In other words, as China's economy shifts from high-speed growth to high-quality growth, scientific and technological innovation has become a new engine for the mainland's economic growth.
In recent years, the state has intensively introduced policies to encourage and support scientific and technological innovation, launched the science and technology innovation board and piloted the registration system, which not only provides direct financing convenience for high-tech enterprises that focus on research and development and have a long profit cycle, but also provides opportunities for financial institutions to directly invest in high-quality targets in high-tech enterprises.
After more than four years of rapid development, the Science and Technology Innovation Board has gathered a large number of outstanding enterprises in the field of scientific and technological innovation, and has become the main market for the financing of A-share technology enterprises. As of October 20, 2023, 562 companies have been listed on the Science and Technology Innovation Board, with a total market value of more than 6.5 trillion yuan.
As we all know, the Science and Technology Innovation Board has distinctive characteristics of small and medium-sized caps, and the overall performance of the board is characterized by high growth. In recent years, the allocation ratio in active equity funds has continued to rise, reaching 10.33% at the end of 2022. Since the beginning of this year, the proportion of allocation has continued to rise, among which electronics, medicine and machinery and other industries have received great attention from the market.
The above background about the Science and Technology Innovation Board is roughly popularized here.
Today, I think everyone should be no stranger to the Science and Technology Innovation Board itself, but I estimate that most of the small partners' cognition of the Science and Technology Innovation Board comes from the Science and Technology Innovation 50 Index.
In view of this, today we will introduce a small and medium-sized growth stock on the Science and Technology Innovation Board, an index that is more resilient than the Science and Technology Innovation 50 - the Science and Technology Innovation 100 Index.
Let's first take a look at what kind of index the STAR 100 Index is.
The full name of the STAR Market 100 is the SSE STAR Market 100 Component Index (index code: 000698. CSI), the index selects 100 securities with medium market capitalization and good liquidity after excluding the STAR 50 sample from the STAR Market as a sample, and uses the free float market capitalization weighted calculation to mainly reflect the overall performance of small and medium-sized companies on the STAR Market. The index was released by China Securities Index Company on August 7, 2023, with December 31, 2019 as the base date, 1,000 points as the basis point, and the index sample is adjusted quarterly.
In fact, the STAR 100 Index and the STAR 50 Index together constitute the SSE STAR Market Scale Index Series, and the combination of the two can fully reflect the overall performance of the securities of listed companies with different market capitalizations in the STAR Market.
In view of this, when discussing the characteristics and advantages of the STAR 100 index, we will partially compare it with the STAR 50 Index:
First of all, from the perspective of market capitalization distribution, the constituent stocks of the STAR 100 Index are mainly small and medium-sized market capitalization.
According to the data of China Securities Index Company, as of September 28, 2023, there are 100 constituent stocks of the STAR 100 Index, with an average free float market value of 6.232 billion yuan and a median free float market value of 5.558 billion yuan.
Specifically, as of September 28, 2023, there are 12 constituent stocks of the STAR 100 Index with a free float market value of more than 10 billion yuan, accounting for 25.30% of the total weight; There are 47 constituent stocks with a free float market value of 50~10 billion yuan, accounting for 52.82% of the total weight; There are 42 constituent stocks with a free float market value of less than 5 billion yuan, accounting for 22.63% of the total weight.
If compared with the mainstream broad-based index in the market, the STAR 50 is similar to the CSI 800 Index in terms of market capitalization structure, and the market value of the index constituents is large and mid-cap;
As of September 28, 2023, 65 constituent stocks in the STAR 100 Index overlap with the CSI 1000, and the market capitalization characteristics of the index holdings are more obvious.
Therefore, the STAR 100 and the STAR 50 have a certain complementary effect in terms of market capitalization style.
Secondly, from the perspective of industry distribution, the constituent stocks of the STAR 100 Index have a wider coverage and a more balanced industry distribution.
As of September 28, 2023, the STAR 100 Index covers 10 industries with high technology content among all 31 Shenwan first-class industries, including:
The top three industries in the index are pharmaceutical biology (30.56%), power equipment (19.74%) and electronics (18.63%), with a total weight of 68.92%, corresponding to the pharmaceutical and biological industry, new energy industry and semiconductor industry with obvious scientific and technological innovation attributes. This does not include machinery and equipment, which account for about 10% of the weighted industries.
Compared with the Science and Technology Innovation 50 Index, which also covers 10 Shenwan first-class industries but accounts for more than 50% of the electronics industry alone, the Science and Technology Innovation 100 Index is significantly more balanced in terms of industry distribution.
According to the classification standards of strategic emerging industries, the STAR 100 Index mainly focuses on the new generation of information technology, biological industry, high-end equipment manufacturing, new materials and other sectors, which is not only more balanced than the STAR 50 Index in terms of strategic emerging industries, but also better characterizes the overall industry distribution of the STAR Market to a certain extent.
Third, from the perspective of individual stocks, the index constituents have a clear growth style of emerging technologies, and the concentration of holdings (the ratio of the top 10 heavy stocks to total net asset value) is relatively low.
As mentioned earlier, the constituent stocks of the STAR 100 Index have very distinct characteristics of technological innovation, so their growth style is obvious:
If combined with the above-mentioned characteristics of small and mid-cap in terms of market capitalization, the STAR 100 Index is more inclined to the small- and mid-cap growth style in terms of overall style.
From the perspective of shareholding concentration, compared with the STAR 50, which has a relatively concentrated shareholding, the STAR 100 Index has relatively dispersed holdings and a low concentration of shareholdings:
Specifically, as of September 28, 2023, the proportion of the top five constituents and the top ten constituents of the STAR 100 Index were "only" 12.42% and 21.91%, respectively, far lower than the 34.22% and 49.98% of the STAR 50 Index in the same period, and the overall holdings were relatively dispersed and balanced.
From the perspective of index liquidity, the constituent stocks of the STAR 100 Index are actively traded, and the trading volume and turnover continue to increase, especially since 2023, the trading activity of the index has increased significantly compared with 2022.
As of October 17, 2023, the average daily trading volume in 2023 reached 297 million shares, with an average daily turnover of 14.300 billion yuan, much higher than the average daily trading volume of 219 million shares and the average daily turnover of 11.548 billion yuan in 2022.
Fourth, from the perspective of historical performance, the performance of the STAR 100 Index has outperformed the STAR 50 Index since the base day, and the high elasticity attribute is significant.
As of October 17, 2023, the cumulative return of the STAR 100 Index since the base date (2019/12/31) is 4.19%, while the cumulative return of the STAR 50 Index over the same period is -11.78%, and the overall performance of the index is better than that of the STAR 50 Index.
On the other hand, from the perspective of historical data, the STAR 100 Index has shown higher performance resilience, with an annualized volatility of 31.29% since the base date (as of 2023/10/17), which is higher than the annualized volatility of the STAR 50 Index of 31.05% over the same period, so its performance during the market rebound is significantly better than that of the STAR 50 Index over the same period.
In other words, once the market stabilizes and rebounds, the STAR 100 Index, which has high elasticity characteristics, will definitely be a performance blade.
Fifth, from a fundamental point of view, the STAR 100 Index is heavy on R&D and has high earnings growth, and there is room for improvement in the valuation level.
As a typical representative of the emerging technology growth sector, the constituent stocks of the STAR 100 Index are expected to have good profitability and high development potential.
As of August 11, 2023, according to Wind's consensus forecast, the expected operating income of the STAR 100 Index in 2023 will be 309.990 billion yuan, a year-on-year growth rate of 14.27%; The net profit attributable to the parent company is expected to be 36.288 billion yuan, a year-on-year growth rate of 35.23%. The characteristics of high profitability of the index are obvious.
Not only that, the proportion of R&D investment in the Science and Technology Innovation 100 Index is also relatively high.
Taking 2022 as an example, the R&D investment of the constituent stocks of the STAR 100 Index will total 28.814 billion yuan, accounting for 10.62% of the total operating income, exceeding the STAR 50 Index and far exceeding the Wind All A Index.
Judging from the historical results of A-shares, companies with both R&D investment ability and innovation willingness can often obtain a virtuous cycle of "R&D-> performance", and listed companies with a high proportion of R&D investment in revenue in the early stage generally have a higher level of performance growth in the future, and the high proportion of R&D investment in the Science and Technology Innovation 100 Index is the cornerstone of supporting the high growth of long-term performance in the future.
From the perspective of valuation level, as of August 11, 2023, the price-to-earnings ratio and price-to-book ratio of the STAR 100 Index are 65.15 times and 4.13 times, respectively, which are still at a reasonable level for the sector itself.
If we combine the forecast earnings growth rate of the above-mentioned index in 2024 of nearly 50%, as well as multiple factors such as the stabilization and recovery of the economy and the gradual recovery of the semiconductor cycle, the valuation level of the STAR 100 Index still has a lot of room for improvement.
At this point, the analysis of the investment value of the STAR 100 Index is basically the same.
At present, there are several on-exchange products tracking this index in the market, the most noteworthy of which is undoubtedly the Bosera Science and Technology Innovation 100 Index ETF (referred to as the Science and Technology Innovation 100 Index ETF, fund code 588030).
Specifically, the subscription amount of this product in the initial offering stage is as high as 2.6 billion yuan (nearly twice as much as other products in the same batch), and it still maintains a steady and rising trend under the recent market downturn, with the latest scale of more than 3.3 billion yuan as of October 17, 2023, which is currently the largest, most active and most liquid on-site science and technology innovation 100 ETF in the whole market.
It is precisely because of this that on October 16, the Science and Technology Innovation 100 Index ETF (588030) was officially included in the two financial (margin trading) targets, which not only further promoted the liquidity upgrade of the product, but also improved the trading experience of investors.
After more than a month of stable operation, the on-site Bosera Science and Technology Innovation 100 ETF launched its over-the-counter feeder fund in a timely manner, Bosera SSE Science and Technology Innovation Board 100 ETF Connect (Class A 019857; Class C 019858) and has been subscribing since October 26.
Tang Yibing, fund manager, joined Bosera Fund in 2015 after graduating from Rutgers University with a master's degree, and has served as researcher, senior researcher, investment manager assistant, fund manager assistant and fund manager. At present, it manages a number of public index products, such as Bosera SSE Super Large Cap ETF, Bosera Sustainable Development 100 ETF, Bosera CSI 300 ETF, Bosera ChiNext Index, Bosera Dividend ETF, Bosera SSE Science and Technology Innovation Board New Materials ETF, Bosera Major Consumer ETF, Bosera SSE Science and Technology Innovation Board 50 Component Index, and Bosera Beijing Stock Exchange 50 Component Index.
As a major fund manufacturer in the domestic public offering market, Bosera Fund has developed distinctive passive equity products. Among them, the more representative products include the first domestic "cross-border ETF" launched in 2013 - Bosera S&P 500 ETF, the first domestic "touch net ETF" launched in 2014 - Bosera Gold ETF, and in 2018 and 2019 launched two central enterprise asset representative products - Bosera Central Enterprises Structural Adjustment ETF and Bosera Central Enterprises Innovation Driven ETF.
In the last part, I will briefly solve a problem, namely: how to invest in the STAR 100 Index?
This question is actually very simple, because based on the above elaboration, we can know that the best investment method of the STAR 100 Index, as an index with distinctive characteristics of scientific and technological innovation and high growth, is naturally regular investment, and as mentioned above, whether from the perspective of valuation or profitability, it is a good time to start investing in the STAR 100 Index.
At this point, I think today's article is almost over.