“The broad manufacturing industry is treated according to four categories: new materials, core parts, key components and complete equipment, rather than the traditional industry division.”
“After the capital market has fully explored and generously valued each ‘track’ in the past few years, the ‘outlet of demand’ is becoming more and more scarce. The ‘difference in supply capacity’ between different companies in the same industry may be the more important main contradiction in the capital market in the future.”
“Under the leverage of technology and capital, the compound interest effect of time is huge. The differentiation between companies is the real ‘password’ of industrial change and stock market.”
Recently, Zhuo Liwei, chief research officer of Gaoyi assets and senior fund manager, elaborated several promising directions in 2022 in communication with channels. Zhuo Liwei also revealed two key logics for future investment.
review 2021: challenging
Zhuo Liwei said that 2021 is a challenging year. On the one hand, the macro environment is complex and changeable. On the other hand, there is a great differentiation in the valuation of the capital market. There are great differences in the rise and fall between industries and individual stocks. The change of market style and the differentiation of valuation are very extreme.
Zhuo Liwei believes that no matter what year’s investment strategy, it is difficult to accurately predict these major changes. Therefore, no matter whether the environment changes or not, we should start from the long-term logic of industrial development and technological progress, strive to grasp the general trend of the industry, the micro core competitiveness and business rhythm of enterprises, business characteristics and other factors, and replace the judgment of the trend of the capital market with valuation evaluation.
outlook 2022: optimistic about these areas
looking forward to 2022, Zhuo Liwei believes that there may be good structural opportunities in broad manufacturing, consumer services, Internet, medical and health resource products and other fields.
generalized manufacturing industry: treat the generalized manufacturing industry according to the four categories of “new materials, core parts, key components and complete equipment”, rather than the traditional industry division. In these four areas, we can find many subdivided leading or vertically integrated companies.
consumer services: although the performance of consumer services related stocks is relatively poor in 2021, there are still many structural opportunities for supply side optimization and innovation in large consumer industries, and 2022 may be a better time for reverse investment.
Internet: some companies in the Internet industry have good valuation attraction, and there are likely to be good reverse investment opportunities in the future.
medical and health: first, in innovation related fields, gene therapy and innovative devices are still in the early stage of penetration improvement; Second, under the dual logic of global industrial division and medical insurance payment pressure, some API and cdmo enterprises have gradually accumulated good systematic capabilities in chemical synthesis technology, EHS and GMP, and there are barriers to the production capacity with the dual capabilities of fine chemicals and Drug Certification; Third, the products and services related to self payment and consumption upgrading are a long-term and sustained growth trend.
upstream resource products: companies integrating global resource layout, engineering technology accumulation and midstream material manufacturing capacity deserve attention. For example, some industrial metals related to the new demand of the downstream new energy vehicle industry. Due to the continuous contraction of global new capacity investment and capital development support in the traditional energy industry in the past few years, this trend may turn in 2022, and relevant resource and technical equipment companies also deserve attention.
From a macro perspective, the policy in 2022 may focus more on the direction of economic growth, and the liquidity of the capital market will remain abundant. The risk may be more the valuation risk of subdivided industries and individual stocks, especially in some industries with rapid growth and rapid expansion of upstream and downstream capacity, some companies lack core technology and systematic ability to continuously accumulate, and excessive capital expenditure may form inefficient overcapacity in more fierce competition in the future and face the pressure of declining profitability, This leads to the double killing of performance and valuation.
Zhuo Liwei believes that the next few years may be in a macro complex environment, and the bottom-up fundamental research combining the meso view of the industry and the micro view of the enterprise may be more effective. “The macro must be accepted, but we can make a difference at the micro level.”
the relationship between the two groups needs to be clarified
Looking at the investment in the next few years at the current time point, Zhuo Liwei stressed that the two groups of relations need to be clarified: focusing on accumulation in “innovation and accumulation” and supply in “demand and supply”.
the first is the relationship between innovation and accumulation: while the capital market has very generous expectations and valuations for business model innovation and technology innovation, we should also see that some excellent companies have gradually formed in process technology, production organization mode Systematic ability in R & D and product chemical engineering, especially in some fields where the market is prone to bias and looks more like traditional industries.
the second is the relationship between supply and demand: after the capital market has fully explored and generously valued each “track” in the past few years, the “outlet of demand” is becoming more and more scarce. The “difference in supply capacity” between different companies in the same industry may be the main contradiction in the future capital market. Zhuo Liwei believes that we need to abandon the way of thinking such as “growth and value, cycle and non cycle, emerging and tradition” and go deeper into the micro key links such as subdivided industry and business attributes, technology and process, products and experience, people and organization, entrepreneurship and corporate governance structure, so as to grasp the core competitiveness and moat of different companies. Zhuo Liwei stressed that the in-depth study of “supply differences” may be the key to investment in the next few years.
(China Securities Journal)
