy Director of Research Department, Fund Manager: sun Haozhong

Representative products: Citic Prudential emerging industry mix, etc.

Domestic GDP grew 5.3% in the first quarter compared with the same period last year, better than expected, but structural differentiation is obvious, real estate investment has not yet recovered, industry and service industry have improved, but the imbalance between demand and production still exists. It is expected that real estate investment may continue to be under pressure, residents' travel demand is strong, and service consumption may remain resilient. Exports, as the main driving force, may continue to support economic repair, and stable growth policies such as equipment upgrading and the implementation of financing coordination mechanisms will gradually boost demand. Hawkish comments from overseas Fed officials increased the likelihood that interest rates would not be cut or even raised during the year, with the dollar index rising slightly and non-US currencies under downward pressure.

On the whole, the A-share index may show high volatility, dividend assets may be boosted by the "National Nine articles", large market capitalization and high dividend assets may be dominant in the medium and long term, and pay more attention to growth assets that are relatively low in history in the medium and short term. others are relatively focused on limited resources, "low-end" manufacturing going out to sea, and electricity whose profits are expected to be repaired.

Fund manager: Lu Zhigang

Representative products: Citic Prudential Happy consumption mixture

Although some data in March were lower than expected, they were not pessimistic about the market. After the liquidity shock around February, the market has returned to the normal investment environment. However, in view of the stock market game, the structure and direction of the market are very important, and changes in the behavior of investors and the direction of capital allocation will lead to great differences in the rate of return of different combinations. However, judging from the market performance after the disclosure of the current annual and quarterly reports, the market is still effective in terms of fundamental changes driving share prices.

Fund manager: Wu Zhenhua

Representative products: Citic Prudential Dingli mixture (LOF)

At the macro level, the overall economy shows a weak recovery pattern in 2024. At present, the market has certain expectations for the repair of the domestic economy throughout the year. From the micro level, the pace of economic recovery is developing in turn. Looking forward to 2024, it may continue the pattern of weak economic recovery in 2023, and remain cautiously optimistic about growth assets in 2024.

Looking back, the points that need to be paid attention to are: (1) pay attention to the impact of domestic monetary policy on growth assets; (2) the catalysis of the industrial policy to be introduced by the government to the relevant listed companies and sectors; and (3) the annual report of listed companies in 2023 and the quarterly report in 2024.

From the perspective of the science and technology cycle, after a sharp decline and cycle decline in 2022, the overall plate is in a relatively low historical range. With the gradual economic recovery and the repair of downstream demand, it is expected to usher in an upward trend in the future.

Fund manager: Jiang Feng

Representative products: Citic Prudential Multi-Strategy Hybrid (LOF)

Over the past month or so, the market has been in the stage of consolidation and volatility. But in the long run, it is still in a relatively low range in history, and the overall valuation is also low.

Remain optimistic about the future, active capital markets, central leverage and other marginal changes to improve market risk preference, performance disclosure period, valuation switching window is conducive to the market to release positive sentiment. Remain optimistic about the market in May.

In the specific operation, it is mainly configured around the prosperity degree in some subdivided industries.

Fund manager: Guan Jiaqi

Representative products: Citic Prudential sincere mixture

At present, the dividend yield of many white horse consumer stocks in the market is generally at 3% Mur4%. At the same time, there is still room for improvement in the dividend rate. the difference in the market lies in whether the demand has hit bottom, if once the demand hits bottom, the current valuation superimposed dividend yield and the potential expectation of increasing dividends can be considered that consumption is already in a low range. The observation indicator is the real estate sales data, which may lead to an increase in market recognition of consumption once stabilized. Even at present, some high-quality white horse stocks already have a large performance-to-price ratio. Some companies' annual reports disclose that the dividend yield is 3% Mur4%, and there is a certain probability that the dividend will be eliminated in the next 1-2 months. In the current market style, the right of high-quality consumer companies or high-probability events. In the direction, before the real estate data stabilizes or sees other clear signals, we still focus on the direction of aging consumption, high dividend + and so on.

Fund manager: sun Huicheng

Representative works: newly selected mixture of Citic Prudential

The overall market in May is neutral and optimistic. After digesting the first quarterly report, the market is expected to select the main line for the whole year. Taking into account the large increases in early resource products, dividends, and the direction of going to sea, the second quarter is the off-season of the traditional economy, and will continue to focus on the upstream resource varieties with high dividends.

Note: the fund manager does not make any recommendation to the mentioned sector / asset class, does not represent any investment advice or recommendation, and does not represent the fund position information or trading direction.

Risk Tip: this material is for reference only, the above point of view is only the current point of view, does not represent the prediction of the future, does not constitute any investment advice, nor does it constitute the inevitable basis for investment decisions for Citic Prudential Fund products in the future. If it is no longer accurate or invalid due to changes in various factors after the release, Citic Prudential Fund shall not undertake the obligation to update. This material is not intended to provide financial information services or to constitute an offer, invitation or promotional material for the sale or purchase of any securities or financial products, nor is it investment advice or recommendations relating to any company, securities or financial products. The information in this material comes from the information that has been made public. Citic Prudential Fund does not guarantee the accuracy and completeness of this information. If this material reproduces a third party report or material, the reprinted content only represents the views of the third party and does not represent the position of CITIC Prudential Fund. This material may contain "forward-looking" information that is not based solely on past information, which may cover expectations and projections, but does not guarantee that any projections made will be realized. It is up to the reader to decide whether or not to rely on the information provided in this document. The copyright of this publication belongs to CITIC Prudential Fund. No one is allowed to publish or copy the contents of this publication without prior written authorization. If quoted or published, the source should be indicated as "CITIC Prudential Fund", and no deletion or amendment may be made to any content in this publication contrary to the original intention. The fund manager reminds you of the "buyer's responsibility" principle of fund investment. After making the investment decision, the investor bears the risk and consequence of any investment behavior due to the investment risk caused by the change of fund operation and fund net worth. The past performance of the fund does not represent the future, and the performance of other funds does not constitute a guarantee of fund performance. Fund managers promise to manage and use fund assets in the principle of good faith and diligence, but the fund does not guarantee a certain profit, nor does it guarantee the minimum return and principal safety. Please read the prospectus, summary of product information and fund contracts and other legal documents carefully before investing. There are risks in investment, so you need to choose carefully.

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