At the end of last year and the beginning of this year, the market style suddenly changed, and the trend of infrastructure and other sectors with "stable growth" as the main line was like a rainbow.
According to the data, as of February 18, the CSI infrastructure engineering index has increased by 15.57% since November 15, 2021 and 8.31% this year, becoming a scenic spot in a weak market.
Why can the infrastructure sector rise against the market? Can it become the main line in 2022? In this regard, the reporter of China Fund News interviewed Huo Huaming, the ETF fund manager of GF China Securities infrastructure project, Luo yingyu, the fund manager of Penghua Fund quantification and derivatives investment department, Huang Yue, the ETF fund manager of Cathay Pacific building materials, Yang Kun, the fund manager of Wanjia China Securities dividend index, Huang Zhi, the fund manager of Xincheng China Securities infrastructure project, Xie Yi, the fund manager of Nord fund Wang Han, a researcher of Boshi fund industry research department, and Jiang Junchen, a selected mixed fund manager of Hang Seng Qianhai port stock connect.
These eight investment researchers believe that under the background of steady economic growth, infrastructure investment, as an important focus to drive GDP, has multiple benefits, won the favor of funds, ushered in the adverse market, and is expected to become the main investment line worthy of attention. Investors should pay attention to the risks behind the fund layout.
multiple factors triggered the strength of infrastructure sector
China Fund News: the infrastructure sector has performed since the end of last year. What triggered this wave of rise?
Xie Yi: since the end of last year, the economic data is close to the cyclical bottom. The central bank has issued a series of measures such as interest rate and reserve requirement reduction to help the economy enter the track of recovery as soon as possible. Under the expectation of steady growth, the market usually selects infrastructure related industries, including construction, building materials and some upstream cyclical industries, resulting in excess returns in these industries.
Huang Yue: in the context of steady economic growth, infrastructure investment, as an important focus to boost GDP, has multiple benefits. From the perspective of policy, there have been bursts of warm winds in the infrastructure and building materials sector recently. From the perspective of valuation, the current valuation of building materials and infrastructure sectors is at the lower middle level, and the investment safety margin is high.
Yang Kun: the overall adjustment of the market from December 2021 has impacted all market investors. The rising interest rate driven by overseas inflation is affecting global asset pricing. The style switching of funds going north and other factors have a direct impact on the institutional allocation that originally lacked incremental funds and operated with high positions to a certain extent. In the environment of increased market uncertainty and loose newspaper groups of popular tracks in the early stage, the market gradually focuses on the main line of "stable growth" with the most favorable policies and the most clear direction. Infrastructure is an important starting point for China's steady growth in 2022, and relevant sectors also show significant excess returns in the secondary market.
Jiang Junchen: the rising market of this round of infrastructure mainly comes from the feedback of the market about the downward pressure on the whole Chinese economy, the expectation and stimulation of the "steady growth" policy, and the resonance results brought by the switching of capital levels.
one of the tracks worthy of attention in 2022
China Fund News: has the entire infrastructure sector ushered in an inflection point? Will 2022 be a track worthy of investment and attention?
Huo Huaming: there are many indicators to observe infrastructure, among which the issuance of special bonds and project reserves are mostly used. At present, the two indicators restricting the infrastructure sector have been improved to a certain extent. In addition, we can also closely track the economic data released by the National Bureau of statistics, because the infrastructure sector is an important tool to hedge against the economic downturn. If an obvious inflection point is observed in the economic data, investors can also use it as the inflection point of investment in the infrastructure sector.
Huang Yue: vertically, the sector valuation is in the middle and low quantile, which is a historically low position. With the advance issuance of special bonds in the first and second quarters of 2022 and the implementation of financial funds to infrastructure projects, there is much room for valuation improvement, which is a track worthy of attention in 2022.
Xie Yi: we are cautious about the concept of track. It is difficult to predict the rise and fall of a certain track. Resetting an industry and track will also bring greater volatility, and the choice of individual stocks is more important. Specifically in the field of infrastructure, we believe that emerging infrastructure related stocks, traditional infrastructure and upstream cycle related industries can also select excellent targets, which can provide long-term investment opportunities.
Wang Han: infrastructure construction is different from other industries because its construction cycle is very long. From the perspective of real economy, the verification cycle is also relatively long. The infrastructure industry will be better in 2022.
Huang Zhi: this year, the demand for funds and projects is expected to form a joint force to promote the moderate recovery of infrastructure investment. In terms of structure, new and old infrastructure is expected to work together. In terms of volume, old infrastructure still occupies an important position. The volume of new infrastructure is relatively small, but the kinetic energy is relatively strong. From the perspective of individual stocks in the infrastructure sector, the market may mainly appear in the process of expected improvement and verification, which can be paid attention to in the first half of the year.
Jiang Junchen: at present, the infrastructure sector has the advantages of high expectation and low value. Compared with other sectors, it has stronger certainty and higher investment cost performance.
Luo yingyu: throughout the year, it is expected that the growth rate of infrastructure investment will maintain a high single digit growth, especially in the first half of the year, the growth rate of infrastructure investment is expected to reach a new high since 2017. Judging from the recent high-frequency data, the commencement of projects after the festival is accelerated, the capital construction fund support is strong, and the physical workload of capital construction is accelerating, which is reflected in the capital market, which may form an obvious market style preference.
new infrastructure, urban infrastructure,
green infrastructure is favored
China Fund News: what segments of infrastructure can you pay attention to?
Xie Yi: from the bottom up, we think that stocks with long-term investment value first appear in the field of new infrastructure, such as infrastructure related to digital economy and renewable energy. Secondly, the upstream raw materials in traditional infrastructure, including building materials, engineering services and other related fields.
Huang Yue: the quadruple resonance of "new infrastructure + urban construction + green infrastructure + rural infrastructure" is expected to continue to drive the investment value of the industry. New infrastructure covers network upgrading, digital transformation, scientific and technological innovation, intelligent integration, etc; Urban renewal and construction drives the demand for municipal infrastructure such as urban pipeline aging, renewal and transformation and old community transformation, and the market space is large; "Double carbon" releases the demand for green infrastructure, and industries related to energy-efficient and energy-saving equipment and urban green transformation welcome growth opportunities; Financial investment in rural infrastructure has been gradually increased, and agricultural and rural modernization has brought investment opportunities in rural infrastructure.
Wang Han: the infrastructure sector can be divided from two perspectives. One is the direction of infrastructure, such as transportation, storage and transportation, electricity, gas, shipping, storage, etc. there are great differences in the growth space in different directions. Firstly, the power sector may be the most elastic. In addition, there may be a certain increase in transportation. On the other hand, infrastructure enterprises are divided into three categories: central enterprises directly under the central state owned assets supervision and Administration Commission, provincial infrastructure enterprises and private enterprises. It is possible that infrastructure enterprises of national central enterprises will benefit more.
Huang Zhi: infrastructure construction is a huge market. In addition to traditional infrastructure construction, it is also breeding many subdivided new tracks with rapid capacity expansion. For example, new power system investment, with the "double carbon" background and high investment efficiency, new power investment may become an important focus for the steady growth of infrastructure, and the sector elasticity is relatively large.
Jiang Junchen: judging from the current approval of special bonds, the future may be the joint efforts of new and old infrastructure. The probability of new infrastructure is the direction of long-term policy preference, and there may be phased opportunities for old infrastructure in the short term.
In terms of investment logic, the old infrastructure mainly focuses on repair and valuation. It is suggested to pay attention to the cement industry and construction industry with rising industry demand and high profit stability. The new infrastructure proposal focuses on areas such as digital economy, Internet of things, UHV and so on.
Luo yingyu: I suggest you pay attention to the following three directions: first, the early cycle of pipe / waterproof and other building materials. Second, the upstream steel sector, which is at the core of steady growth, has the characteristics of high elasticity, low value and high red rate, and responds quickly and violently to the downstream demand. The third is the infrastructure sector represented by central infrastructure enterprises. After the survival of the fittest in the past few years, this sector has improved its concentration, optimized its competition pattern, and directly benefited from the commencement of major infrastructure projects, directly forming income and profits.
via industry theme fund layout
pay attention to risks
China Fund News: for investors, how to participate in infrastructure investment through funds? How should I filter?
Xie Yi: infrastructure is a bit like military industry. In the long run, individual stock opportunities are greater than sector opportunities, which need to be accurate to individual stocks. If you take a portfolio or fund, you may have higher requirements for timing ability. It is suggested to focus on a wide range of investable funds, such as but not limited to infrastructure funds, because there is still room for adjustment after the steady growth stage.
Huo Huaming: due to the large differentiation in the infrastructure sector, ordinary investors can invest by index to share the growth results of the whole industry. At present, there are several indexes in the infrastructure sector. Investors can make investment decisions after comparing the sample selection range of various indexes, the top ten constituent stocks and other information.
Yang Kun: at the stage when the economy climbs from the bottom, the CSI dividend index with valuation at the bottom, pro cyclical and high dividend deserves attention.
Jiang Junchen: if investors want to participate in the investment in infrastructure, on the one hand, they can allocate industry index funds with related themes, but it should be noted that they have high concentration and relatively large fluctuation. On the other hand, the infrastructure sector in the Hong Kong stock market has more advantages than A-Shares in terms of valuation, and the safety margin is relatively high.
