Li you, manager of ChuangJin Hexin Industrial Cycle Fund:
optimistic about high-end manufacturing investment opportunities related to carbon neutralization and import substitution
Looking back on the A-share market in the past few years, 2017-2020 was a bull market for core assets in the large market and 2021 was a bull market for small and medium-sized stocks. In the first half of 2022, there will be downward pressure on China’s economy and the policy will focus on steady growth. It is expected that A-Shares will still focus on structural opportunities and the market style will be more balanced. In 2022, focus on the high-end manufacturing industry, and make configuration around the two long-term industrial trends of carbon neutralization and import substitution.
in the direction of carbon neutralization, I focus on new energy, including wind power, photovoltaic, energy storage, electric vehicles, etc. in the field of wind power, the large-scale cost reduction of wind power in the past two years has exceeded the general expectation of the market. In particular, the accelerated parity of offshore wind power has opened up the future space of wind power. 2021 is the year of valuation and repair of wind power. In 2022, we will focus on the parts and components to alleviate the cost pressure. This year, the main engine factory will deliver the low-cost orders of the past year and a half and face the stress test. The company that can maintain the stability of gross profit margin under the pressure may be the leading company in the future. After the rush loading period in 2021, the installed capacity of offshore wind power will probably decline in 2022. Companies mainly engaged in offshore wind power may face the risk of year-on-year decline in revenue and gross profit margin.
In the field of photovoltaic, the price increase factor of upstream polysilicon that suppresses photovoltaic is easing, and the price reduction will stimulate the outbreak of demand. It is expected that the industry will usher in a comprehensive market, and is optimistic about the links with good competition pattern such as module integration, inverter, adhesive film and glass; In the field of energy storage, in 2021, the state issued some policies related to supporting energy storage. With the continuous reduction of cost, energy storage will usher in rapid growth. We are optimistic about the leading companies in battery and inverter; In the field of electric vehicles, it is expected that the demand of the industry will remain high in 2022. However, due to market concerns that the long-term growth rate will slow down after the rapid increase of penetration, the industry will face a certain degree of killing valuation, and the stock price increase of the overall sector may not be as fast as the performance growth. There will also be obvious differentiation within the industry. It is necessary to be cautious about some links where the price of products increased a lot last year and the expansion of production is accelerating, focusing on the battery and diaphragm links with the bottom profitability and the best competitive pattern.
in the direction of import substitution, I focus on semiconductors and specialized new products. After 40 years of reform and opening up, China has the basis of import substitution in many industries, and the trade war and epidemic have accelerated this process. The global semiconductor industry is a cycle industry. At present, the cycle is in the middle and later stage. However, semiconductor equipment benefits from import substitution, and power semiconductor benefits from the new energy industry. It is a subdivided growth link in semiconductors. In addition to semiconductors, including machine tool related parts, industrial control automation and wind power bearings, which are in the process of rapid import substitution, there are also some bottom-up small industries and small companies that deserve to be tracked.
In addition, 2022 is also optimistic about some traditional manufacturing industries related to steady growth, such as machinery, building materials, chemical industry, steel, etc. The policy tone guarantees growth, and after nearly a year of adjustment, the share prices of the above-mentioned industry leading companies are at the bottom, and there are periodic rebound opportunities in the first half of the year.
Finally, I wish you all success in the year of the tiger and smooth investment!
Zhang Feng, deputy investment director of ABC Huili Fund:
the moment is the most precious treasure
As time went by, the Agricultural Bank of China Huili fund handed over an excellent investment answer in 2021.
Under the combination of rising profits and credit crunch, the index level profit-making effect will decline in 2021, but there are abundant structural opportunities. The structural market of growth stocks represented by new energy is prominent. Behind it are the changes of macro liquidity, prosperity, incremental capital and policy direction, which jointly dominate the changes of market style in 2021. Incremental funds spread from foreign capital + public offering to private placement + retail investors. The high band of funds exacerbated the stock game, and the rotation speed between sectors reached the historical extreme level, resulting in poor overall profit-making effect.
In 2022, we need to pay more attention to external risks. The repair after the overseas epidemic has been basically completed, and the economy is still resilient at different stages, but the slowdown trend is relatively certain. Overseas “stagflation + tightening” will have an impact on A-Shares from two aspects of economy and liquidity. Based on the judgment of the current international and Chinese economic trends, the probability of A-Shares will remain volatile in 2022, dominated by structural opportunities, but the structural market will turn to convergence. The poor performance differentiation of growth value will obviously converge. Due to the high performance elasticity, small and medium-sized growth styles still have relative performance advantages. The performance robustness of large market capitalization companies will become scarce again, and the allocation cost performance will be significantly improved.
From the perspective of macro conditions, the macro economy in 2022 is still expected to be in a downward trend, and the credit and currency will be looser than that in 2021. It is more favorable for growth stocks to shift from a combination of wide currency + tight credit to a combination of wide currency + stable credit, but it will squeeze the overall valuation of the market. The overall style will still grow in 2022, but it will not be as extreme as that in 2021.
At present, economic data and corporate profits will enter a short vacuum period. The Politburo meeting and the central economic work conference at the end of 2021 have given a very clear tone of steady growth, and the fear of profit decline has eased in stages; After entering the first quarter, the pre landing of credit and the market promotion probability of incremental funds are high. With the intensive landing of monetary, fiscal and industrial policies, the verification of stable growth expectations, the upward probability of the market in spring is increased, and the cross year period is dominated by liquidity expectations.
From the perspective of investment layout, looking for industries with relative prosperity advantages is still the core factor to obtain excess returns, taking into account the matching degree of valuation. Relatively optimistic about high-end manufacturing directions such as intelligent driving, photovoltaic and military industry with continuous high growth and reasonable valuation, taking into account green investment opportunities of stable growth and carbon neutral transformation; Increase industries with reasonable valuation and improved bottom of the boom in 2022, such as optional consumption, mass consumption, and emerging consumer industries with increasing penetration.
The present is the most precious treasure to cherish. The degree of market institutionalization is higher and higher, and the market maturity is gradually improved. We firmly believe that A-Shares will provide a good financing environment for the growth of many emerging industries and excellent companies. With the improvement of the degree of institutionalization, the market pricing power will be continuously enhanced, and investment opportunities will emerge one after another.
On the occasion of the Spring Festival, I wish you a happy New Year! The whole family is in good health!
Zhang Feng: Master of engineering of Tsinghua University, who won the gold medal of the third Asian Physics Olympic Games. 12 years of securities experience, including 6 years of investment experience. He is currently the deputy director of investment of Agricultural Bank of China Huili fund.
Gu Qibin of Tianhong Fund: the manufacturing industry has become a golden track
grasp the long-term main line of carbon neutralization
Although the market adjustment since the beginning of the year has also greatly adjusted the relevant stocks of carbon neutralization, carbon neutralization, including the adjustment of energy structure, is a long-term industrial direction in the coming decades. We should grasp the main line of investment from open source and throttling.
With the transformation and upgrading of China’s manufacturing industry, the manufacturing industry has become the golden track of a shares. In addition to paying attention to high-quality leading companies, there are many “invisible champion” enterprises to be explored.
grasp the main line of “carbon neutralization” investment from open source and throttling
Carbon neutralization is one of the best performing main lines in the capital market in 2021. In the first half of last year, the completion of carbon compliance indicators in many regions and provinces was not good. Since the third quarter, the policy has been further strengthened, and there have been obvious excess returns on relevant tracks.
Since 2022, the market has adjusted as a whole, and relevant stocks in the field of carbon neutralization have also experienced a correction. The main reason is that the valuation is not cheap enough, the price expectation is high, and the transaction is too crowded. However, in the medium and long term, we believe that carbon neutralization, including the adjustment of energy structure, is a long-term industrial direction in the coming decades. In fact, clean energy will be an important investment line for the transformation and upgrading of China’s manufacturing industry and the adjustment of energy structure in the future.
Combing the investment opportunities of carbon neutrality is mainly divided into two categories: one is open source and the other is throttling. Open source is mainly concentrated in the field of power generation side. At present, green new energy such as photovoltaic and wind power account for a very low proportion in China’s energy structure. According to the plan, including the goal promoted by our industrial policy, the proportion of green power will continue to increase in the future, and will eventually replace coal and become the mainstay of the primary energy structure. This kind of energy structure adjustment is an irreversible process. In the coming decades, it can be expected that the long-term growth of photovoltaic, wind power and other clean energy in the future is very certain, and their valuation center will rise systematically and irreversibly. Therefore, we feel that after this round of adjustment, there are more investment opportunities in the field of photovoltaic and wind power.
From the user side, the penetration rate of new energy vehicles in China and Europe has increased significantly in the past two years. By the end of last year, the penetration rate of new energy vehicles had exceeded 20% in the annual new car sales. When the penetration rate of an emerging industry exceeds 10% to 20%, it will enter the growth period of rapid development, which is also a sweet spot for investment in the capital market. Therefore, we believe that after this round of adjustment, the assets of many new energy vehicles have become more and more attractive.
In the direction of throttling, environmental protection measures such as industrial emission reduction, energy conservation and emission reduction and environmental recycling also contain a lot of investment opportunities. Therefore, whether it is open source or throttling, carbon neutralization is the main line of long-term investment in the coming decades.
manufacturing has become a golden track for A-Shares
Back to the manufacturing industry, in terms of policy, the state pays more attention to high-end manufacturing than before. The 730 high-level meeting in 2021 further strengthened the important position of scientific and technological independence and paid more attention to the development of manufacturing industry. The core idea is to emphasize scientific and technological innovation and domestic substitution, and constantly improve China’s industrial chain.
At present, the conditions for the transformation and upgrading of China’s manufacturing industry have been met: first, the accumulation of knowledge and technology has approached qualitative change from quantitative change; Second, the industrial chain and supporting infrastructure tend to be improved; Third, financing channels are increasingly improved. China has passed the 1.0 period of the world factory and is transforming to the 2.0 era. “Made in China” is gradually moving towards “made in China”. At this stage, we will see more and more leading manufacturing enterprises, including but not limited to enterprises in carbon neutralization, new energy, new materials, advanced manufacturing and other fields, take the lead in breaking through some technical shackles and leading the industry to upgrade. In the process of upgrading, they can enjoy higher profit grade dividends. China’s manufacturing industry is not only large, but also becoming stronger and stronger. Therefore, the upgrading of China’s manufacturing industry is actually a long-term only way.
We believe that the track of China’s manufacturing industry is one of the best golden tracks in the A-share market. China’s national condition is to build a country with manufacturing industry. Manufacturing industry is a very important link both in the grasp of policies and in the proportion of our national economy. According to our statistics, from 2005 to now, the manufacturing industry index has sustained excess returns on the market index, which further verifies that the manufacturing industry is the golden track of a shares. Therefore, both the general trend of carbon neutralization industry and the endogenous driving force of manufacturing upgrading will be the direction of our long-term investment and research in the future.
capture the “invisible champion”
Due to the great depth and breadth of China’s manufacturing industry, the value of many excellent enterprises is far from being recognized by the market. Mining the “invisible champions” of some subdivided industries is expected to obtain more excess returns.
Tianhong’s active stock investment style is focus. We hope that the long-term excess return comes from our long-term tracking and deeper understanding of these excellent companies. My personal pursuit of perfectionism in stock selection mainly focuses on two types of companies. The first is the current core assets. These companies have stable growth, strong competitive advantage, good corporate governance model and acceptable valuation level. The second category is the core assets of the future. These companies themselves have a very good foundation, but before or the growth prospect is not clear, or the competitive advantage has not been reflected, or the internal management of the company is still flawed, and the stock price is at a low level; However, now that the company has made up for its shortcomings and its fundamentals have begun to rise significantly, but the market has not yet fully recognized and priced, it is the “invisible champion” of the industry in the future.
In addition, our team paid special attention to risk management and risk control, and formulated a series of comparative standards to evaluate and track a company. We only invest in companies within the capability circle. We hope to select the best batch of leading companies in manufacturing and cyclical products in the industry by virtue of the team’s rigorous stock selection and perfectionist investment methodology, so that more investors can share the dividends of this era.
Gu Qibin, fund manager and leader of the manufacturing group of the stock investment research department of Tianhong fund, once won the best analyst of new wealth, joined Tianhong fund in 2015, and is now the fund manager of Tianhong high-quality growth enterprise, Tianhong cycle strategy, Tianhong advanced manufacturing and Tianhong high-end manufacturing. Pursue and hold high-quality enterprises for a long time and allocate them in a balanced manner. Perfectionists of stock selection in the manufacturing industry require that they have an understanding of holding enterprises beyond the market, and the depth of understanding should be in the forefront of the market.
Zou Wei’s Spring Festival message from Huian Fund:
find the anchor of the market and grasp the 2022 investment opportunity
Looking back on the past 2021, the overall market fluctuated greatly and the overall valuation converged. In 2021, we made industry level allocation and individual stock selection mainly based on the comparison of industry prosperity comparative advantage and company competitive advantage, combined with valuation and cost performance. It is mainly equipped with promising new energy vehicles, photovoltaic, military industry and other industries; Although we experienced market and industry fluctuations, we did not carry out short-term operation and adhered to the shareholding based on the medium and long-term consideration of “losing short-term time, not losing long-term space of stock price”. The main focus is on the tracking of industrial prosperity and the comparison of Industry Valuation and cost performance.
At the investment level, my most important experience has two points: first, investment needs to be systematized rather than fragmented; Second, the system must have vitality, be able to continue to evolve and extend the capability circle, so as to achieve real industry comparison and avoid bias and blind spots.
First, what is the systematization of investment? I think this system refers to a systematic, inclusive and flexible investment framework that a fund manager needs to refine after careful and in-depth study of industries and enterprises with a sufficient number of samples. This framework can not only include different types of industries and enterprises, but also unify the method of industry comparison, so it is called systematization. Why is this systematization important, because it will accelerate our understanding of an industry. Most importantly, it is the basis for us to compare different industries; If different industries cannot be unified in the same system, there will be no dimension and grasp of industry comparison.
Second, why should this system have vitality? I believe that the maintenance of a system requires not only the continuous application, summary and improvement of their own knowledge and logical framework, but also the fund manager’s curiosity and sense of youth. In this way, the ability circle can be effectively expanded, there can be real industry comparison, and the ability circle can not retreat into a comfort circle. Only in this way will our system not be put on the shelf and become rigid, or produce prejudice and blind spots and become groundless. In the second half of 2021, the industry in which we put the most internal and external resources for tracking, analysis and research is precisely the industry in which we have the least positions.
After the beginning of 2022, the market fluctuates greatly. The industry differentiation is fierce. On the one hand, the traditional industries with undervalued and low growth performed better. On the other hand, the track stocks with high boom and high growth declined significantly. I think there are two main reasons:
First, what are the clues of industry differentiation? We believe that it is neither performance growth nor valuation, nor even the rise and fall of the past year. It may be more due to the different allocation weights of the capital industry. The transaction level is the main reason for the recent fluctuations of the market.
Second, what are the trigger factors? From the perspective of the market itself, the valuation switching of 22 years was basically completed in November of 21, both in high growth industries and some stable consumer industries. After the valuation switching was completed, a valuation vacuum period or valuation swing period began in December, during which the concerns about the strength of policies under the economic downturn and the expectation of the deterioration of the global liquidity environment were superimposed. Therefore, the market style showed violent fluctuations.
What do you think of the future?
First, what is the anchor of the market? When the market is chaotic, I think it is more necessary to straighten out my investment logic; What is the anchor of the market – the core of pricing? There is no doubt that only the comparison of medium and long-term prosperity and valuation cost performance of the industry. Starting from this anchor, we can find opportunities in the market, identify potential risks, and truly realize that the allocated assets may lose short-term time, but will not lose long-term stock price space.
Second, the market environment in 2022: first look at whether there are systematic risks at the valuation end. The liquidity environment in 2022 is relatively complex. The non synchronization abroad is already a high probability event. What impact will this non synchronization have on the valuation of the Chinese market?
(1) first of all, in the short term, we don’t think we need to continue to be pessimistic for two reasons: first, the negative factors such as external contraction and the downside risk of China’s economy have become the focus of discussion in the whole market, and the trend of the market has reflected the relevant negative expectations; Second, the market valuation has contracted in 2021, and there is little room for further contraction at the valuation level. In the first half of the year, China’s liquidity and policy environment were relatively friendly, so the valuation level has a supporting foundation.
(2) Secondly, we believe that we need to pay more attention to the trend of exchange rate in the medium and long term. Careful investors may be concerned that after the effective prevention and control of China’s epidemic in the second half of 20 years, the RMB exchange rate has risen all the way. Recently, despite the disturbance of the expectation of the Federal Reserve to raise interest rates, the RMB exchange rate remains relatively strong. On the one hand, this is related to the strong growth of exports in the past two years. On the other hand, what we need to think about and pay attention to is the huge gap between the economic health and long-term growth prospects of the world’s major economies represented by the trend of exchange rate; Perhaps we will look back and see that the unsynchronized monetary policy may be a new beginning for us. Therefore, in the medium and long term, the market trend of slow bull still continues, but 22 years is expected to be the fluctuation stage in the process of slow bull.
Third, the main line of the market in 2022: in the short term, the valuation swing period after valuation switching continues. Industries with undervalued value and industries without valuation can rise together. In the short term, the market is relatively difficult to do, but this time is the layout period and the best time to tap opportunities. What are you digging for? In my opinion, the core is performance, which is the core anchor of the market. Corporate profits are also the most important and solid foundation for the long-term improvement of A-Shares in the future. The industry with dominant performance growth will still be the most important direction for the market to generate revenue in 2022. At present, in the direction of high prosperity: there are still many opportunities for new energy, military industry and electronics; Consumption direction: the opportunity of mandatory consumption also needs attention. This year’s price increase transmission, inventory replenishment and the recovery of mass consumption after the lifting of the ban on the epidemic will bring performance flexibility to mandatory consumption. On the whole, the market opportunities this year are relatively balanced, not just in one or two industries. On the whole, we need to pay attention to two types of opportunities: first, industries and individual stocks with high performance growth, and there is no risk of killing valuation at the valuation level; Second, the valuation has returned to a historically low position or a reasonable position, and at the same time, it can achieve medium and long-term bottom recovery at the performance level.
Finally, I wish the majority of investors a happy new year and good luck in the year of the tiger!
Introduction to Zou Wei:
20 years of experience in Securities and funds and 13 years of experience in fund investment management. Worked in China Greatwall Securities Co.Ltd(002939) and Harvest Fund. He joined Harvest Fund in 2003 and once served as the manager of harvest Pu capital preservation, harvest steady hybrid, harvest strategy hybrid and harvest theme hybrid fund. He joined Huian fund in December 2017 and served as deputy general manager and chief equity investment officer. Currently, he is the fund manager of Huian equilibrium optimization, Huian Hongyang three-year holding period hybrid, Huian Yuyang fixed opening hybrid and Huian industry leader. Be good at growth stock investment and adhere to the concept of medium and long-term investment.
Golden Eagle Fund Yang Xiaobin: the restless market after the festival is worth looking forward to
the style of large and small disks may be expected to gradually converge
Looking back on 2021, although the impact of covid-19 epidemic has gradually dissipated, the global economy is still facing the aftershock of the epidemic, high inflation and production and supply chain problems remain unresolved. Under the background of the weakening of the global economy and the rising of the global economy, China is facing a breakthrough in the scale of investment. There are also endless discussions about the return of policies to normalization. Among them, China took the lead in arranging cross cycle economic regulation, accelerating the “double carbon” strategy, and preventing and resolving the financial leverage of real estate enterprises; The United States began to withdraw from the epidemic subsidy in the third quarter of last year, and started debt purchase reduction at the end of last year, trying to return to economic normalization.
Although the global capital market faced some twists and turns in the process of policy exit, the strong industrial trend and economic development toughness still supported the structural market of a shares, and the U.S. stocks also continued to hit a record high. In 2021, we witnessed the important impact of performance driven on A-share investment. Under the background of economic transformation, we benefited from the upstream resource products on the supply side and the new energy industry chain under the “double carbon” strategy, which showed an alternating interpretation in the A-share market in 2021.
In terms of investment operation, in the first half of 2021, we paid attention to the signs of withdrawal of global core national policies, and then began to gradually reduce the pro cyclical manufacturing, consumption and other fields with declining performance certainty, and switched to new energy, domestic alternative hard technology and other fields benefiting from the dual carbon strategy, so as to increase the ability of the portfolio to resist cyclical fluctuations. In the second half of last year, as the economic downturn gradually entered the second half, the balance of the portfolio was improved. The allocation direction was mainly in three aspects: the local growth areas with high performance certainty, the consumer sector (ppi-cpi scissors convergence) and the reverse cycle (real estate and related chains), which achieved relatively good results.
Looking back on last year’s investment, I summarized the following experience:
1. It is necessary to closely track various variables affecting the fundamentals of the industry and look at the changes in the profits of the industry more dynamically. Only in this way can we give a more calm response to the changes in the market and avoid looking for a sword in the face of difficulties;
2. The market is changing all the time. It is important to compare everything quickly.
What impressed me deeply was that the market style began to change significantly in April 2021, and the global growth stocks dominated by new energy rebounded significantly. In contrast, consumption and core assets began to adjust significantly, which occurred with the promotion of global low-carbon policies and the macro logic of peaking economic expectations, Whether to deal with this change quickly determines the relative income of the whole year of 2021;
3. For investors with relatively balanced positions, we must continue to pay attention to any opportunity. For example, last year’s core assets and new energy in the middle of the year require us to have a very objective and rational investment perspective and a broader investment vision, and we can’t have too subjective personal views.
2022 may usher in a political year for both China, the United States and Europe. The demand for stability may not be limited to China. After the end of taper, with the maturity of full employment conditions, the landing window of interest rate hike is getting closer and closer. Under the setting tone of steady growth, China’s economy is expected to recover weakly after bottoming out, forming a pattern of low before high, and continuous interest rate and reserve requirement cuts may be expected. The overall liquidity is loose, the credit is stable, and the ppi-cpi scissors may usher in convergence. A shares may be in the period of profit decline in the short term. It is necessary to avoid the mid and upper reaches varieties with large risk of profit reduction, pay more attention to the mid and lower reaches varieties, and wait for the signal of bottom of fundamentals.
The stock market adjusted significantly at the beginning of 2022. In addition to the stampede at the transaction level, it was mainly due to the tightening of external liquidity and the uncertainty of China’s economy in the short term. However, we believe that the probability of pessimistic expectations in the current market may change, the subsequent inflation and unemployment rate in the United States may still fluctuate repeatedly, and there is a high probability that the intensity and frequency of interest rate hikes by the Federal Reserve will be corrected. The actual effect of China’s steady growth remains to be seen. If we need to maintain economic and employment stability, we need greater development of infrastructure and significant improvement of real estate. Social finance will also improve month by month, which may brew greater structural opportunities.
The restless market of the stock market after the Spring Festival is still my relative concern. At that time, it may be a key moment to successively verify the quality of this round of steady growth. The oversold market at the beginning of the year provided us with a better opportunity to screen high-quality stocks killed by mistake. In the macro aspect of positive policy attitude and obvious structural differentiation of profits, 2022 is expected to be a year with relatively limited index space (depending on the implementation of stable growth) and more structural opportunities, but the rising stocks may be different from 2021.
In the first half of the year, or in the stage of overall profit decline and credit expectation improvement, growth stocks with high short-term performance certainty are still relatively dominant. We will focus on technological growth, mass consumption and countercyclical varieties with high performance certainty. Later, with the gradual stabilization of economic expectations, we believe that market opportunities may gradually shift to pro cyclical industries benefiting from the decline of raw material costs, and the style of large and small markets may gradually converge in 2022.
In terms of industry allocation, we will closely track the fundamental changes in the field of scientific and technological growth, focusing on varieties with high performance certainty; At the same time, we will continue to pay attention to opportunities such as mass consumption and counter cyclical varieties.
① growth areas: focus on the middle and lower reaches of new energy with improved prosperity and cost-effective valuation (photovoltaic modules / batteries / wind power parts), consumer electronics with booming prosperity (Consumer Electronics), and domestic substitution related semiconductor equipment; G-end field (industrial software / network security) that takes into account structural adjustment and steady growth.
② consumption field: under the background of common prosperity, there is a potential increase in mass consumption demand. We can pay attention to the categories with strong expectation of price increase and optional consumer goods benefiting from credit expansion.
③ counter cyclical varieties and related industrial chains: real estate, and gradually pay attention to the stocks in the industrial chain with strong growth and reduced raw material costs, and consume building materials, household appliances and construction machinery.
