(Original title: The resilience of A-shares is fully demonstrated! These sectors have become anti-fall heroes, and institutions are optimistic: you can buy after a major adjustment (with opinions))

Although the U.S. stock market plummeted last Friday and the United States escalated trade frictions, there were also a lot of good news over the weekend. The A-share market opened lower and moved higher today, and it is expected to usher in the "Independence Day" market again!

In early trading today, under the influence of multiple news from last weekend, A-shares opened lower and moved higher, with a sharp increase in trading volume, indicating that funds were eager to hunt for the bottom in the market. On the market, gold stocks, spin-off concept stocks, seed industry and other sectors bucked the market trend and strengthened. A-shares may be expected to usher in Independence Day prices again.

Last weekend, the global market continued to be turbulent, and the Sino-US trade war escalated. China imposed tariffs on approximately US$75 billion of US goods. Subsequently, the US announced that it would increase tariffs on approximately US$550 billion of Chinese exports to the US. On the 24th, China responded strongly. The United States has seriously undermined the multilateral trading system and the normal international trade order and will surely reap the consequences.

The trade friction between China and the United States has recurred again, causing U.S. stocks to plummet, falling more than 600 points by the close. Investors were pessimistic about the future trend of A-shares, and Singapore A50 stock index futures fell by more than 2%. However, according to statistics, after the past 13 U.S. stock market crashes, the Shanghai Composite Index fell 7 times on the next trading day, but the decline was basically smaller than the Dow Jones Industrial Average's fall, and only one fell more than the Dow Jones Industrial Average. There were six other times when the Shanghai Composite Index rose instead of falling. The most recent one was on the evening of August 14th, when the Dow Jones Industrial Average plummeted 800 points. However, on August 15th, A-shares turned red strongly. The largest increase occurred on January 4 this year. After the Dow Jones Industrial Average plummeted 660 points on January 3, the Shanghai Composite Index opened lower and moved higher with a strong increase of more than 2%, starting a rebound in the first quarter.

Good things happen frequently

There was more good news over the weekend. In the early morning of August 24, FTSE Russell announced that it would increase the inclusion factor of China A shares from 5% to 15%. This time, 87 Chinese A-shares were newly included, including a total of large-cap A-shares.14, 15 mid-cap A shares, 50 small-cap A shares, and 8 micro-cap A shares. According to official calculations by FTSE Russell, this expansion will bring $4 billion in passive capital inflows to A-shares.

In addition, on August 25, the relevant person in charge of the China Securities Regulatory Commission held a meeting to discuss and refine the overall plan for capital market reform. The plan has basically taken shape! The A-share market is about to receive a series of benefits in terms of a series of basic system reforms, legal protection, quality of listed companies, and long-term capital entry into the market.

The China Securities Regulatory Commission stated that the general idea of ​​this reform is closely centered on "building a standardized, transparent, open, dynamic and resilient capital market", using the establishment of the Science and Technology Innovation Board and the pilot registration system as a breakthrough to optimize capital market supply, promote key institutional innovation, and implement financial supply-side structural reforms with practical measures.

On the 23rd, the China Securities Regulatory Commission issued the "Several Provisions on the Pilot List of Domestic Listing of Listed Companies' Split-Off Subsidiaries". "Spin-off" refers to a listed company's IPO or restructuring and listing on the domestic securities market in the form of a subsidiary that directly or indirectly controls part of its business or assets. There has never been a real spin-off subsidiary of a listed company listed on the A-share market before, and this regulation fills this institutional gap.

GF Strategy believes that the Science and Technology Innovation Board's permission to spin off and superimpose the reform of state-owned enterprises is the main reason for the advancement of the spin-off system. In the future, the number of A-share (especially profitable and dominant state-owned enterprises) spin-offs and listings on the Science and Technology Innovation Board will continue to increase. On the one hand, although the profit expectations of the parent company may be diluted in the short term, in the medium and long term, the parent company is expected to obtain asset premiums, enhance financing capabilities, and thus enhance the overall valuation; on the other hand, spinning off subsidiaries means that private capital can take control, and the mixed reform of state-owned enterprises will increase.

Gold concept stocks surge

Stimulated by the news, the market's risk aversion sentiment increased, and international gold prices rose sharply again. As of press time, the main contract of COMEX gold futures in New York has risen again by 1.09% on the basis of the 1.91% surge last Friday, reaching a maximum of $1,565 per ounce, setting a new high in more than 6 years. The main gold futures contract on the Shanghai Futures Exchange opened higher and moved higher, rising 3.84%, a new high in the past seven years. The main silver futures contract also rose 4.56%, a new high in the past three years.

The strength of gold prices has driven the overall strength of gold concept stocks. In early trading, the gold concept index jumped sharply and opened higher by 3.72%. 30 of the 38 gold stocks bucked the trend and rose. Shandong Gold, Shengda Mining, and Western Gold rose by more than 6%, leading the gold stocks.

CITIC Construction Investment said that sentiment in the gold market continues to be high, with ETFs adding another 16.42 tons this week and total COMEX gold holdings continuing to increase to nearly 1.19 million lots, setting another record high. RMB fromThe offshore exchange rate fell slightly, further boosting the popularity of RMB gold prices. The Federal Reserve is likely to continue to cut interest rates, global uncertainty is intensifying, and the price of gold is pointing at $1,600.

It is recommended to continue to increase holdings of gold stocks, with emphasis on Shandong Gold, Yintai Resources, Shengda Mining and Zijin Mining. After gold has been rising for some time, second-tier gold stocks such as CICC Gold are also worthy of attention.

Zhongtai Securities stated that the chip distribution of gold stocks has two low characteristics, namely, a low proportion of public fund holdings and a low proportion of northbound funds holdings. The U.S. economy is currently in an accelerated downturn, the Federal Reserve will enter an interest rate cut cycle, and gold is in the first stage of rising. At the same time, gold stocks are relatively dispersed and the allocation ratio is also low (0.8% currently vs. 2% historical high). From this perspective, gold investment has not been overheated, and the value of the gold sector allocation has not diminished.

The concept of spin-off listing is popular

Last weekend, the China Securities Regulatory Commission drafted "Several Provisions on the Pilot Listing of Domestic Listing of Subsidiaries of Listed Companies" and began soliciting opinions from the public on the 23rd. It clarified the conditions for the spin-off pilot, standardized the spin-off and listing process, and strengthened the supervision of spin-off and listing behaviors.

When a listed company is spun off and listed, some of the assets being spun off will be revalued. Based on the current IPO P/E ratio of about 22 times on the main board and about 50 times on the Science and Technology Innovation Board, this part of the spin-off listed assets will receive a huge premium, thereby driving up the value of the parent company. At present, nine listed companies have made it clear that they are "preparing" or "intending" to spin off their subsidiaries and list them on the Science and Technology Innovation Board. They are: Donggang Co., Ltd., Western Materials, Lingnan Co., Ltd., Jingu Co., Ltd., Shenzhen Konka A, Shanghai Electric, Lifan Co., Ltd., Lepu Medical and Infore Environment.

Stimulated by this news, in early trading today, listed companies that meet the conditions for spin-off bucked the market trend and were sought after by funds. Jingu Shares and Shenzhen Konka A opened at the daily limit, while Western Materials, Lingnan Shares, and Donggang Shares all rose sharply.

CITIC Securities said that after sorting out all A-share companies, it was found that 17.7% of the listed companies met the basic financial requirements of the "Draft for Comments". The financial threshold is low, and horizontal competition is still the main obstacle. It is expected that the direct beneficiaries will be subsidiaries with new businesses cultivated by traditional listed companies. The real estate and pharmaceutical industries have the largest number of listed companies that meet the requirements, accounting for 3.6% of all A-shares.

Lianxun Securities recommends focusing on two main lines. One is the "PE incubator model": that is, listed companies obtain controlling rights in subsidiaries through PE investment. Focus on companies with larger industrial funds and wider layouts before listed companies; secondly, the subsidiaries of listed companies meet the listing standards, especially companies whose departments under large groups belong to "differentiated business models", which are more likely to be recognized and sought after by the market. This includes subsidiaries of listed companies that have been split into Hong Kong stocks or listed on the New Third Board (including delisted). This type of company has early advantages such as completed shareholding reform and complete financial data, and is easy to attract investors' attention early.

In addition, affected by China's additional tariffs on U.S. auto parts, auto parts concept stocks strengthened in early trading. Huapei Power and Shuanglin both pulled straight to the daily limit within 5 minutes of opening. Quanfeng Automobile, Dickson Power, Xinrui Technology, Zhejiang Shibao, etc. were among the top gainers. Rare earth permanent magnet concept stocks are also relatively strong. Dehong shares hit the daily limit at the opening, and Jinli Permanent Magnet also once againAt the daily limit, Galaxy Magnet, Minmetals Rare Earth, Yingluohua, etc. were among the top gainers.

Institutions are firmly optimistic about the market outlook in the long term

Everbright Securities: There is no need to worry about foreign troubles, and you can buy it after a major adjustment.

Everbright Securities believes that after China took countermeasures against the United States on Friday and imposed tariffs on $75 billion of imported goods, Trump retaliated by raising the tariff rate on about $550 billion of Chinese exports to the United States by 5%. This, combined with the sharp drop in U.S. stocks on Friday, may once again impact market sentiment. The countermeasures against China should not be surprising. Previous actions have proved the symmetry of the trade friction between the two sides, and the signal of "struggle for unity" is clear. For A-shares, there may be fluctuations in the short term, but from the perspective of the policy and economic cycle, we believe that foreign troubles are not a concern, and you can buy them after a major adjustment.

Industrial Securities: "Extreme pressure" destroyed U.S. stocks and hurt Hong Kong stocks, and A-shares repeatedly built a "golden pit" at the bottom.

Industrial Securities said that looking forward to the future trend of A-shares: 1) In the short-term "storm", A-shares have relative gains compared to US and Hong Kong stocks: the Sino-US trade war escalates, and US stocks will replicate the risk of stampedes in October and November last year; the Hong Kong stock market is getting worse and continues to be "whipped"; the short-term adjustment of the A-share market has created a "golden pit". 2) In the long term, China's core assets are already in a "golden pit" with prominent allocation value. As global risk-free returns decline, the price/performance ratio will become higher.

CITIC Construction Investment: The Chinese stock market is in its most difficult time, which is the beginning of a long-term bull market.

CITIC Construction Investment believes that in the medium to long term, the Chinese stock market is at its most difficult, which is the beginning of a long-term bull market. In the short term, the market will be blunted towards the Sino-US trade conflict, and the duration of short-term disturbances will be shortened and the magnitude will be smaller. We recommend that investors grasp the mid- to long-term market trends and not be overly pessimistic about trade conflicts. In the short term, attention is paid to the import substitution opportunities brought about by the Sino-US trade conflict. Agricultural products, chemicals and automobile products are good for the short term, and the safe-haven value of gold is also highlighted. In the medium to long term, core technology and consumption will become long-term opportunities for the Chinese market, and investors are advised to stick to them.

China Merchants Securities: Bearish on external impacts and focus on looking for prosperous sectors.

China Merchants Securities stated that since the United States announced a US$50 billion tariff list in June last year, global trade frictions have been escalating, which has caused harm to the import and export of various countries and has also caused great disturbance to the stock market. However, there are still some industries in A-shares that have performed well, such as consumer staples (food and beverages, agriculture, forestry, animal husbandry and fishery), large finance (banks and non-bank finance), military industry and computers. Industries with strong performance guarantees have all achieved positive returns. While global trade frictions are escalating, A-share investors are gradually adapting to the disturbances from outside the market, and panic has weakened significantly compared to the early stages of the trade dispute; as trade frictions between China and the United States resumed this weekend, the market's "immunity" to repeated tariffs has been relatively strengthened; despite the short-term impact of trade frictions, it does not prevent areas with strong performance certainty and rising industry prosperity from still being favored by funds. Therefore, when trade frictions may intensify or the pressure of RMB depreciation still exists, it is recommended to pay attention to industries that have shown a clear upward trend in prosperity and have strong performance certainty, such as photovoltaics, communication equipment/communication infrastructure, semiconductors, oil service equipment, consumer electronics, military industry, cloud computing, securities dealers, financial IT and other industries.Sub-areas.

Galaxy Securities: Internal policies promote reform and the backing force is strong.

Fu Yanping, a strategy analyst at Galaxy Securities, pointed out that external shocks such as the recurrence of the Sino-US trade war and the market's concerns about the uncertainty of the Federal Reserve policy have put short-term pressure on the stock market. However, internal policies promote reform and have strong support. The central bank's reform of the LPR formation mechanism will help push the risk-free interest rate downward, and policy countercyclical controls may further increase in the future. At the same time, MSCI’s expansion decision will officially take effect on August 27. FTSE Russell also announced the latest expansion decision, and overseas incremental funds continue to enter the market. It is recommended to optimize the asset allocation structure and pay attention to demining. On the one hand, core assets are selected, and on the other hand, false growth is eliminated.