Original Title: Rich in structural opportunities
● Our reporter Wang Hui Wang Yulu
A-share long-term outlook is optimistic
Since the beginning of this year, the operating environment of the A-share market has undergone major changes. While the overall center of gravity of the large market capitalization white horse stock sector has been adjusted back and the internal division continues, market volatility and trading volume have continued to maintain high levels. In this context, regarding whether the A-share investment logic has changed and the mid-to-long-term market performance, Guo Feng, chairman of Shifeng Asset Management, said that the investment logic of the capital market is still an investment under the industry’s boom. Historically, most of the time, industries with high prosperity have performed well in the A-share market. In the end, no matter how the market changes, the overall market will return to “endogenous leadership and growth.” In this context, it is necessary to look for investment targets that can achieve high growth and performance in relatively high-prosperity industries. In addition, Guo Feng believes that China is currently moving from a big manufacturing country to a strong manufacturing country, and big consumption is also a sustainable, relatively stable track with good competition patterns and barriers. Therefore, the mid-to-long-term performance of the A-share market is relatively optimistic, and the market is expected to spiral upward in the long-term dimension.
Panjing Investment Chairman Zhuang Tao said that from a long-term perspective, the loose monetary environment may continue. In this situation, there is no reason not to be optimistic about the equity market. The problem facing the current market is that short-term valuations are relatively high, and the phased adjustment of the market does not mean the dissipation of investment enthusiasm. The mid-to-long-term trend of A-shares is worth looking forward to.
From the perspective of economic fundamentals, Min Yu, CEO of Runhui Investment, believes that China is currently in an excellent period of development, and my country’s influence in forward-looking industries is increasing substantially. Once the industrial scale of photovoltaics, new energy, AI and other fields is doubled, costs will drop proportionally, thereby reducing the cost of the entire industrial chain and laying a solid foundation for the sound development of manufacturing and foreign trade in the next 5 to 10 years. Therefore, I am very optimistic about China‘s medium and long-term development trends.
Analysis by Liang Hui, general manager of Gathering Capital, is that in the medium term, the A-share market is expected to remain a “slow market,” and it is difficult to see the overall ups and downs of the previous market performance. This will be good for investors in the long run.
Looking for high-performance growth targets
Specific to the fourth quarter and early next year, will the market style change? How to configure on the industry sector?
In this regard, Guo Feng said that the essential investment logic of the capital market is still investment under the industry’s prosperity. From a historical perspective, most of the time, industries with high prosperity that year performed well in the A-share market. We should look for investment targets that can achieve high growth and performance in relatively high-prosperity industries.
Zhuang Tao said that the characteristics of the capital market and the entire economy in recent years have changed significantly compared to 20 years ago, that is, “differentiation.” With the increase in the overall economic complexity and the survival of the fittest for many years, the differentiation between industries and between enterprises within the industry has reached a high degree, which is a global feature. Zhuang Tao is optimistic about emerging industries and industries that are in line with the direction of China‘s economic and industrial upgrading, especially manufacturing. “Emerging directions may have higher valuations, but under the background of loose liquidity, the market will have higher tolerance for stock valuations. The earnings growth of related companies in these directions is worth optimistic.” Zhuang Tao said.
Liang Hui said that there may be investment opportunities in hard core technology in the future, and industries such as independent innovation, semiconductors, and computers are worthy of attention. Min Yu believes that in the next two years, China‘s artificial intelligence may be a brand-new track, and some of these segments can be focused on.
On September 28, the “2021 Golden Bull Asset Management Forum and Guosen Securities Cup·The 12th China Private Equity Golden Bull Award Presentation Ceremony” hosted by China Securities Journal was held in Shanghai. A number of Taurus private equity helms conducted in-depth exchanges on the topic of “New A-shares under trillions of transactions”. Participants in the discussion believed that despite internal and external uncertainties, the long-term performance of the A-share market was generally optimistic. At the same time, structural investment opportunities in the future market will remain abundant.