Industrial strategy: the combination of “Big Innovation 50” targets
Source: XYSTRATEGY Investment Highlights ★ “Big Innovation 50” Portfolio: Directions for the allocation of large innovation sectors worthy of long-term attention-The Prosperity Strategy team has been forward-looking since 2017, and has pointed out the opportunities related to the major innovation sectors.
The 2018 strategy “Great Innovation Times”, the second quarter of 2018 strategy “Big Dance of Social Innovation and Core Assets”, the second half of 2018 investment strategy “Spring of Great Innovations”, the 2019 strategy “Restructuring Innovations Great Times” and periodsThe special report and conference call conducted high-frequency and continuous review of investment opportunities in the sector.
-Combining the opinions of industry experts, we have selected and merged the “Big Innovation 50” portfolio.
★ At present, the big innovation sector has this catalyst-laying the foundation for the intelligent interconnection of all things, and paying attention to the big innovation industry chain.
Innovative development promotes the “To C” for everyone to replace the new “To B” for the intelligent interconnection of everything.
The rapid development of the industry is inseparable from the large-scale expansion of supporting infrastructure.
At the same time, the infrastructure required for the large-scale development of innovation in the future is continuously improved.
-Innovation and growth industries make up for shortcomings, and policy scale is expected to continue to support.
Fair pledge relief relief is ongoing, and the corporate liquidity environment has greatly improved.
R & D decomposes, the potential incremental decrease and further improvement of corporate fundamentals.
Refinancing policies have been relaxed, market restrictions have been relaxed, and the securities market has been activated.
★ The big innovation industry chain focuses on the industry-the network foundation of the big innovation industry chain: The advent of the 5G era is driving the development of the communications and terminal industries.
In the field of communication, we focus on the 4G / 5G wireless side, the main communication equipment on the optical transmission side, optical devices, especially optical modules, upstream devices, and downstream optical communication equipment.
The electronics field focuses on industries such as PCBs, antennas, RF front-end devices, and panels.
-Key applications of the large innovation industry chain: The domestic market has a broad prospect for development, and cloud computing, localization, and financial technology are expected to usher in demand for scale.
-The core hardware of the big innovation industry chain: the development of high-end manufacturing drives the supporting investment first, focusing on semiconductor equipment, lithium battery equipment, automation and industrial robots.
-Technical guidance for the large innovation industry chain: military industry that is expected to usher in a three-year performance turning point, an innovative drug with a tortuous road but a bright future.
The “Big Innovation 50” portfolio of the report-issuing strategy team that deserves long-term attention has been forward-looking since 2017, and promptly pointed out the opportunities related to the big innovation sector.
In the 2018 Annual Strategy of “Great Innovation” released in November 2017, we proposed that the interior is at the beginning of a new round of innovation cycles, and these conditions have been basically fulfilled.
This round of innovation is mainly characterized by the technological innovation of large companies, and is catalyzed by six factors: big country strategy, infrastructure, innovative talents, leading trends, first-level pilots, and policy guidance.
At several important times since 2017, the Xingzheng Strategy Team has continuously recommended the direction of “big innovation” and has repeatedly sorted out related investment opportunities.
In the second quarter of the 2018 strategy “Big Dancing of Big Innovation and Core Assets”, we mentioned that under the policy warming, capital market support for big innovation is rapidly increasing, and the main direction of big innovation is more clear.
In the investment strategy “Spring of Great Innovation” in the second half of 2018, we believe that the cycle of innovative growth stocks can be seen in 2-3 years. In the broad perspective, 2018 is just the “spring” of great innovation. Spring needs to be actively planted in order to enjoyIt will be midsummer and autumn harvests in the future, but it will be warm and cold in spring and it is not yet in full bloom. You need to have a high understanding of fundamentals and grasp the changes in trends.
In the 2019 strategy “Rebuilding the Great Era of Innovation”, we once again predict that the current era is both the era of return and the era of innovation.
2019 is a year of succession, with market fluctuations less than 2018 and more opportunities than in 2018. Grasp China’s transformation and global restructuring to enhance opportunities brought by risk substitution.
From a global perspective in the medium and long term, the current equity market in China will be a rare opportunity for strategic deployment.
Between these important moments, we have repeatedly combed through specific investment directions through special research, conference calls and other forms.
Does the big innovation sector have some kind of target worthy of long-term attention?
With the gradual implementation of the policy, the market risk appetite has also been picking up, and some targets have already had a certain allocation value.
Therefore, we have sorted out and selected the major innovation targets suggested by various industries, and built the “Great Innovation 50”, a selection combination worthy of long-term attention.
What are the current catalysts for the big innovation sector?
Build the foundation for the intelligent interconnection of all things, pay attention to the innovation and development of the large innovation industry chain, and promote the “to C” for everyone’s interconnection to the new “to B” replacement for the intelligent interconnection of everything.
Interconnection can be divided into three categories: people-to-people connections, people-to-things connections, and things-to-things or machine-to-machine connections.
In the past, whether it was social or e-commerce, advertising or video development, in fact, all benefited from the development of the “to C” end of people.
In the context of the Internet traffic dividend gradually peaking and the development of the “to C” end approaching transformation, intelligent interconnection of everything represented by machine intelligence, industrial Internet, and intelligent manufacturing is the general direction of future innovation and development.
For devices, intelligent interconnection will become the new “To B”.
The rapid development of the industry is inseparable from the large-scale expansion of supporting infrastructure.
In 2008 and 2012, the response to the international financial crisis intensified the investment in infrastructure construction, which is the foundation for the future development of the express logistics industry.The performance improvement and popularity of smartphones since 2010, and the scale construction of 3G / 4G networks have created conditions for the rapid development of mobile Internet, mobile video, and online video markets.
Analogous to the past, the infrastructure required for the future development of innovation in the field is constantly improved.
5G in the field of communications, cloud and big data in the field of computers, equipment manufacturing in the fields of semiconductors and new energy, etc., the infrastructure required for interconnection is constantly expanding, and the opportunities for the development of the new “to B” industry chain are constantly increasing.Emerged.
Innovation and growth industries make up for shortcomings, and policy priorities are expected to continue to support innovation and growth in the field. Favorable policies continue, and it is expected to continue to land in the future to solve worries for enterprises.
The most important issue to be resolved in the near future is fair pledge relief.
A shares are almost “no shares and no bets”. From the perspective of the nature of the enterprise, the proportion of private equity pledged by private enterprises exceeds that of state-owned enterprises. From the perspective of sector distribution, more privately-owned small and medium-sized enterprises are distributed.Medicine and so on are the direction where pledge accounts are relatively high.
After the equity transfer certificate occurred, the decision-making level and the supervisory level have stated their positions. Local governments, insurance companies, and securities firms have quickly followed up and invested to formulate assistance plans.
The local government contributed gigabytes, insurance assets under management amounted to 78 billion yuan, and brokerage asset management plans were in the order of 100 billion yuan.
These policy support coupled with the recent market rebound, especially the rebound in the growth of equity pledged redemptions, have been more and more favorable, and the equity pledged detention bureau has gradually replaced.
The spread of liquidity risks was effectively prevented, and corporate equity pledges began to enter a substantive solution phase.
Refinancing policies have continued to relax.
On October 12, the China Securities Regulatory Commission issued the “Related Questions and Answers on Listed Companies Issuing Shares and Purchasing Assets While Raising Supporting Funds and Relevant Funds (Revised in 2018)”, which came into effect on the date of issue.
The more noticeable purpose of this revision is to relax the use of refinancing funds, and provide for the use of matching funds to supplement the company’s working capital and repay debt obligations, the proportion of which exceeds 25% of the transaction price;%.
In 2016, relevant documents supplemented liquidity and paid off debts.
On November 9, the CSRC revised the corporate financing supervision requirements again, further relaxing the proportion of companies used to supplement the company’s working capital, repayment of debt, and refinancing intervals. Securities can directly support the improvement of corporate cash flow and focus on supporting innovative companies.
At the current moment, relaxing the use of refinancing can always supplement new sources of liquidity in the context of tight liquidity of the enterprise. It can reduce financing costs and leverage through the enterprise to prevent large-scale liquidity risks.
The deduction of R & D expenses will reduce the potential incremental increase in the future and further release the corporate innovation vitality.
On September 21, 2018, the Ministry of Finance, the State Administration of Taxation, and the Ministry of Science and Technology issued the “Notice on Increasing the Proportion of Research and Development Expenses before Taxes,” stipulating that the period will be from January 1, 2018 to December 31, 2020.75% of the actual incurred amount is added and replaced before tax; if an intangible asset is formed, it is amortized before tax at 175% of the cost of the intangible asset during the above period.
The pre-tax deduction ratio has been increased from 50% to 75%.
Based on the net profit of listed companies in 2017, under rough calculations, the addition of research and development expenditures will replace the increase in profits of all listed companies with research and development expenditures1.
6%, of which military, communications, computers, machinery, electronics and other advanced manufacturing industries in 2017 increased profits thicker proportion.
In terms of minimum deductions, we assume that the specific measures for the phase-out of the third and second steps will be to reduce the standard tax rate from 16% to 13%, and the preferential tax rate from 10% to 6%. The original 6% preferential tax rate remains unchanged.
Overall, the performance of A-share listed companies will increase by 250 billion yuan, and profits will increase by 5 percent.
From the perspective of different company attributes, state-owned enterprises (including local and central government) will benefit significantly from the replacement of “three and two”. It is expected that the scale of performance increase will reach 150 billion yuan, which will account for the increase in performance of listed companies due to excessive tax reduction.We suspect that most of the central SOEs are manufacturing industries; the scale of private companies’ performance increase is about 560 billion, accounting for 25% of the total performance increase of super-listed companies, second only to state-owned enterprises.
But in terms of efficiency, the percentage of collective enterprises’ performance increase is the highest, close to 20%, and the remaining state-owned enterprises and private enterprises are about 8%.
A-share manufacturing companies are picking up growth in construction and fixed assets.
In 2018Q3, the growth rate of many projects under construction that replaced the petroleum and petrochemical manufacturing industrywas 10.
82%, has risen for the fifth consecutive quarter, and the previous growth rate of fixed assets has also rebounded to 6.
Considering that the construction in progress is about one year to one and a half years ahead of fixed assets, the growth rate of construction in progress at that time was experiencing a bottoming out.
Therefore, these data show that the growth rate of fixed assets in the future may also enter a continuous recovery channel.
Relevant policies support efforts to maintain the growth rate of manufacturing companies.
The “manufacturing industry” here includes coal, petroleum and petrochemicals, non-ferrous metals, steel, basic chemicals, building materials, defense industry, machinery, power and public utilities, power equipment, automobiles, home appliances, light industry manufacturing, and electronic components, Communications, food and beverage, medicine, textiles and clothing a total of 18 CITIC Tier 1 industries, than the non-financial petroleum and petrochemical industry integration.
The major innovation industry chain focuses on the network foundation of the industry industry chain: the advent of the 5G era to promote the development of the communications and terminal industry. The 5G network foundation: operators start to build 5G.
In the first quarter of 2017, China Unicom launched an unlimited data package with only 15% of 4G network utilization.
China Telecom followed up in September 2017.
2018Q1 In the context of the State Council’s request to continue to “speed up and reduce fees”, China Mobile joined the unlimited data package in April 2018.
In the third quarter of 2018, the DOU of all mobile users of China Unicom was about 6.
45GB, which is 2 in the same period in 2017.5 times.
The DOU for all mobile users of China Mobile in the third quarter of 2018 was about 4.
6GB, which is 3 in the same period in 2017.
After the telecommunications network reaches a maximum of 70%, it must be expanded in order to avoid network congestion.
The unit traffic cost of 5G is only 1/10 of 4G. With the upper limit of the capacity limit of 4G network, 5G has become the natural choice.
4G / 5G wireless side, optical transmission side communication master equipment, optical devices, especially optical modules, upstream devices, downstream optical communication equipment and other related companies promote continued benefits.
5G network core component end: The rise of the Internet of Things is expected to directly drive the growth of the MEMS industry.
The characteristics of 5G networks with large capacity, low latency, and wide coverage are that people-to-people, people-to-things, and things-to-things interconnection are possible.
The connection between people is “billion”, and the connection between things is “billions”. The number of connected devices required by people and things, things and things far exceeds the situation of people-to-people interconnection.
The IoT terminal not only needs MEMS filters with “wireless connection” as its core function, but also requires a large number of MEMS sensors that sense the surrounding environment, which is also the basis of device intelligence.
The demand for manufacturing highly biological MEMS filters and MEMS sensors under the Internet of Things is expected to grow rapidly.
Yole predicts that the global MEMS market size will reach 17 in 2017-2023.
The 5% growth rate will increase from US $ 11.8 billion in 2017 to US $ 31 billion, and the amount of reorganization will be 26.
5G network terminal equipment: In the long term, the pull of 5G and automotive electronics to the terminal equipment industry will gradually emerge.
The domestic 5G construction is expected to proceed smoothly. Spectrum will be issued at the end of 2018, and a license will be issued in 2019.
OPPO, VIVO, and Xiaomi are all expected to release 5G mobile phones in 2019. The three major operators are actively trial-commercially, and they are expected to start a new wave of smartphone replacements.
Smart phone RF front-end will achieve both volume and price.
High-frequency transmission has higher requirements for the number and technology of RF devices. It is expected that the cost of 5G RF will exceed three times that of 4G mobile phones. The main value increments include BAW filters, inductive gallium elements, antennas, LCP materials and other fields.
PCB is expected to become a sub-industry driven by protected 5G to drive elastic resonance, followed by antennas, RF front-end devices, panels and other industries.
Key applications of the industry chain: cloud computing, localization, etc. are expected to usher in scale demand. Cloud computing: Accelerating penetration brings Iaas / SaaS opportunities across the industry chain.
The cloud computing market has surged in recent years. Both the market size and the maturity of the technology have shown a rapid increase. According to Gartner’s prediction, the global cloud computing market will reach a scale of 411.4 billion US dollars in 2020.
The advantage of cloud computing technology is that it can effectively guarantee voluntary and efficient utilization by establishing a flexible resource sharing pool.
However, at present, domestic cloud computing is mainly based on “To C” terminals such as games, video, e-commerce and social networking.
With the gradual expansion of the financial and medical, industrial and other physical industries, cloud computing is expected to usher in faster growth in the new “ToB” field.
Medical informatization: policy promotion + gradual expansion, which is expected to continue a high prosperity.
Medical information technology takes electronic medical records as the core, and through the 武汉夜网论坛 information technology, realizes the informationization of multiple business lines in the hospital, and finally achieves the purpose of prompting and assisting clinical diagnosis and treatment based on big data.
On August 28, 2018, the “Notice on Further Promoting the Informatization Construction of Medical Institutions with Electronic Medical Records as the Core” issued by the Japanese National Medical Administration and Hospital Administration requires that all tertiary hospitals in the country reach Level 4 of electronic medical records in 2020Above level.
As of 2018, the average application level is limited to 2.
At level 11, there is still much room for improvement.
The policy time is expected to bring tens of billions of levels of demand for medical informatization.
Localization substitution: The performance is gradually approaching.
Chinese market companies attach great importance to the construction of independent brands, and the consciousness of being localized is gradually increasing. The government is gradually increasing its efforts to maintain domestic companies’ competition and competition in the market, thereby promoting the formation of a complete industrial chain and the realization of the standardThe right to speak.
Some sub-sectors and fields have already surpassed their competitiveness and even gained a higher market share in the international market.
In the field of high-end hardware, there are certain technical differences between domestic and foreign manufacturers.
However, areas such as military, national defense, aerospace, and electricity that have higher requirements for information security have taken the lead in implementing domestic substitution.
In the memory and X86 server industries, domestic brands have participated in the competition and began to show their strengths in overseas markets.
The technology of domestic brands of basic software is becoming more and more mature, and domestic middleware, databases, operating systems, etc. have competed for a certain market space.
There are a lot of application software, management software represented by ERP, security protection software represented by firewall / VPN, and office software, etc., which have shifted market competitiveness. Artificial intelligence: an important engine for a new round of IT revolution.
1) In recent years, the country has paid close attention to the development of the artificial intelligence chip industry and has successively issued a series of industrial support policies.
The “White Paper on Artificial Intelligence Standardization (2018 Edition)” newly released in 2018 announced the establishment of the National Artificial Intelligence Standardization General Group and the Expert Advisory Group, which is responsible for overall planning and coordination of artificial intelligence standardization work.
In the context of both the artificial intelligence and the chip industry as national-level strategies, the AI chip industry is trying to lead China’s “core” forward.
2) Capital promotion is another important factor for the rapid development of AI chips.
Initially, major domestic AI chip production research participants have obtained large amounts of financing on many occasions.
A large amount of capital investment has accelerated the research and development process of AI chips, and further promoted the expansion of the AI chip market.
After 2015, a number of AI chip startups have emerged, and some unicorn companies have also been born.
Driven by policy and capital, the domestic AI chip market is expected to reach US $ 5.2 billion in 2021, with an annual compound development rate of 53%.
BAT has successively deployed the field of unmanned driving, which has driven traditional car companies to enter the market and accelerate the commercialization of AI landing applications.
Fintech: Technology empowers finance and demand is expected to pick up.
The requirements of the “New Asset Management Regulations” to establish independent subsidiaries are expected to drive supporting IT construction.
The accelerated implementation of supply chain finance and blockchain technology will gradually bring about commercial value.
An important one of the new rules on asset management is to require commercial banks with securities investment fund custody business qualifications to set up subsidiaries with independent legal person status to carry out asset management business.
At present, there are 27 domestic commercial banks with qualifications for custody. According to requirements, independent subsidiaries need to be established to carry out asset management business before the end of 2020, and the corresponding IT construction is likely to be completed before this deadline.
Asset management subsidiaries need to go online with core templates such as consignment systems, settlement systems, investment trading systems, and estimated accounting systems. The total investment is expected to be around 40 million (software, hardware, operation and maintenance, etc.).
The 27 custodian banks expect the total plan to exceed 10 billion.
To meet the new regulatory requirements, other banks, funds, trust companies, insurance and other financial institutions will also add procurement modules or upgrade inherent wealth management and variable modules, and the corresponding demand will increase in the next three years.
We conservatively estimate that the new capital management regulations will bring more than 2 billion new expenditures to the financial IT industry.
Hang Seng Electronics currently has 158 banking customers, and its overall wealth management accounted for 70%. The related business will be greatly affected by the new regulations.
The formal introduction of the new rules on capital management will significantly promote the launch of new systems and the upgrading of built-in systems in the financial IT industry in the next three years.
Many financial institutions will put forward new IT construction requirements in order to meet the requirements of the new asset management regulations, which will help increase the business volume of financial IT suppliers such as Hang Seng Electronics.
The core hardware of the industrial chain: the development of high-end manufacturing drives supporting investment to advance semiconductor equipment: the transfer of production capacity to the mainland releases a lot of demand.
According to the latest report issued by the International Semiconductor Equipment and Materials Industry Association SEMI, the world is currently in the planning or construction stage and is expected to be in 2017?
Approximately 78 semiconductor wafer fabs will be constructed in 2020, of which 30 are in China.
Finally, the total investment scale of the 12-inch wafer fab that was under planning and construction in China last year1.
07 trillion, corresponding to about 700 billion in investment needs for future equipment.
In 2018, the size of the semiconductor equipment market in mainland China is expected to exceed that of China’s Taiwan market, reaching US $ 11.8 billion, an increase of 43 over the same period.
In addition, domestic equipment manufacturers have matured a number of core process production equipment for 28nm process processors, and they have the conditions for volume. Some manufacturers’ 14nm equipment has entered customer production lines for verification. In 19 years, domestic semiconductor equipment companies are expected to continue volume.
Lithium battery equipment: Global giants are accelerating the construction of China’s lithium battery capacity, which is expected to bring secondary growth.
Under the dual stimulation of policies and the market, the demand for new energy vehicles has steadily increased, and the penetration rate will continue to increase in the future.
As the world’s largest new energy vehicle market, China’s industry development trend continues to increase. It is expected that China’s new energy vehicle output will grow at an average compound growth rate of over 42% from 2017 to 2020. In 2020, the output will exceed 2.2 million units, and gradually increase the amount of charged bicycles.Increase, corresponding to the lithium battery demand to reach 116Gwh in 2020, with an average annual compound growth rate exceeding 51%.
Under the background of increased concentration, the right-side battery cell companies, high-nickel battery production equipment companies and automotive electronics related companies will benefit.
Laser processing, robotics: Industrial automation upgrades continue to increase penetration.
1) In the context of industrial automation upgrades, industrial production has higher requirements for accuracy, efficiency, reliability and other aspects, and the cost-effectiveness advantage of laser processing has become increasingly apparent.
Lasers are continuously expanding the application fields from both breadth and depth, and gradually penetrate into multiple areas of the national economy.
Gradually becoming the world’s largest consumer market for lasers, laser equipment and key component companies are expected to usher in development opportunities.
2) In 2017, the density of industrial robots in mainland China rose to 97 units per 10,000 people, a significant gap from industrial changes.
The per capita holdings of South Korea, Singapore, etc. reached 710 units per 10,000 people and 658 units per 10,000 people in 2017. Japan and Germany also exceeded 300 units per 10,000 people. The remaining robot densities in the United States, Denmark, Taiwan, and other regions averaged 200Taiwan / 10,000 people.
There is still huge room for growth in the mainland market.
With the increase of labor costs and the decline of robot prices (the investment recovery period has reached less than 2 years, ideally up to 1 year), the demand for these robots is expected to maintain rapid growth.
Focus on leaders in subdivided fields with high-tech barriers and larger automation system integration companies.
Technical guidance of the industrial chain: military industry, innovative medicine, military industry is about to usher in a big turning point in 3 years performance.
Military reform personnel, after the impact of structural adjustment is eliminated, compensatory procurement efforts are expected to exceed expectations, and non-main battle equipment manufacturing units will usher in a turning point to release performance flexibility.
In the context of intensive stereotypes of main battle equipment represented by the “20th generation” of aviation equipment in the past two years, the acceleration of batch production of equipment will accelerate the release of performance of main battle equipment manufacturing enterprises.
Civilization of military technology is also one of the important sources of economic innovation.
Technical innovations such as the Internet and satellite positioning were initially involved in the military field.
The civilianization of military technology can promote the landing of technology and provide a market for the transformation of technology into actual results. It can also promote the further development of technological innovation and form a virtuous circle.
Pay attention to the demand for stable main battle equipment and elastic non-main battle equipment enterprises.
In the next 3 years, the main battle equipment camps represented by AVIC Shenfei and Inner Mongolia No. 1 OEM and core supporting enterprises such as AVIC Mechanical and Electrical will maintain steady growth; represented by electronic information, communication and navigation, and support equipmentNon-main battle equipment with multiple main businesses, fragmentation, popular participation in the army, and low securitization rate is expected to gain performance flexibility under the pull of compensatory procurement.
The future of domestic innovative medicines is bright and the road is tortuous.
Domestic medicines are dominated by generic drugs, and the market for innovative drugs is still small.
According to IMS statistics, the global innovative drug market size was nearly US $ 600 billion in 2015, but the market that can be replaced is less than US $ 10 billion.
At the same time, the domestic market is dominated by generic drugs, and most of the innovative drugs on the market are Me-too drugs, lacking first-in-class drugs (first-class).
By comparing the world’s best-selling drugs in 2016 with China’s best-selling drugs, it can also be found that there are obvious differences: the main parts of bio-patent drugs in the global list, the bio-medicines in the domestic list are few, but there are many auxiliary drugs and expired patents.Variety.
Comprehensive policy support encourages research and development of innovative drugs and gradually integrates with international standards.
Since 2015, in improving the quality of drug research and development, policies such as self-examination of clinical data, reform of chemical drug registration classification, and consistency evaluation of generic drugs have been introduced. In terms of encouraging and accelerating the development of new drugs, the system of gradually holding drug marketing licenses has been gradually expanded.To give priority to review and speed up the progress of new drug market, cancel the GLP certification system of clinical trial bases, adopt a filing system to ease the replacement of clinical trial production capacity at the current stage; stipulate a 60-day time limit for clinical application trials of new drugs, speed up the market review of innovative drugs, and on-site inspectionProgress, removing the speed limit step and accelerating the development of new drugs. Gradually, the Drug Administration has become a member of the International Human Drug Registration Technical Coordination Committee (ICH) and a member of the ICH Management Committee. It has further integrated internationally from drug review supervision and drug quality.
Innovative medicines still have long-term opportunities.
From a specific direction, innovative drug leaders or companies that are in the process of transitioning to innovative drugs and expanding breakthroughs, and “emerging leaders” in some segments are still expected to stand out in the long-term competition.