Today, A-shares officially came to an end with a performance of recovering 3,000 points. GLONGHUI's 2024 “Global Vision · Betting on China” top ten core ETF portfolio earnings were freshly released.The overall yield reached 10.48% in February, outperforming the Shanghai and Shenzhen 300 Index by 1.13%.

February was definitely a time for Hong Kong A-shares to raise their eyebrows and take first place in the global stock market. Among them, the Science and Technology Innovation 100 Index had the best performance in the world, surging 16.09% in February, followed by the GEM index, which had a cumulative increase of 14.85% in February. The Shenzhen Index, the Shanghai and Shenzhen 300, and the Shanghai Composite Index rose 13.61%, 9.35%, and 8.13% respectively in February.

The performance of the Hong Kong stock market was also good. The Hang Seng Technology Index rebounded even more strongly in February. The cumulative increase in February was 14.16%.

US stocks performed moderately in February, and the NASDAQ index rose 5.17% cumulatively in February.

Judging from industry performance, A-shares performed best in February in the technology sector. The monthly gains of communications, computers, electronics, and media were 19.52%, 17.78%, 16.44%, and 14.82%, respectively.

These major industries are the Sci-Tech Innovation 100 ETF Huaxia (588800) heavy inventory industries, so the ETF surged 15.97% cumulatively in February.

1. Science Innovation 100 ETF Huaxia soared 16% in February

Thanks to factors such as improved liquidity, a recovery in the general market, and the resurgence of the artificial intelligence boom, the Sci-Tech Innovation 100 ETF Huaxia soared 15.97% in February, once again showing the biggest characteristic of its rebound.

However, the key factor for the Science Innovation 100 ETF Huaxia to take the lead in the rebound market is the bottom of performance+bottom valuation.

From a valuation perspective, the valuation of the Science and Technology Innovation Board has reached a historically low level, and the allocation is relatively cost-effective. Judging from the trend of the Science and Technology Innovation Board's price-earnings ratio (TTM, excluding negative values), it has gone through a three-year adjustment period since reaching a historic high in July 2020. It is currently at an all-time low of 32.53 (2/18/24), which is a historical fraction of 1.69%, and the margin of safety is high.

Judging from external factors, the Federal Reserve continues to raise interest rates, major suppression of science and technology innovation board valuations, and frequent macro-environmental uncertainties, weakening investors' risk appetite.

As the level of US inflation slows down, the Federal Reserve is expected to start cutting interest rates in 2024. If the domestic monetary policy remains moderately relaxed this year, the science and technology innovation board growth style valuation is expected to ease. Combined, the market's expectations about macroeconomic trends are no longer excessively pessimistic, which is conducive to an increase in market risk appetite. External constraints have been mitigated, and sector valuations are expected to be gradually repaired.

From a performance perspective, as of 22 o'clock on February 27, 2024, the Science and Technology Innovation Board performance disclosure had reached the current 569 targets, and 547 performance reports or forecasts were disclosed, with a disclosure rate of 96%. Compared to disclosures of performance forecasts (using upper and lower average values, which are less certain than express reports), the disclosure rate of current express reports has reached 88%, that is, the overall data is close to the actual performance of science and innovation.

The Science and Technology Innovation Board has revealed that based on performance targets, the 2023Y net profit growth rate is -44%. According to the subject of the current disclosure, 23Y net profit growth rate is -44%, which is a slight decrease compared to 2023Q3. Among them, the two major science and technology innovation boards that contribute a lot to net profit — SMIC/Daquan Energy's performance is weak, which affects the overall performance of the Science and Technology Innovation Board to a certain extent. After exclusion, the 23Y performance growth rate of the Science and Technology Innovation Board was -35%. Another target, BeiGene, which has had a big impact on profits, cut losses by nearly half in '23, supporting the recovery of the Science and Technology Innovation Board's performance.

Of the top 20 stocks in the Science and Innovation 100, 19 had disclosed results, and 17 had positive results; among them, Zhuhai Guanyu/Allis/Stewi/TurboBiography/Gaosex/Autoway had a net profit growth rate of more than 80% in 2023.

Huaxi Securities believes that as the factors disrupting the development of science and innovation gradually disappear, performance bottom+valuation bottom+market bottom are continuously confirmed, the margin of safety has improved significantly, and it is optimistic about the strategic opportunities of the Science and Technology Innovation Board.

2. Artificial intelligence ETFs surged 24.62% in February, the best performer

Artificial intelligence ETF (159819) surged 24.62% in February, with an annual decline of only 0.67%. It is the best-performing variety among the top ten core ETF products.

Judging from sector trends, topics such as computing power, chips, lithography, AIGC, metaverse, intelligent driving, and satellite internet are constantly rotating, and it can be seen that AI may be the main line.

Needless to say, the global economy is undergoing an accelerated transformation from an industrial economy to a digital economy. Developing the digital economy is a strategic choice to seize the opportunities of a new round of technological revolution and industrial transformation and innovation.

Artificial intelligence is the key to the digital transformation of the industry. Resonance of data, computing power, and algorithms drive the acceleration of the AI industry. iResearch expects the market to grow at a compound rate of over 25% over the next 3 years.

Huaxi Securities believes that the influence of AI and MR is deepening, and the content industry is ushering in a new round of technological change. Currently, with text generation and image generation as the starting point, the scope of AI generation has expanded to all fields of audio and video. Apple VisionPro was released, which is also driving the gradual improvement of the MR application ecosystem. The two main technology lines have entered a new stage of “from 1 to N”. The industry is expected to achieve a growth path from “cost reduction and efficiency” to “comprehensive innovation”. The fundamentals of various sub-sectors are also rising steadily, and current valuations have high allocation value.

100 ETF with low dividends rose 4.78% in March and February

The low-dividend 100 ETF (515100) continued the steady and steady trend of January in February, with a monthly increase of 4.78%. It has recovered all of its annual losses and is still up 4.7%.

Judging from the beginning of the year to date, dividend assets such as coal, banks, petroleum and petrochemicals are still leading the way, breaking to a certain extent the expectations of many investors that “the market will rebound, and the style will also change.” After market capital poured into dividend assets, a number of dividend-themed ETFs reached record highs.

The market is beginning to worry that after the stock price rises sharply, individual stocks with high dividends will reduce their dividends accordingly. Are dividend-themed ETFs still worth investing in?

To be honest, the recent macroeconomic data vacuum period. The January and February data will be released together, so it is difficult for us to accurately judge the response to economic fundamentals

Currently, from a trading perspective, market risks have been released to a certain extent, but it is still believed that economic stabilization is an important basis for further recovery in the stock market in the future.

Dongwu Securities believes that subsequent economic stabilization depends on a recovery in corporate profits, and that current corporate profits are still hampered by price levels. We observe that the PPI in January has not been corrected compared to the previous month; we need to continue to observe the price performance in February. We are cautiously optimistic about corporate profits in the first quarter of this year. The investment strategy for March was mainly growth, taking into account dividends.

First, the current market itself is still showing signs of defense; second, from a longer-term perspective, the Securities Regulatory Commission will guide companies to formulate a clear dividend distribution system, establish a sense of return to shareholders, and encourage listed companies to increase their dividends, which will be further implemented. Third, currently, funds are still allocating dividend varieties. Investing in high-dividend strategies is still worth sticking to.