AI Xiongfeng, senior strategic analyst: A-share energy transformation, manufacturing upgrading and the rise of innovative drugs are the most certain

After 30 years of development, China's capital market has made great progress in terms of market scale, system structure, development quality and opening level. At the present stage, the capital market is also undergoing profound structural changes.

Facing the coming 2022, what changes will take place in the capital market? What problems should be paid attention to in A-share investment? The reporter of the daily economic news (hereinafter referred to as NBD) interviewed AI Xiongfeng, a Sinolink Securities Co.Ltd(600109) Senior Strategic analyst. He pointed out that compared with the end of 2018 when the market sentiment was low, the current overall valuation center of A-Shares was moving upward, but the expected growth rate was also increasing. Peg rose from 0.7 at the end of 2018 to the current 0.9. On the whole, the valuation level of A-Shares was not high. Throughout the boom changes of the whole industry, energy transformation, manufacturing upgrading and the rise of innovative drugs are the three most determined directions for the high boom in 2022.

a new window to boost the economy has been opened

NBD: in the coming year 2022, what changes do you think are worth looking forward to in the policy of the A-share market?

AI Xiongfeng: since 2021, the prudent monetary policy has been neutral, and there is basically no incremental fiscal expenditure. The central economic work conference at the end of the year established a window for monetary policy adjustment. From the failure of the market expectation of RRR reduction after the central bank's press conference in October, to the reverie that the central bank's monetary policy implementation report did not mention the large liquidity gate in the third quarter of November, to the high-level re mention the "timely RRR reduction", followed by a comprehensive RRR reduction of 0.5 percentage points, a new window for policy marginal easing to boost the economy has been opened.

In terms of monetary policy, the central economic work conference has added "maintaining reasonable and sufficient liquidity" and removed the expression "maintaining the basic matching between the growth of money supply and social financing scale and economic growth, and maintaining the basic stability of macro leverage". On December 20, the central bank authorized the national interbank lending center to announce that the one-year LPR was lowered by 5 basis points to 3.8%; The LPR over 5 years was 4.65%, which remained unchanged. As an important wind vane of the interest rate market, LPR has "stood still" for 19 consecutive months. This decline may drive the financing cost of the real economy down and release the signal of increased counter cyclical regulation. In terms of fiscal policy, it is clearly proposed that infrastructure investment can be carried out moderately in advance.

From the perspective of investment, the orientation of Beijing stock exchange is to serve innovative small and medium-sized enterprises. Recently, it is proposed in the "14th five year plan" to promote the development of small and medium-sized enterprises, and strive to promote the formation of 1 million innovative small and medium-sized enterprises, 100000 "specialized and special new" small and medium-sized enterprises and 10000 "small giant" enterprises by 2025. Specialized and special new enterprises have great investment value. They are often one of the leaders in a certain subdivided industry, have strong competitiveness in the subdivided industry, and their growth is often relatively high. However, in the list of specialized and special new "little giants" of the Ministry of industry and information technology, there are 16 specialized and special new "little giants" among the 82 companies of the Beijing stock exchange. Therefore, we recommend to tap investment opportunities from the "little giant" specializing in special new products under the guidance of policies.

At the same time, the establishment of the Beijing stock exchange is also good for the securities sector. The pilot registration system of the Beijing stock exchange. After one year of listing, qualified listed companies of the Beijing stock exchange can transfer to the science and innovation board and the gem. The brokerage business and investment banking business of securities companies will be greatly expanded. Securities companies that can seize this treasure land of the Beijing stock exchange will have a certain investment value.

three directions of high scenery

NBD: what do you think of the overall valuation of a shares? Which sectors or industries are still attractive?

AI Xiongfeng: judging from the matching degree between the expected valuation and performance growth of the main A-share indexes, compared with the end of 2018 when the market sentiment is low, the current overall valuation center of A-share is moving upward, but the expected growth rate is also increasing. Peg has increased from 0.7 at the end of 2018 to 0.9 at present. On the whole, the valuation level of A-share is not expensive.

NBD: what investment themes do you think deserve our attention in 2022?

AI Xiongfeng: looking at the boom changes of the whole industry, energy transformation, manufacturing upgrading and the rise of innovative drugs are the three most determined directions for the high boom in 2022.

First of all, under the "double carbon" goal, the energy transformation continues to accelerate. Among them, the renewable energy industry chain such as wind power and electric vehicle industry chain continues to grow with high certainty. From the perspective of in-depth extension of the industry chain, the prosperity of subdivided fields such as photovoltaic modules, inverters, energy storage and new energy materials may continue to improve. In addition, industries such as power semiconductors, thermal management, connectors and on-board electronics and communications, which are backed by the electric vehicle and intelligent vehicle industry chain, may maintain rapid growth.

Secondly, with the transformation of high-quality development, manufacturing upgrading will continue to accelerate, of which intelligent manufacturing is the most clear direction. High certainty of long-term high growth in relevant high-end equipment, parts, industrial control automation and other fields.

Finally, the rise of domestic innovative drugs has accelerated in recent years. Around the innovative drug industry chain, APIs and intermediates, CXO and domestic innovative drugs may benefit from the boom extension of the industry chain.

In terms of new energy industry chain, there is a large expectation difference in the photovoltaic sector in the new energy industry chain. The market is mainly worried that the price rise in the upstream of the industry chain will affect the installed demand of downstream power stations. In the early stage, the industrial chain reached the limit of marginal demand cost tolerance through price rise, and after a stalemate for a period of time, the price of silicon wafers and components decreased at the end of the year, the negative feedback effect of demand price came as scheduled, and the price reduction of silicon wafers promoted the new balance of the industrial chain. In 2022, with the release of silicon production capacity and the decline of upstream prices, the profits of the industrial chain will be transferred to the middle and lower reaches, and photovoltaic modules and inverters may have a double-click. At the same time, in the wave of energy transformation, energy storage is an essential key link, and its development will further drive the improvement of renewable energy penetration. The largest marginal increment in the field of energy storage or electrochemical energy storage, especially in new energy fields such as wind power and photovoltaic, the wide application of energy storage is the only way for the transformation of new energy. At present, China's installed capacity of electrochemical energy storage has entered the stage of accelerated expansion, and industries related to the industrial chain may continue to benefit.

In terms of the electric and intelligent vehicle industry chain, with the continuous improvement of the penetration rate of new energy vehicles, the output is limited due to the lack of core in the early stage. At present, the vehicle inventory is at a new low in history. With the recovery of the supply chain, the demand for vehicle replenishment may support the prosperity of relevant industry chains. Especially in the stage of increasing penetration rate of electric vehicles and intelligent vehicles, and under the background of increasing penetration rate and localization rate, from the perspective of single vehicle value, the market space for power semiconductors, thermal management, connectors and on-board electronics and communication is further opened.

In terms of intelligent manufacturing industry chain, the draft of the 14th five year plan for intelligent manufacturing development clearly states that by 2025, manufacturing enterprises above Designated Size will basically popularize digitization, and key enterprises in key industries will initially realize intelligent transformation. By 2035, manufacturing enterprises above Designated Size will fully popularize digitization, and backbone enterprises will basically realize intelligent transformation. Intelligent manufacturing equipment, parts, industrial control automation and other fields may continue to receive policy support.

In terms of innovative drug industry chain, China's innovative drugs are still in the initial development stage, but with some domestic innovative drugs continuously approved overseas, domestic innovative drugs rise or enter the golden age. In terms of the number of innovative drugs in clinical trials at various stages in China, the number of innovative drugs in clinical phase I and clinical phase IV has accelerated in the past two years. Focusing on the innovative drug industry chain, API and intermediates, CXO and domestic innovative drugs deserve special attention.

three risk points require investors to be cautious

NBD: in recent years, institutional investors have gradually become the mainstream in the A-share market. Do you think the structure of A-share investors will continue to change in 2022?

AI Xiongfeng: retail investors still account for the largest proportion of transactions in the A-share market. It will take some time for institutional investors to become the mainstream of the A-share market. Before, we paid more attention to which market players contributed to the sustained high trading volume. At present, there is no exact data in the market, but some people believe that the quantitative fund contributed half of the trading volume, which is obviously exaggerated. According to the historical data of Shanghai Stock Exchange, retail trading volume accounts for more than 80% (the data will not be published after 2018).

In their latest working paper, Zhang Xiaoyan of Tsinghua University and others calculated that from January 2016 to the first half of 2019, the average turnover of retail investors accounted for 81%, while the market value of retail investors accounted for only 22%. In addition, institutional investors accounted for 17% of the market value and 17% of the turnover. It can be seen that for a long time, the proportion of retail transactions in the A-share market has continued to be more than 80%. Although retail investors will flow into the public fund market on a large scale in 2020, the decline of transaction proportion is expected to be limited. Among institutional investors, the unilateral transaction of northbound funds accounts for about 5%, and the transaction of public funds accounts for about 10% under the optimistic scenario.

NBD: we know that what the market fears most is the "black swan" or "grey rhinoceros" incident. At present, what potential risks do you think may arise in the market and need investors to be vigilant?

AI Xiongfeng: there may be three major risk factors for investors to be vigilant in 2022. Of course, they may not happen, but investors should be cautious.

First, the continuous downward performance growth of Listed Companies in the first half of 2022 is the consensus expectation of the market and will not become the core factor leading the market. However, in the annual report and quarterly report window in April 2022, we should pay attention to the potential risk that the enterprise's profit is lower than expected.

Second, there is still great uncertainty about whether the economy can stabilize and recover in the second half of 2022. Even if it rebounds, it is difficult to predict how big it will be.

Third, after the end of taper, the Federal Reserve has a high probability to increase interest rates, narrowing the space for China's loose monetary policy. At present, the market expects the Federal Reserve to raise interest rates 2-3 times in 2022, of which the first interest rate increase probably occurs in the second half of the year (as early as or in June), and the stage with the greatest impact on the market is when it wants to increase it. This probability occurs at a certain stage at the end of the second quarter and the beginning of the third quarter of 2022, when global risk assets may increase volatility. In the fourth quarter of 2022, with the implementation of uncertain factors such as interest rate increase, equity assets may be repriced.

(Daily Economic News)

 

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