Interview with Chief Strategist of Ping An Securities: Focus on investment areas such as green economy in 2021

Zhongxin Jingwei Client, March 2 (Fu Yumei, Sun Qingyang) As the opening year of the "14th Five-Year Plan", macroeconomic policy trends and development opportunities for related industries have attracted much attention. In an exclusive interview with the client of Zhongxin Jingwei, Wei Wei, chief strategist of Ping An Securities and assistant director of the research institute, believes that there is not much suspense in the "stability-oriented" monetary policy in 2021, but it is also necessary to pay attention to whether there are changes in marginal and operational rhythms.

　　Wei Wei has 12 years of experience in securities investment research, and has worked in China Galaxy Securities Asset Management Headquarters, successively serving as a researcher, investment manager and other positions, and has served as a senior macro analyst and chief macro analyst of Ping An Securities. He has in-depth research on macroeconomics, asset allocation, market strategy and so on.

　　Wei Wei, Chief Strategist of Ping An Securities and Assistant Director of the Institute

　　As a capital market research expert, Wei Wei frankly said that active fiscal policy is a "good thing" for researchers, and it is easier to grasp the coherence and periodicity of policies, so as to predict industry trends. In Wei Wei's view, in 2021, we should pay attention to key policy measures in the fields of strategic emerging industries, digital economy, green economy, and green finance, and related areas will also contain investment opportunities. The following is a compilation of the interview content (slightly edited):

　　Zhongxin Jingwei: During the two sessions of the National People's Congress this year, what areas do you focus on?

　　Wei Wei: During the two sessions of the National People's Congress, we usually focus on the following points, first of all, the formulation of major economic goals, including the GDP growth target for the current year, inflation, new employment, unemployment and other quantitative indicators. It is worth mentioning that as China's economy enters the stage of high-quality development from the stage of high-speed growth, the government's economic growth target is gradually adjusting. In recent years, the GDP growth rate proposed by the two sessions of the National People's Congress has been a range indicator or a flexible indicator, and in 2020, the GDP growth target has not been set due to the epidemic factor.

　　With the steady recovery of the economy this year, whether GDP (growth target) will be raised again is also hotly debated. I believe that looking forward to the entire "14th Five-Year Plan" period, we should still take medium- and long-term economic growth as the main goal and focus our work on improving high-quality development.

　　In addition, we will pay attention to the key arrangements for economic work during the year. This mainly includes key reform measures, key directions supported by national industrial policies, and areas of government investment and key projects, which may contain key investment opportunities in the current year.

　　I think there are two aspects worth paying attention to in 2021: First, the strategic emerging industries, modern service industries, infrastructure construction industries, digital economy and other medium- and long-term key industries that have been clearly mentioned in the 14th Five-Year Plan. 2021 is the first year of the "14th Five-Year Plan", and attention should be paid to the more detailed and specific industrial support measures for the development of key industries in the two sessions and the government work report; the second is the "30·60 goal" of carbon peaking and carbon neutrality, which is a hard indicator to measure the development of China's green economy. Therefore, attention should be paid to key policy measures in the fields of green economy and green finance.

　　Zhongxin Jingwei: In terms of monetary policy, how do you judge the relevant trend?

　　Wei Wei: From the perspective of economic fundamentals, China's economic recovery will continue during the year. However, the market is more concerned about whether the problem of insufficient effective demand will be exposed in the second half of the year after the impact and rebound of the epidemic on the economy is over and the economy returns to the normal track, which will lead to a decline in economic growth. If the economic growth momentum in the second half of the year shows a significant decline, monetary policy may have the possibility of marginal easing.

　　From the perspective of risk prevention, the recovery of economic fundamentals and the improvement of external demand have gradually changed the goal of monetary policy from stable growth and employment protection last year to risk prevention. In the fourth quarter of 2020, minmin bank of Chinese emphasized maintaining the stability of the macro leverage ratio, and at the same time discussed the debt risk of the resident sector, proposing to pay more attention to the problem of resident debt while reasonably assessing the leverage ratio of residents. Therefore, the policy goal of preventing risks and stabilizing leverage determines that monetary policy in 2021 cannot be too loose.

　　Overall, there is not much suspense in the general direction of monetary policy in 2021, and the two directions of substantial easing and tightening are restricted. The results of monetary policy adjustments and regulatory policy changes may make the overall credit environment converge relative to 2020.

　　However, for the capital market, the short-term marginal rhythm of monetary policy may still have an impact on the market's capital situation and liquidity expectations, just as the easing of liquidity exceeded expectations at the end of last year and the beginning of this year, and the marginal tightening of liquidity since late January, which actually has an impact on asset prices. Therefore, we may need to pay more attention to whether there are changes in marginal and operational rhythms in the case of "stability-oriented" monetary policy during the year.

　　Zhongxin Jingwei: Recently, how to accelerate the release of consumption potential has become a hot topic under the epidemic. What new opportunities do you think this will bring to the market? What issues are worth paying attention to?

　　Wei Wei: (Last year) The Central Economic Work Conference clearly put forward two key measures to expand domestic demand: one is to expand consumption, and the other is to enhance investment.

　　Opportunities to expand consumption are mainly in the two parts of new consumption and service consumption. The new consumption field is mainly based on the consumer demand of the "Z era", pointing to the younger generation and the future consumer population. Including some new consumer brands represented by the trendy products, may bring more and more brand, consumption upgrade investment opportunities appear. The field of service consumption is mainly based on the traditional service-oriented consumer demand of education, medical care, pension, tourism, etc., and also represents the main direction of consumption expenditure of Chinese residents in the future, and it is also an important direction for good companies to emerge in the future.

　　In terms of enhancing investment, we can pay attention to the following directions: First, emerging industries, especially strategic emerging industries. For example, industries such as new energy, new energy vehicles, and energy conservation and environmental protection related to achieving carbon neutrality goals; for example, with the deepening of aging and the improvement of residents' medical needs, the biopharmaceutical industry may also emerge more and more good companies and investment targets.

　　Second, the digital economy and related new infrastructure investment. With the advent of the 5G era, more and more industries will be changed by big data. It includes the vigorous development of artificial intelligence, cloud computing, blockchain and other industries, as well as a series of changes brought about by big data in traditional industries.

　　Third, the transformation and upgrading of the manufacturing industry and investment in technological transformation. Facing 2035, China will move from a traditional manufacturing power to a manufacturing power, on the one hand, the "14th Five-Year Plan" proposes to unswervingly build a manufacturing power, promote the upgrading of the industrial base, and modernize the industrial chain; on the other hand, the Central Economic Work Conference also proposes to invest in the upgrading of manufacturing equipment and technological transformation. In this context, the fixed asset investment in high-tech manufacturing is expected to continue to accelerate, and there will be good development opportunities in subdivisions such as manufacturing single champions, traditional manufacturing head upgrades, and high-end manufacturing. (Zhongxin Jingwei APP)

　　(The views in this article are for reference only and do not constitute investment advice, investment is risky, and you need to be cautious when entering the market.) )

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