【A50 Weekly Report】

　　Opinion:

　　Abroad: The global epidemic has dropped sharply + the Fed s interest rate hike expectations have declined slightly + geopolitics has heated up . (1) Global epidemic situation: In the third week of February, the epidemic situation in European and American countries continued to ease, but the number of newly diagnosed cases in Southeast Asian countries increased rapidly. As of February 18, the United States (-42%), France (-43%), Italy (-30%), Spain (-44%), the United Kingdom (-27%), India (-58%) newly diagnosed MA7 continued to fall sharply from a week ago; however, ASEAN countries such as Indonesia, Malaysia, and Thailand grew rapidly, and ASEAN as a whole saw a weekly increase of +46% in newly diagnosed cases. The number of new crown hospitalizations in the United States (-25,000, 69,000) and severe cases (-4,500, 14,000) fell sharply in one week (in order of one-week decline, the latest number of hospitalized/severe cases). (2) Monetary policy: Fears of Fed tightening eased marginally last week, mainly because the minutes of the FOMC meeting did not show more “surprisingly hawkish” information, and many Fed officials expressed interest in raising interest rates by 50% in March. The position of the basis point is relatively more cautious. (3) Affected by the escalation of the situation in Ukraine, the market risk appetite is relatively sluggish .

　　Domestic: With the support of steady growth + the policy of East and West, traditional infrastructure and new infrastructure continued to perform well. (1 ) Macro liquidity: Steady growth continues to exert efforts. For example, social financing data in January improved, some cities lowered the down payment ratio for the first home, and expected a more proactive fiscal policy. The main line of stable growth continued to be played, such as coal and other raw materials leading the rise The market and 10-year Chinese government bond yields recovered to 2.8%, recovering almost all of their losses since early January. ( 2 ) Funding: net outflow of northbound funds, sluggish issuance of public funds, and net inflow of leveraged funds. Market incremental funds are limited. (3 ) Policies: The National Development and Reform Commission and other departments have launched four major policies to implement the requirements of the 2022.2.16 regular meeting, covering aspects such as stable industrial growth, consumption relief, entrepreneurship-driven employment, and digital infrastructure.

　　In terms of A50, it is currently in a period of grinding bottom. Domestically, the continuous introduction of stable growth policies has certain support for A50 ; overseas, the Fed's tightening expectations are less than expected, but the situation in Ukraine has escalated and the market has been sluggish. At present, the A-share market is still undergoing high-low switching, focusing on opportunities in low-valued sectors such as infrastructure and finance. From the perspective of valuation , the A50 price-earnings ratio PE and price -book ratio PB are near the average. From a technical point of view, A50 is currently at an important support level, and it is expected to stabilize and rise at the 15000 support level. However, from the seasonal analysis of the index, the probability of a sharp rise after the Spring Festival is not high. Therefore, in the short term, the index may fluctuate at the bottom. In operation, it is recommended to sell high and buy low.

　　Figure 1 List of stock indexes ups anddowns since the beginning of the year

　　Data source: HGNH International, wind

　　1、technical analysis

　　From the technical analysis point of view, A50 is at the monthly support level, which is the previous high point. We will pay attention to whether this point can rebound. Support point: 1 5000. If there is no breakout at 15000, A 50 will likely bottom out and rebound.

　　Figure 2 FTSE China A50 trend

　　Data source : Henghua International , wind

　　2、plate trend

　　Figure 3 Trends of the three major sectors of the FTSE China A50 Index

　　Data source: Henghua International, wind

　　Last week, the A50 was in a bottoming period, and the three major sectors were mixed , with the A50 futures 2 202 contract up 0.24 %.

　　Banking and non-banking financial sectors are in a depression in valuation and have little room to fall, while food and beverages have no chance of continuing to fall due to the sharp pullback and seasonal effects of last year. The A 50 index is likely to bottom out and rebound.

　　3、Funding

　　In terms of public offerings, compared with last week, the position of stock funds decreased, and the shares of newly established stock-oriented funds decreased; compared with last week, northbound funds saw a net outflow of land-based stocks, and the trading activity decreased; compared with last week, leveraged funds, The scale of the balance of financing and financing increased, and the transaction activity increased; the transaction activity of industrial capital and industrial capital decreased, and the net increase in holdings of construction materials and steel was the top.

　　4、Index Valuation

　　In the past five years , the average value of PE is 13.9 times , and the average value of PB is 1.95 times . But since 2019 , its valuation has rebounded from a low level and has risen all the way . The current PE is 15.07 times , which is near the average; 2.14 times PB , which is near the 6 -year average . Compared with the Shanghai Stock Exchange 50 and the CSI 300 Index, the ROE of the A50's return on equity is larger, and the current value is 14.3 .

　　Calculation formula : price-earnings ratio PE (TTM) = 1/SUM (Wi/PEi), price -to-book ratio PB (TTM) = 1/SUM (Wi/PBi) , return on equity ROE = PB/PE .

　　Figure 4 PE of each index from 2015 to present

　　Data source: Henghua International, wind

　　Figure 5 A50 PE ratio

　　Data source : Henghua International , wind

　　Figure 6 A50 P/B PB

　　Data source : Henghua International , wind

　　Figure 7 A50 ROE

　　Data source : Henghua International , wind

　　5、Spread Analysis

　　Monthly spread: Last week, the upper and lower bounds of the Bollinger Band of A 50-month spread: [ -42,9], it is suggested that the spread can break through this range for arbitrage.

　　Figure 8 A50 Basis Chart

　　Data source : Henghua International , wind

　　Figure 9 A50 basis chart (five months data)

　　Data source : Henghua International , wind

　　Figure 10 A50 month-to-month spread

　　Data source : Henghua International , wind

　　Figure 11 Application of Bollinger Bands in monthly spreads

　　Data source : Henghua International , wind

　　6、Trading straregy

　　Unilateral strategy: As for the A50, it is currently in a period of grinding down. Domestically, the continuous introduction of stable growth policies will support the A50 to a certain extent ; overseas, the Fed's tightening expectations are less than expected, but the situation in Ukraine has escalated and the market has been sluggish. . At present, the A-share market is still undergoing high-low switching, focusing on opportunities in low-valued sectors such as infrastructure and finance. From the perspective of valuation , the A50 price-earnings ratio PE and price -book ratio PB are near the average. From a technical point of view, A50 is currently at an important support level, and it is expected to stabilize and rise at the 15000 support level. However, from the seasonal analysis of the index, the probability of a sharp rise after the Spring Festival is not high. Therefore, in the short term, the index may fluctuate at the bottom. In operation, it is recommended to sell high and buy low.

　　Inter-month arbitrage: Last week, the upper and lower bounds of the Bollinger Band of the A 50-month spread: [ -41,12], it is suggested that the spread can break through this range for arbitrage.

　　7、Focus of the week

　　Figure 12 Follow this week

　　Data source : Henghua International , wind

　　8、Risk warning

　　(1) The easing of domestic policies is less than expected; (2) The overseas new crown epidemic is out of control; (3) The upward pressure on inflation is increasing; (4) The yields of government bonds of major overseas countries are rising too fast.