South ** investment strategy next year: industry preferred construction machinery

The South Fund officially released the 2011 A-share investment strategy report. The report believes that the A-share market in 2011 is likely to continue its upward trend under the leadership of the Baima Group, and the construction machinery sector with low valuation and growth will be the first choice for investment allocation.

According to the report, after rebounding from the bottom of 2319, the market oscillated upward with liquidity, broke through the important 3,000-point mark, and reached a maximum of 3186 points. It then fell rapidly under the pressure of high inflation, raising interest rates, and raising the deposit reserve ratio. The market ushered in mid-term adjustments. In terms of valuation, the current price-earnings ratios of the Shanghai and Shenzhen 300 valuations in 2010 and 2011 were 15 and 12 times respectively, and the corresponding profit growth rates were 33% and 21%, respectively, which are still at the bottom of the historical valuation. In the short term, the market expectation of negative policies has been reflected, and it is unlikely that major adjustments will continue. Current domestic and foreign economic fundamentals and external financial market stability will continue to support A shares. Although it is unlikely that the pessimistic mood will be completely eliminated in the off-season economic data, the characteristics of the market's structural market will remain clear.

In the specific industry configuration, the South Fund believes that the next year will continue the upward trend of shocks, the industry will accelerate the speed of rotation, the importance of industry configuration has increased significantly. The key configuration directions in 2011 are: 1. Advanced manufacturing with low valuation and growth identified as construction machinery; 2. Inflation benefit segment not subject to national price control; 3. First-line liquor benefiting from consumption upgrade and income increase , brand clothing, etc.; 4. Appropriate allocation of insurance, banking, commercial real estate and other medium and long-term investment value highlights the weight plate.

Regarding the theme of investment, the report pointed out that 2011 is the first year of the “Twelfth Five-Year Plan”. The full implementation of the “Twelfth Five-Year Plan” and the continuous advancement of urbanization are the two major driving forces for the sustained growth of China’s economy in the next five years. The 12th Five-Year Plan emphasizes the need to vigorously develop the seven major emerging industries. The new economy will remain an important direction for the theme of investment in 2011. Emerging industry investment focuses on strategic emerging industries, including high-end equipment manufacturing, new-generation information technology, new energy, and new materials, as well as equipment investment in energy-saving and environmental protection industries.