Since this year, the value blue chip sector has experienced a rare sharp decline, the non bank financial index has fallen by more than 20%, the indexes of real estate, household appliances, food and beverage and other sectors have fallen by more than 10%, and the bank index has fallen by more than 7%. The cyclical characteristics of the A-share market are more obvious. If you fall more, you will rebound, and if you rise more, you will adjust. In early trading today, some of the above sectors rose significantly, with the insurance index and real estate index rising by more than 1%.
Undervaluation may also be an important factor in the rebound of these plates. As of yesterday’s closing, the price to book ratio of the real estate sector was 0.86 times and the price to book ratio of the insurance sector was 1.26 times, both ranking among the lowest in the industry.
Real estate leader
Shareholders can’t see such an undervaluation. Poly Real Estate announced yesterday evening that Poly Group, the actual controller of the company, increased its holdings of 500000 shares of the company on August 4, accounting for about 0.0042% of the total share capital of the company. Poly Group plans to continue to increase its holdings in the next 6 months, with the cumulative increase ratio of no less than 0.0042% and no more than 2% of the total share capital of the company (including the increased shares this time). The company announced on the same day that the chairman, general manager Liu Ping and all senior managers of the company plan to increase their holdings of shares in the company in the next six months, with a total increase of no less than 8 million yuan and no more than 15 million yuan, and the increase price of no more than 15.06 yuan / share.
Under the influence of the above news, Poly Real Estate opened sharply higher this morning, with an intraday rise of more than 8%. As of the morning closing, the stock closed at 10.51 yuan, up 5.21%. Real estate leaders rose collectively, Jindi group and Nanguo real estate rose by more than 4%, Jinke shares, Rongsheng development and other stocks rose by more than 3%, and China Merchants Shekou, Vanke A, Oct A and Xincheng holdings rose by more than 2%.
Value blue chip bottom show?
It is worth mentioning that, compared with history, the actual controller and senior management team of Poly Real estate also increased their holdings of the company’s shares in 2008, 2014 and 2015 respectively. In these periods, the company’s valuation was low and the share price was relatively low. Some people believe that this may be one of the signs of the bottom of value blue chip.
CSC believes that the style drift of small cap and growth is coming to an end, and will return to the market to outperform small cap in the next year. It is suggested to focus on finance and cycle. Its core logic is that the A-share value growth deviation index has reached a record high, indicating that the current market is extremely fragmented. Historically, after the A-share value growth deviation index reaches the warning line of 10, there is often a wave of medium-term decline in growth.
Pacific Securities bluntly said that the “policy bottom” of undervalued blue chips has appeared! Last week, two events decided the turning point: one was the article of Xinhua News Agency on platform economy and after-school training institutions, and the other was the “7.30” Politburo meeting. The core of these changes is to begin to pay attention to the issue of “stable growth” in an all-round way, rather than just focusing on the long-term ideal goal. For the “undervalued value”, this is actually the “policy bottom”.
Reprint indicated source：Shine Trader Limited Live information