Chen Qi, Huafu Fund: Layout of growth industries with the imprint of the times, technology stocks preferred tracks

"Similar to smart phones, new energy vehicles 'flying into the homes of ordinary people' is the trend and trend of the times, and the current penetration rate of domestic new energy vehicles is still in the stage of about 20%, and there is still a long way to go from the next stage of 50%. After electrification is intelligence, there may be better returns around electrification and intelligent choice. ”

In 2021, the Shanghai index rose 4.8% for the whole year, and the annual line was three consecutive yangs. 2022 kicked off, the A-share market suffered a "black opening", from January 4 to 6, A-share closed down for three consecutive trading days, the Shanghai index fell by nearly 1.5%, the ChiNext index fell more than 5.5%. Photovoltaic, lithium battery, semiconductor, military and other popular track stocks fell the most seriously. Why did the "track" become a "tunnel"? How is the market outlook for 2022? How do technology stocks "choose the best of the best"? On January 6, CBN interviewed Chen Qi, head of the research department of Huafu Fund and manager of the industrial upgrading fund, and discussed the above topics.

Fund Manager Chen Qi

Deputy Director of Research Department, Fund Manager

Master of Microelectronics of Fudan University, 9 years of TMT research, 5 years of integrated circuit industry experience, 2 years of fund management experience.

Cutting-edge power, pioneer of investment in the field of pan-science and technology

High-growth track stocks in 2022 are not pessimistic

Q: What are the main reasons for the continuous adjustment of A shares in the first week of 2022?

Chen Qi: At the end of each year and the beginning of the year, it is a time when funds are quite disturbed. But this time the decline may also exceed the expectations of most people. The larger declines in these days are all track stocks, concentrated in the directions of new energy vehicles, photovoltaics, semiconductors, and military industries. The main reason is that the market is worried about the congestion of the track, and in addition, the valuation of these directions is relatively high.

Q: The overall market in 2021 is oscillating at 3300-3700 points, how do you evaluate the market performance in 2021?

Chen Qi: 2021 is a state of "three twists and turns, two heavens of ice and fire". At the beginning of the year, the "Mao Index" continued the strong trend in 2020, but began to peak on February 18, 2021, and then the US Treasury interest rate rose in March 2021, and the A-share as a whole was in the stage of adjustment. Since the end of March 2021, growth stocks and track stocks have bottomed out, and due to sales exceeding expectations, new energy vehicles have risen sharply after the second quarter, including photovoltaics and semiconductors. However, after the third quarter, it began to diverge, the "Ning Index" continued to soar, and the "Mao Index" underwent a sharp adjustment. At the same time, the pro-cyclical rush up and down, showing a more extreme performance. Compared with the first three quarters, the fourth quarter of 2021 is basically dominated by shocks.

Overall, 2021 is the performance differentiation of the "Mao Index" and the "Ning Index", the performance of large-market value stocks represented by the "Mao Index" is dismal, and the small-market value stocks represented by the CSI 500 are better.

Q: How do you look ahead to the market in 2022?

Chen Qi: The market style is inertial, I think some small and medium-sized market value stocks may still have performance in 2022, and a group of listed companies represented by specialized and special new enterprises will have marginal changes. These companies have not received much attention before, the valuation is relatively reasonable, coupled with their own performance growth, this batch of stocks will still perform.

For track stocks, track stocks that can still maintain high growth in 2022, I don't think it is pessimistic. Especially after the beginning of the year to now, there is a relatively large correction range, their valuation also tends to be reasonable, and then if there is no problem with the growth rate of fundamental performance, I think there will still be a market.

However, the possibility of a full-scale bull market is unlikely, because from the perspective of the situation in 2022, the tightening of overseas funds should be relatively certain, and it is impossible to have a comprehensive easing of the domestic capital side, so 2022 is still dominated by structural markets.

The market's view now is relatively bullish on the CSI 300, because from the perspective of the company, their valuations are relatively lower. From the perspective of steady growth, the overall market style will be more friendly to large-cap stocks. I personally judge that there will still be opportunities for growth stocks, but overall, the CSI 300 may have an advantage.

Choose around the electrification and intelligence of the car

Q: What are your views on the future performance of A-share small and medium-sized enterprises?

Chen Qi: Since 2016, the great white horse represented by food and beverage has experienced a sustained upward trend of 4 to 5 years. In 2017, the entire liquor sector grew particularly rapidly, including 2020, their overall performance was very good, but after 2021, their performance growth rate was declining. And some varieties of small and medium-sized market capitalization, their own performance relative to the valuation, is a relatively fast growth state, so in the second half of 2021 began to CSI 1000 gradually outperformed the CSI 300, on the one hand, is the chip factor, large market value stocks are relatively crowded, on the other hand, it is also due to the growth rate of small market value stocks has changed more obviously

According to the statistics of securities companies, the best performing sectors of A-shares over the years have been the sectors with the fastest performance growth, and the demand for growth is the unchanged choice of the capital market. I think that all the sectors that are growing, the varieties with fast performance growth, and the performance in the stock price is generally not bad.

Q: In 2022, which investment tracks are you most optimistic about?

Chen Qi: I hope to find manufacturing stocks that rely on continuous volume to achieve performance growth, rather than achieving performance growth through simple price increases.

Q: How long can the explosive growth of new energy vehicles last?

Chen Qi: Similar to smart phones, new energy vehicles "flying into the homes of ordinary people" is the trend and trend of the times, and the penetration rate of domestic new energy vehicles is still in the stage of about 20%, and there is still a long way to go from the next stage of 50%. After electrification is intelligence, there may be better returns around electrification and intelligent choice.

Q: How long do you expect semiconductor core starvation to continue?

Chen Qi: Some chips with rapidly growing demand are still very tight in our opinion. If it is not a shortage caused by demand pull, but a shortage caused by supply, the investment opportunities may not be very good. We still hope to tap investment opportunities for demand-driven chips. Chips that continue to grow in demand include power chips for automobiles and high-performance computing chips.

Q: In recent years, the continuous expansion of semiconductor production will cause hidden dangers of overcapacity in the future?

Chen Qi: Now the pattern of fabs is very stable, the proportion of domestic production capacity in global wafer foundry is very low, and a domestic wafer manufacturing leader has previously publicly stated that there is still 5 times the capacity space for domestic import substitution, so I am still relatively optimistic about the future space of this piece. Now the downstream fabs are very full, and the newly expanded production capacity has not yet landed, and it has been booked by downstream customers.

Q: How do technology stocks choose the best?

Chen Qi: Technology stocks still have to choose the track first, for example, the life cycle of analog integrated circuits is relatively long, and after making a relatively competitive product, it can continue to sell for many years. In terms of life cycle business model, this has more advantages than ordinary logic chips.

In addition, we must pay attention to the company's management. Technology stocks are changing faster, which puts higher demands on management. Good management can make the company achieve more, which is more likely for investors to return.

Q: Tell us about your investment philosophy and investment strategy?

Chen Qi: First choose the growth industry with the imprint of the times, and then select the leading stocks with high prosperity to do the layout.

This article is reproduced from CBN, the content is for reference only and does not constitute investment advice. Investors operate accordingly at their own risk.

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Risk Warning: The fund is risky and the investment needs to be cautious. The discussion of the market in this article is only the Company's research views on the current securities market and related industries, based on the uncertainty and variability of the market environment, the views involved may be adjusted or changed with the market in the future. This content is only for the purpose of investor communication, does not constitute advice or opinion on any institutional and individual investment, does not represent the current or future positions of the company's managed funds, does not necessarily serve as the basis for investment decisions of the funds managed by the company, and does not constitute a commitment or guarantee for the investment returns of investors. The data in this article is compiled from publicly available information and the Company does not guarantee the accuracy and completeness of the text and data contained in this document and does not assume any responsibility for any loss arising from the use of all or part of such reports by any person. Before purchasing a fund, investors should carefully read the fund legal documents such as "Fund Contract", "Prospectus", "Product Information Summary" to understand the risk-return characteristics of the fund, and judge whether the fund is compatible with the investor's risk tolerance according to its own investment objectives, investment period, investment experience, asset status, etc. Investors should prudently participate in fund investment based on their personal risk tolerance and investment experience.

Chen Qi, Master of Microelectronics, Fudan University, master's degree, 11 years of experience, 2 years of investment management. He joined Quamnet Fund Management Co., Ltd. in December 2015, and was the fund manager of Huafu IOT World Flexible Allocation Hybrid Fund in October 21, 2019, and the fund manager of Huafu Industrial Upgrading Flexible Allocation Hybrid Securities Investment Fund in August 26, 2020. 2021.3.19 Fund Manager of Huafu Guotai Minan Flexible Allocation Fund. Since September 14, 2021, he has been the fund manager of Huafu New Energy Equity Initiated Securities Investment Fund.