On April 8, the first national touring strategy meeting of "Heart Bridge Journey. 20 Years and 20 Cities of GF Fund" and the "ICBC Wealth" spring investment strategy meeting initiated by GF Fund and sponsored by Industrial and Commercial Bank of China Shaanxi Branch were successfully held in Xi'an.
Qi Jianqiang, General Manager of Personal Banking Department of ICBC Shaanxi Branch, said in his opening speech that the current economic situation in China and abroad is complicated, and he hopes to use this offline strategy meeting to help ICBC individual customers establish a concept of investment to improve their investment capabilities. At the meeting, all the guests expressed their optimism about the mid- to long-term investment value of A-shares, and shared the direction of focus. Li Chao, chief economist of Zheshang Securities, said that the listed state-owned enterprises are operating stably, but the valuation level is generally low. Under the background of "China Special Valuation System", it is recommended to pay attention to the investment opportunities from the increase in the fundamentals and valuation of state-owned enterprises. Wang Ruidong, fund manager of the Value Investment Department of GF Fund, focuses on high-quality growth areas, including high-end consumer goods, medicine, and key materials for electronic semiconductors.
It is reported that "Heart Bridge Journey" is an investor education activity brand created by GF Fund in 2005, which means to build a heart-to-heart bridge between fund managers and fund investors, and to deliver value investment, long-term investment and rational investment concept. In the 18 years since the brand was established, GF Fund has held more than 6,000 offline activities and 270 online live broadcasts in total, accompanying investors through the bull-bear cycle. On the occasion of the 20th anniversary of GF Fund, GF Fund launched the " Build A Heart-to-Heart Bridge, Go to The Future Together " 20-year 20-city national tour strategy meeting, which will bring investors the latest macro market research results, asset allocation suggestions and information on trendy sectors.
A-shares welcome medium and long-term opportunities
As the old saying goes, ’Things will finally turn to be positive’. Li Chao used this to express his optimism about the equity market this year. He said that this year, uncertain factors such as the conflict between Russia and Ukraine and the interest rate hike by the Federal Reserve are gradually fading away, and A-shares, which have been recharging their energy for more than a year, will usher in a new turning point.
As for the impetus for the upward movement of the stock market, Li Chao believes that it mainly comes from the excess savings of residents since 2020. According to its estimates, the excess savings rate of residents after 2020 will be about 5.2%, and the total amount of excess savings will total 3.98 trillion yuan. Among them, many excess savings come from the "passive" savings formed by the weakening of residents' income expectations during the epidemic prevention and control period. If there is no strong policy to stimulate residents to increase rigid consumption expenditure, excess savings may still continue to rise. Under the background that residents' confidence in consumption and real estate has not yet fully recovered, the capital market will be the core spillover direction.
Wang Ruidong is also optimistic about the medium and long-term equity market. He mentioned that from the perspective of macro fundamentals, the PMI of the manufacturing industry from January to March this year was above the line of prosperity and decline, and the government also clearly put forward the target of annual GDP growth rate of about 5%. There are many signs that the domestic economy is recovering. From the perspective of liquidity, the current domestic inflationary pressure is not strong, the monetary policy is likely to remain stable, and the liquidity remains relatively stable. The stock-bond performance ratio is relatively low in the past 10 years, indicating that the current allocation of stock assets is cost-effective, and we are optimistic about the mid-to-long-term allocation value of A shares.
Detailed explanation of the theme "China Special Valuation System" and focus on the three major growth industries
The concept of "China Special Valuation System" and " State-owned Enterprises" is undoubtedly a major topic that has attracted a lot of attention in the capital market this year. Li Chao gave a detailed introduction to its background and investment value at the meeting.
He took the lead in introducing the necessity of the "China Special Valuation System". Since the reform and opening up, China has achieved world-renowned economic achievements. The pillars of the socialist economy with Chinese characteristics - state-owned enterprises have also ushered in rapid development, and both assets and income scale have achieved relatively good growth. However, from the perspective of valuation, the valuation levels of listed state-owned enterprises are generally low, state-owned enterprises that pay dividends should be given more reasonable valuation incentives.
In addition to the attractive allocation at the valuation level, Li Chao also introduced that the state-owned enterprises' fundamentals are also prominent. State-owned enterprises are the pillar market entities of China's macro economy and undertake key goals such as maintaining macroeconomic stability and providing social welfare and public goods. State-owned enterprises have two characteristics: First, state-owned enterprises generally increase assets through mergers and acquisitions when the economy is bad, which will obviously earn benefit when the economy improves. Second, state-owned enterprises have a long life cycle and low risk of bankruptcy. Therefore, under the background of increasing downward pressure on the current economy, state-owned enterprises can benefit from resisting economic cycle fluctuations and solving market failures.
Wang Ruidong, the proposed fund manager of GF’s core competitiveness, also said that he will focus on allocation opportunities in industries such as high-end consumer goods, medicine and key materials for electronic semiconductors.
Wang Ruidong introduced that the consumption power of residents of high-end consumer goods was less damaged during the epidemic and the performance is expected to recover quickly when the consumption scene recovers. The certainty of profit growth is relatively high.
Secondly, the demand for consumer-oriented products and services in the pharmaceutical industry, upstream reagents/consumables for scientific research and industry, and the R&D outsourcing industry chain continue to grow. From the perspective of transactions, institutions are still under-allocated to the pharmaceutical sector, and the transaction structure is not bad.
Third, for electronic semiconductors, the industry chain has embraced domestic suppliers in the past two years, the verification cycle has been greatly shortened and the willingness to use them is strong. If the penetration rate increases from 5% to 20%, there will be relatively large room for improvement in the future.

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