On the first trading day after the National Day, the ChiNext 50 index rose 18.56%. ChiNext 50 ETF (ticker 159949) tracks the ChiNext 50 Index, and its feeder funds, Huaan ChiNext 50 ETF Connect A (ticker 160422) and Huaan ChiNext 50 ETF Connect C (ticker 160424). The ChiNext 50 Index selects 50 representative companies in the ChiNext Board, most of which are concentrated in high-growth industries such as new energy, information technology, medicine and health, and financial technology, which usually have strong innovation capabilities and R&D capabilities, and can quickly respond to market changes and technological innovations.
The scientific and technological attributes are highlighted, focusing on the four core tracks
Recently, the State Council Information Office has launched "three arrows at the same time", and the Politburo meeting has sent a signal of steady growth and guided medium and long-term funds to enter the market. Catalyzed by a series of blockbuster policies, market confidence has been significantly boosted. In terms of A-shares, from September 18 to September 30, the Shanghai Composite Index rose by 23.39%, the Shenzhen Component Index rose by 31.89%, and the ChiNext 50 Index rose by 43.91%.
Why did the ChiNext 50 Index rebound strongly? It is understood that the GEM provides a direct financing platform for the growth of innovative and entrepreneurial enterprises with "three innovations (innovation, creativity and creativity) and four new technologies (new technologies, new industries, new formats and new models)". The five major industries of the new generation of information technology, high-end equipment manufacturing, new energy, new materials and biomedicine have become the main forces of newly listed companies on the GEM, and the advantageous industries are developing in clusters.
Figure: The specific meaning of three innovations and four innovations
Source: Compiled by Huaan Fund
Compared with the ChiNext 50 index, which excludes listed companies whose main business does not meet the characteristics of the GEM (such as agriculture, forestry, animal husbandry and fishery, food and beverage industries), the GEM 50 Index focuses on the four major tracks of new energy + information technology + medicine + financial technology, and the growth attributes of science and technology are more pure.
Chart: The four core tracks of the ChiNext 50 Index
Source: Wind, Huaan Fund, as of 2024/9/27
Judging from the latest development of these four core tracks, first of all, from the perspective of the new energy industry, China's new energy vehicle sales and penetration rate are leading the world. According to the China Association of Automobile Manufacturers, in August 2024, NEV production and sales reached 1.092 million units and 1.1 million units, up 29.6% and 30% y/y, respectively, with a market share of 44.8%. The trade-in policy has been increased to boost demand, some enterprises on the supply side have begun to shrink capital expenditures, the supply and demand structure is optimized at the margin, the profitability of the industrial chain is expected to improve quarter by quarter, the valuation may be repaired, and the fundamental reversal still needs to wait for the production capacity to be cleared.
Secondly, in the field of information technology, intelligent computing power has become an important embodiment of measuring national strength. Artificial intelligence models are not only limited to the processing of text and images, but also begin to expand to audio, video and other fields, bringing subversive revolutions in thousands of industries. In terms of policy, the China Securities Regulatory Commission (CSRC) focuses on supporting listed companies to transform and upgrade in the direction of new quality productivity, actively supporting listed companies to carry out mergers and acquisitions around strategic emerging industries and future industries, and supporting companies on the Science and Technology Innovation Board and the Growth Enterprise Market to merge and acquire upstream and downstream assets in the industrial chain, benefiting leading companies in the information technology industry.
Third, from the perspective of the pharmaceutical industry, in the past five years, the average annual compound growth rate of China's pharmaceutical market has reached 9.3%. The aging environment supports the development of medium and long-term demand in the pharmaceutical sector. At the same time, the recent passage of the biosecurity bill through the United States National Defense Authorization Act has basically failed, and trading sentiment has picked up, boosting the sentiment of the CXO sector.
In addition, as far as financial technology is concerned, technological innovation is the core element of developing new quality productivity and the key to promoting industrial innovation. The fintech industry has opened up the chain of "science and technology-industry-finance", encouraged the development of venture capital and equity investment, and supported long-term capital, patient capital and strategic capital to invest more in scientific and technological innovation and industrial innovation.
Long-term vigorous vitality It has reached its 10th anniversary
At the beginning of the 21st century, with the advent of the domestic information age, a large number of high-tech enterprises have emerged and grown rapidly. On October 30, 2009, the first batch of enterprises were listed on the GEM, injecting fresh blood and innovation genes into China's capital market.
As one of the representative indices of the ChiNext Board, the ChiNext 50 Index was released on June 18, 2014, marking its 10th anniversary. Specifically, the ChiNext 50 Index was jointly compiled by Huaan Fund and Shenzhen Securities Information Co., Ltd., and in the process of compilation, it referred to the stock selection method of the Nasdaq index of U.S. stocks, and excluded the agriculture, forestry, animal husbandry and fishery sectors with low correlation with the growth attributes of ChiNext technology, which made the scientific and technological innovation characteristics of the index more prominent, aiming to depict the market trend of 50 emerging technology stocks with large market capitalization and good liquidity in the ChiNext Board. After years of incubation and development, many of the heavyweights of the ChiNext 50 Index have developed into industry leaders and occupy a pivotal position in the related industrial chain.
From the perspective of changes in the industry structure, the changes in the GEM 50 Index reflect the structural adjustment of China's innovative capital ecosystem, with traditional industries such as machinery and chemical industries accounting for less and less of the leading companies on the GEM, while the proportion of new economic industries such as new energy, pharmaceutical electronics, media, and computers has increased, and the regular adjustment mechanism of the index has made it have long-term vigorous vitality.
In the view of Xu Zhiyan, assistant to the general manager of Huaan Fund and fund manager of Huaan ChiNext 50 ETF, in the context of the continuous development of domestic stable growth policies and the steady improvement of the economy, the 2024 government work report will "accelerate the development of new quality productivity" as the first government task, and the investment opportunities in the high-tech sector represented by the ChiNext 50 index will be further revealed.
The warm wind of the policy blows frequently and benefits from the policy dividends
Recently, the regulatory authorities have played a set of policy combinations. In Xu's view, September 24 marked an important turning point for China's capital market, with senior leaders announcing a series of key policies at the Politburo meeting. The speech highlighted the current challenges facing the economy and the need to transform to high-quality development, and the government is exploring new application scenarios to promote stability.
Specifically, in terms of monetary policy, the central bank proposed to consider the reserve ratio and interest rates in combination to promote interest rate cut expectations and enhance market confidence. At the same time, the State Council has introduced a number of employment promotion measures, with special attention to the development of private enterprises. In addition, the PBOC has also proposed innovative policies such as securities fund insurance and lending facilities, as well as a refinancing mechanism after repo and increased holdings, to further support the market.
At the fiscal policy level, accelerating the use of medium- and long-term government bonds has become the focus, providing a new way for economic stimulus. Overall, these systemic policies are aimed at responding to short-term economic pressures, stimulating market vitality, and promoting marketization, legalization, and internationalization. The recent intensive introduction of policies indicates a change in the investment logic of the A-share market, providing a broader space for residents' wealth management.
As an industry participant, Huaan Fund is actively studying and adapting to these changes, strengthening investor companionship through live broadcasts and other forms to help everyone understand market dynamics and allocation strategies.
Regarding the strong rebound of the ChiNext 50 index, Xu Zhiyan said that the ChiNext 50 index brings together the growth white horses in the advantageous areas of the ChiNext and focuses on the leading enterprises with scientific and technological growth attributes. When the market's risk appetite improves significantly, the ChiNext 50 ETF has high investment value. The GEM 50 Index focuses on the layout of new quality productivity, and the index focuses on enterprises that are in line with the concept of "three innovations and four innovations", that is, those companies that have the ability to innovate, create and create, and have made breakthroughs in new technologies, new industries, new formats and new models. These enterprises represent the new qualitative productive forces in China's new round of economic structural transformation.
As China's economy enters an inflection point and is experiencing a new innovation cycle, GEM has become an important platform to promote innovation and entrepreneurship. It places special emphasis on supporting the development of five advantageous industries, including next-generation information technology, high-end equipment manufacturing, new energy, new materials and biomedicine, which are characterized by cluster development. The ChiNext 50 Index covers four core tracks: new energy, information technology, medicine and health, and financial technology, and selects companies that are leading in their respective industries. Such leading enterprises have obvious advantages in R&D investment and technology transformation, and at the same time show strong profitability and market adaptability, which is an important part of the core assets of the GEM.
In the eyes of industry insiders, the development of public funds presents a trend of instrumentalization and diversification, and index products are one of the ideal ways for ordinary investors to participate in equity asset investment.
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(The performance of Huaan ChiNext 50 ETF, data source fund second quarterly report: as of June 30, 2024, the net value growth rate in the past five years is 36.60%, and the performance benchmark rate of return is 33.88%) (CIS)