The Chinese reporter of the securities firm learned from insiders of the fund company that Feng fuzhang, who has the reputation of "military emperor", will sell his first public fund product next week.
For a long time in the past, the contribution of military research to the profits of public funds was small, and the post of investment research director of top stream public funds was almost the same, with the research background of traditional manufacturing and large consumption. As a trillion level public offering giant, China Merchants Fund takes "the first brother of military industry" as the company's research director and quickly launches fund products for it, which largely reflects the impression of public funds on military industry. Earth shaking changes are taking place. Military industry has gradually begun to track, which can become after traditional manufacturing, large consumption and new energy, Another fund will increase the layout of new areas.
In an interview with a Chinese reporter from a brokerage firm, a fund manager of a heavy warehouse military industry of RONGTONG Fund said frankly that for a long time, the research on the military industry was opaque and the market impression was poor. The fund manager had no power to cover this field, but the industry impression was changing as the military industry stocks moved from speculation to fundamentals.
Feng fuzhang also believes that the current and future investment in military stocks is different from the short-term speculation a few years ago, and has more long-term investment opportunities. From a large level, military stocks will face the logic of long-term improvement of national defense budget. In terms of investment opportunities, they will focus on investment opportunities in military informatization, military materials, aviation, aerospace and so on.
"military emperor" starts fund manager career
A relevant person of China Merchants Fund told the Chinese reporter of the securities firm on February 9 that the first public offering product to be managed by Feng fuzhang - China Merchants high-end equipment hybrid securities investment fund will be launched on February 17. Feng fuzhang joined China Merchants Fund in August last year and served as the director of the research department of the trillion level public offering giant. Previously, he served as the deputy director of the Research Institute and the chief analyst of the military industry at Anxin securities. He once ranked first in the national defense military industry as the best analyst of new wealth from 2014 to 2020, and has the reputation of "military emperor" in the industry.
According to the information provided by China Merchants Fund, China Merchants high-end equipment hybrid securities investment fund will focus on the high boom of high-end equipment industry and strive to grasp the investment opportunities of boom track. The investment proportion of stocks and depositary receipts in the fund's portfolio is 60% - 95% of the fund's assets, of which the stock investment proportion of Hong Kong stock general standard does not exceed 50% of the fund's stock assets. The fund mainly invests in stocks and depositary receipts of listed companies with high-end equipment theme, and the stocks and depositary receipts of listed companies with high-end equipment theme shall not be less than 80% of non cash fund assets.
According to the research reports of several securities companies, the boom of high-end equipment industries such as military industry is rising, and the overall profitability continues to improve. The "three-step" strategy of the 19th national congress determines the long-term business cycle of the military industry, strives to promote the modernization of national defense and the army, and lays the tone for the long-term development of the military industry. During the "14th five year plan" period, the demand side of the military industry is expected to maintain steady growth.
military industry leaders will search for four main lines of gold
Feng fuzhang also had a deep understanding of investment opportunities in the military industry in his internal exchanges recently. He said that the research on the military industry has three conclusions.
First, the "military training and preparation" has brought about a significant increase in orders and a worry free growth of the industry. This year, the growth rate of the industry has exceeded 40%, and the growth rate of the industry will still be about 30% in the next three years.
Second, some companies have low valuations for 2022. Due to the large number of financiers and hot money in the industry, rapid fluctuations cannot be ruled out. In terms of time, there has been a large market from November to January in the past three years. The end of October or the beginning of November is a good time for configuration.
Third, the upstream data within the military industry is good and has strong traceability, which is still the main allocation direction. Several downstream companies have the idea of launching incentives.
On the supply side, during the 13th Five Year Plan period, breakthroughs were made in the field of national defense science and technology innovation, especially in major science and technology projects, core key technologies and other fields. On the demand side, military training and preparation brought urgent demand for key models, which can be supported by relevant order announcements. The performance of the military industry also gives a fundamental guarantee. The data show that the military industry sector achieved a total revenue of 275.5 billion in the third quarter of 2021, with a year-on-year increase of 24.2%, and the net profit attributable to the parent company was 27.6 billion, with a year-on-year increase of 51%. It is expected that the annual net profit will continue to perform well in the first three quarters.
Feng fuzhang predicts that the growth rate of the military industry will accelerate in 2021 and continue to grow at a medium high level from 2022 to 2023, mainly due to the acceleration of orders due to the large amount of retained funds and preparations for war. 2021, 2022 and 2023 may break the law of the past five years and show a rapid growth pattern. In addition, the star boss, known as the "emperor of military industry", further believes that military expenditure, capital investment and national defense expenditure are important connotations of public consumption. The growth rate of national defense budget in 2021 will increase by 6.8% year-on-year, and there are many other types of funds in the market, such as local funds and military civilian integration funds, which are mostly invested in the manufacturing stage on the supply side, Sustained capital investment is the primary key factor for the growth of the military industry. The reform of the military industrial system improves the operating efficiency of enterprises. With the advancement of the reform, the systems and systems in the industry that do not meet the needs of development can be gradually reformed. Moreover, there are signs of further promotion of equity incentive. Under the pressure of price reform, the willingness of enterprises to reduce costs and expenses will increase, which may lead to the improvement of the profitability of the industry. The main combat equipment has a rapid momentum, such as a main fighter and a general-purpose helicopter. The preparation logic will bring high-speed growth from 2021 to 2023.
In the past, military stocks were only the short-term operation object of the fund for a long time. Can the active equity fund characterized by military industry reflect the long-term investment value of the fund?
Feng fuzhang believes that the current and future investment in military stocks is different from the short-term speculation a few years ago, and will have more long-term investment opportunities. From a large level, military stocks will face the logic of long-term improvement of national defense budget. China's national defense budget accounts for only 1.21% - 1.32% of GDP, while the corresponding United States and Russia are 3.53% and 3.26% respectively, The proportion of national defense budget in GDP is in line with that of the United States and Russia, which means that the performance of military stocks will be more guaranteed. At the same time, he stressed that the growth rate of military industry should be higher than that of military expenditure, including structural changes, rapid renewal of parts and components, military civilian integration fund, retained funds, etc.
Based on the above logic, Feng fuzhang believes that the largest investment opportunities in the military industry will focus on military informatization, new materials, aviation, aerospace and so on. Among them, military informatization has the attribute of TMT and has the characteristics of large performance and valuation flexibility. Another military industry segment he will focus on is military new materials, which is technology intensive and capital intensive with high barriers; The increase in the volume and proportion of new models makes the scale effect prominent and has good growth. The main opportunities of the military new material track are concentrated in the direction of superalloys, titanium alloys and carbon fiber composites.
What does trillion public recruitment and compulsory recruitment of military talents mean?
It is worth mentioning that the trillion level public offering giant strongly invited the "first brother of military industry" to serve as the director of the company's research department and fund manager, which largely reflects that the impression of public funds on military industry is undergoing earth shaking changes, and military industry may become another shining track after traditional manufacturing, large consumption and new energy.
Analysts believe that for a long time, military researchers have not been the most shining positions in the fund company. The investment director and research director of top stream public funds almost all have the working background of researchers in traditional manufacturing and consumer industries. To some extent, it also shows that military research has a low contribution to the profitability of the fund company, As a result, the military industry has been neglected in public fund investment for a long time. Many fund managers scoff at investing in military stocks. However, as military stocks increasingly move towards fundamental investment, military industry has gradually become a very important track in the eyes of fund managers.
"Many public fund managers will not look at this industry if they are not military researchers. The research of this industry is opaque. The original impression is very poor and there is no motivation to look." Wang Di, manager of RONGTONG advanced manufacturing fund, said in an interview with a Chinese reporter from a securities firm that the fund had no power to cover the military industry, but with the scarcity of good industries, the performance of military stocks has become more and more prominent, and the industry impression is changing.
The above fund managers believe that the stability of the military industry is significantly improved, and the original pure theme speculation has gradually become performance driven, which is also the reason why they dare to take heavy positions in the military industry. Although the military industry still fluctuates greatly in terms of the actual performance of the stock price, with the release of quarterly performance and the improvement of the recognition and acceptance of institutional investors, the volatility will gradually decrease, although it will take some time.
