Core view
At present, China is in a critical period of transforming its development mode, optimizing its economic structure and transforming the driving force of growth. The rapid adjustment of demand structure puts forward higher requirements for supply quality and level, forcing enterprises to transform to green, intelligent, high-end, safe and service-oriented aspects. Transformation investment has become the key to the future development of enterprises. Technological transformation has the outstanding characteristics of new technology, short construction period and quick effect. It is the core support of manufacturing investment. As an innovative form of industrial policy organization, chain leader production helps to accelerate the transformation of the whole industrial chain and strengthen the empowerment of industrial Internet platform. The growth rate of our manufacturing industry is expected to be 11.2% in 2021, which corresponds to the growth rate of our manufacturing industry. It is expected that the growth rate of our manufacturing industry is the strongest in 2021.
The transformation of growth mode and the switch between old and new drivers determine that enterprise transformation has become the leading direction
The economic growth mode and the change of industrial structure are the decisive forces affecting the development of enterprises. Since the 40 years of reform and opening up, China's rapid economic growth is essentially incremental expansion. With the help of leverage and large-scale expansion, China has achieved high growth rate, accelerated urbanization has laid the foundation for industrialization, promoted export with the help of the large-scale advantages of demographic dividend (quantity and structure dividend), and realized the large-scale expansion of made in China with the help of the global market The debt expansion of enterprises has driven the rapid development of infrastructure and real estate. Under the mode of leverage and high turnover, maintaining high investment growth and driving economic growth. The side effects of this rough growth model are significant, and economic transformation is imperative.
Since the implementation of the supply side structural reform, China's economy has gradually entered a new stage of transformation of growth mode, switching between old and new driving forces and adjustment of industrial structure. The 14th five year plan has established the goal of high-quality development. It requires deepening the supply side structural reform, establishing an effective system to expand domestic demand, firmly promoting factor marketization reform, reform and opening up and the International China dual cycle, This brings the requirements for industrial transformation, upgrading and optimization, which determines that transformation and upgrading will become the leading direction of enterprise development, and the demand for enterprise transformation investment will increase significantly.
How to view the trend and path of enterprise transformation?
Enterprise transformation is a fundamental change taken by enterprises in key technologies, process flow, management mode, business structure and marketing channels in order to better deal with the changes of internal and external environment. The ultimate goal is to improve quality and efficiency. We judge that the transformation of Chinese enterprises during the 14th Five Year Plan period will show three characteristics. First, the traditional manufacturing industry is gradually developing towards the policy requirements of "double substitution" of clean and electric power. Second, enterprises realize comprehensive system reengineering and carry out investment in technological transformation. Third, intelligent manufacturing and industrial Internet have gradually become important supports for enterprise transformation.
Theoretically, there are two paths for enterprise transformation. The first is to continuously upgrade and move forward in their existing industrial fields with the forefront of global industrial development, so as to expand and strengthen their main business. The second is the path of cross industry transformation, that is, diversified development. Diversification also has related or unrelated diversification, or the upstream and downstream extension of the industrial chain, or even completely different cross industry development. Diversification is a more difficult development strategy.
The most typical case is the transformation of enterprises to invest in the photovoltaic industry. On the one hand, the five power generation groups all bet on photovoltaic, and overweight new energy is the established transformation direction. In addition, the State Grid and China Southern Power Grid plan to increase the investment scale of wind power photovoltaic base construction projects. On the other hand, many enterprises unrelated to the photovoltaic industry chain have successively switched to the photovoltaic track, including household appliances, spinning clothes, shoes and hats, feed, food processing, stationery, leather, papermaking, etc., which are mainly distributed in silicon materials, silicon wafers, batteries, modules and other links. The reason is that the overall entry threshold of photovoltaic industry is not high, while the gross profit margin of photovoltaic industry is high. The competition in traditional industries tends to be white hot, and the profit space is greatly compressed. Many enterprises seek new profit growth points through transformation. In 2021, the installed capacity of renewable energy power generation in China will historically exceed 1 billion kw, and the installed capacity of wind power and photovoltaic power generation will both exceed 300 million KW. We expect that in 2022, more market players will seize the opportunities of photovoltaic industry brought by energy reform under the global dual carbon goal and realize business transformation through cross-border photovoltaic industry.
Dual carbon vision development goal catalyzes enterprise transformation
The realization of the "double carbon" goal will drive a series of basic research investment and promote the low-carbon, green and clean development of manufacturing industry. The focus of enterprise transformation is to continuously reduce the carbon emission level in the production process by optimizing the production process and adopting new energy in traditional industries. We tend to be strategically optimistic about the investment value of low-energy advanced manufacturing, high-tech industries and modern service industries. To achieve the goal of "double carbon", we need to focus on tackling the process and equipment problems of emission reduction and foreign exchange increase, optimize the energy structure and process flow structure through technological innovation, and speed up the upgrading of equipment and processes. At the same time, the enterprise will lay out low-carbon cutting-edge technologies and drive innovative investment in basic research, application development, trial production and improvement, industrial application and so on.
On enterprise investment behavior from the perspective of social capital operation
Enterprise investment is a kind of adjustment to the supply side to match the terminal demand. The purpose is to maintain production and operation, expand production scale, expand new development direction, improve technical level, make better use of production factors and improve labor productivity. Different investment purposes determine different enterprise investment. Since enterprise investment is often based on a variety of considerations rather than a single purpose, we use social capital operation to help us understand the different investment classifications of enterprises. Social capital operation can be divided into simple reproduction and expanded reproduction.
First of all, simple reproduction is the reproduction with the same production scale, which is driven by the operating investment of the enterprise. In order to maintain a certain scale of capital stock, the enterprise needs to add new investment to compensate the current depreciation, amortization and other losses, so as to maintain the normal operation of the enterprise. For example, if the depreciation of a certain kind of equipment expires in one year, it needs to buy new equipment every year.
Second, expanding reproduction can be divided into two categories. 1) expanding reproduction mainly through expanding production scale or expanding new direction. The former can be understood as the investment made by the enterprise to expand the scale, while the latter is the new investment required for the new direction of layout. Taking coal enterprises as an example, the former is to expand the investment from small coal enterprises to large coal enterprises, and the latter refers to the possibility for coal enterprises to expand the new investment direction, Layout of new energy business completely unrelated to coal.
2) connotative expansion of reproduction focuses on improving the technical level, promoting factor efficiency and improving labor productivity. It can be technology introduction, supply chain renewal and intelligent transformation based on industrial development, high-end layout to improve competitiveness, or "domestic substitution, independent and controllable" investment based on the safety and stability of the supply chain. In short, based on the logic of expanding reproduction, enterprise investment mainly falls in the investment of large-scale and expanding new business, as well as the new energy, intelligence, high-end, security and service-oriented industries.
Economic transformation drives enterprises to adjust their investment structure, and transformation investment is the key to the future investment of enterprises
The adjustment of economic growth mode and industrial pattern has a profound impact on the investment behavior of enterprises. The traditional extensive growth mode has led enterprises to pursue more "expansionary investment" (operational investment and large-scale investment) in the form of "horse racing enclosure". This investment behavior has promoted the rapid development of China's medium and low-end manufacturing industry and realized the large-scale expansion of export industrial chain in the early 21st century, To some extent, it also led to overcapacity after the subprime mortgage crisis.
At present, China's economy is in a critical period of transformation. A new round of global industrial revolution is in the ascendant. Economic transformation and industrial transformation drive the transformation investment of enterprises. We believe that transformation investment will be the key to the future development of enterprises. From the perspective of social capital operation, in addition to operational investment and large-scale investment, other types of investment can be regarded as enterprise transformation investment. Enterprise transformation investment is not constrained by the profit cycle. The expansionary investment of enterprises is highly related to the economic cycle and the profit status of enterprises, which has also become an important basis for judging the investment of enterprises according to the enterprise profit and the fluctuation of economic cycle in the past. The market also infers that if the profit cycle goes down, the willingness of enterprises to invest is low. We believe that enterprise transformation investment is not constrained by profitability and economic cycle. In our report "why can't we use profitability to predict manufacturing investment" at the end of March, we proposed that enterprise operation needs to adapt to the industrial development direction. If it doesn't, enterprise profitability will naturally deteriorate. Only enterprise spontaneous transformation can reverse the decline. Therefore, from the perspective of enterprise transformation and development, it is not "if the enterprise's profit is not good, the enterprise's investment is not strong", but "the worse the enterprise's profit is, the more it needs to increase investment to promote transformation".
Micro perspective on the transformation of "five modernizations" of enterprises to improve quality and efficiency
Enterprise transformation investment is mainly promoted in the following five aspects: green, intelligent, high-end, safe and service-oriented. 1) The transformation of new energy is a major expectation. We put forward the concept of industrial new energy in our annual strategy in November 2021. In the medium and long term, "new energy +" will eventually go deep into all fields of economy and society, and enterprises will make transformation investment based on this logic. The government work report emphasizes that "new renewable energy and raw material energy consumption will not be included in the total energy consumption control, and promote the transformation from" dual control "of energy consumption to" dual control "of carbon emission and intensity". In the medium and long term, "new energy +" will eventually go deep into all fields of economy and society. In the short term, it will mainly drive the reconstruction of industrial system, supplemented by construction industry and some tertiary industries. We believe that in addition to the new energy industry, in the industries represented by electronics, chemical industry, machinery and construction, the "new energy +" field that has not been fully recognized will contain significant expectations.
2) intelligent transformation is a trend slow variable in the medium and long term. Industrial intelligence is the process of gradually replacing human beings by artificial intelligence on its basis, not only in physical labor, but also in mental labor. Industrial intelligence is the future development trend, and the intelligent transformation and development of industry is not uncommon in government documents, but the official has not given a clear definition. We believe that industrial digitization is the increase of output and efficiency brought by the application of digital technology and data resources to traditional industries, and the integration of digital technology and real economy. We suggest paying attention to the transformation investment of enterprises based on digitization, industrial automation and intellectualization, especially some racetracks with safety margin and high technical barriers, such as smart cars, smart homes, smart appliances, smart buildings, smart medicine, smart elderly care, smart education, etc.
3) high end transformation of enterprises, focusing on the development of strategic emerging industries. China's share and competitiveness in the global value chain and international division of labor system are not strong. In order to realize industrial transformation and upgrading, the high-end transformation layout of enterprises is becoming more and more important. Based on major technological breakthroughs and major development needs, strategic emerging industries have the characteristics of intensive knowledge and technology, low consumption of material resources and great growth potential. According to our calculation, in the first three quarters of 2021, the cumulative growth rate of capital expenditure of biological industry, new material industry and digital creative industry was high, reaching 107.3%, 104.9% and 103.4% respectively. High end equipment manufacturing industry, energy conservation and environmental protection industry and new generation information technology industry followed, and the cumulative growth rate of capital expenditure was 63.7%, 53.3%, 51.7% and 47.6% respectively.
4) enterprises accelerate safety transformation. Global trade and investment protectionism is becoming more and more intense, and the tendency of Gu in developed economies is prominent. The covid-19 pneumonia epidemic has exposed the vulnerability of the global supply chain. Objectively, Chinese enterprises are required to speed up the industrialization in the short board field and the iteration of breakpoint technology, and carry out capacity layout around the world. For example, in 2020, the epidemic had a great impact on consumption and a substantial accumulation of industrial inventories. Thanks to the supply advantage, China's exports achieved an unexpected growth. Machinery, textile and clothing, light industry and other industries actively expanded overseas markets and reversed the adverse situation; In 2018, the trade friction between China and the United States led to a significant increase in tariffs, squeezed the profit space, had a strong impact on medium and low-end manufacturing enterprises, forced enterprises to transform to sea, and led a large number of Chinese enterprises to move to Vietnam, Cambodia and other countries to bypass tariff restrictions.
5) service oriented transformation of manufacturing industry. Manufacturing service-oriented means that manufacturing enterprises provide customers with a more complete "combination package" including products and services. Manufacturing service-oriented is the integration of service-based manufacturing and service-oriented manufacturing. It is the integration of product economy based on production and service economy based on consumption. The 2022 government work report first proposed "enhancing the core competitiveness of the manufacturing industry". In recent years, China has accelerated the development of service-oriented manufacturing in the direction of specialization, collaboration and intelligence. Many manufacturing enterprises have extended from the original simple manufacturing end to the front end of the industrial chain and to the back end of the industrial chain. On the whole, the service level of China's manufacturing industry is obviously low, and the proportion of service business income of most manufacturing enterprises in the total income is still relatively low. We believe that the service-oriented transformation of manufacturing industry improves its competitiveness by enhancing the service function of all links of the industrial chain.
"Chain length system" has built a new model for enterprise transformation
The chain leader system drives industrial upgrading through enterprise transformation, which can build the upstream and downstream enterprises of the industrial chain, form a reasonable competition and cooperation relationship, present a horizontal expansion or extended pattern of professional division of labor, and realize the organic integration of industrial chain, value chain, innovation chain, capital chain and talent chain through mutual spillover effect.
Take Ji'an City, Jiangxi Province as an example, vigorously implement the industrial chain length system and strengthen technical grafting. First, promote R & D innovation. Adhere to the principle of taking enterprises as the main body and integrating industry, University, research and application, and build public innovation platforms such as electronic information research institute, high-level talent Industrial Park and industrial Internet Industrial Park. Second, promote technological transformation and equipment renewal. Formulate and issue the three-year action plan for technological transformation and upgrading of industrial enterprises in Ji'an City, implement more than 150 industrial technological transformation projects every year, cultivate a number of benchmark enterprises for technological transformation, and lead the technological transformation of industrial enterprises to a wider field, deeper level and higher level. Third, promote model innovation. Vigorously guide enterprises to link the market with digital empowerment. For example, support existing manufacturing enterprises to develop service industries such as industrial design, inspection and testing, and realize the expansion of "manufacturing + service".
Focus on the pulling effect of enterprise transformation investment in 2022 - steady growth of new manufacturing
In 2022, under the background of triple pressure on China's economy and strong demand for steady growth, manufacturing investment is expected to become a strong variable for steady growth over infrastructure and real estate. We believe that there are two factors driving manufacturing investment to maintain a high growth rate. On the one hand, industrial policies such as strengthening the chain, supplementing the chain, fixing the chain and stabilizing the chain will drive technological transformation investment; On the other hand, it is the industrial infrastructure reconstruction project, which focuses on the transformation of the manufacturing industry to new energy and intelligence, which is expected to drive the capital expenditure of plant, machinery, equipment and so on. We expect that driven by enterprise transformation investment, the growth rate of manufacturing investment is expected to reach 11.1% in 2022.
Risk tip: global inflation exceeds expectations; Global monetary policy tightened more than expected; China US strategic game exceeds expectations
