- New Infrastructure, New Engine, New Opportunities
Author: @Zhou Jianbing
Published on: 2020-09-15
Below is the transcript of the roadshow by the chief analyst of Guojin Securities, Zhou Jianbing.
Dear investors, if we talk about the hottest term in the Chinese economy in 2020, I believe "new infrastructure" definitely ranks high. New infrastructure has become a consensus in society and a national strategy. It has profoundly changed the development of the macro economy and various industries. We also know that new infrastructure has been included in the government work report for 2020, which mentions strengthening the construction of new infrastructure, developing a new generation of information networks, expanding 5G applications, building data centers, and increasing charging and battery swap facilities. At the same time, the government work report also mentioned promoting new energy vehicles, stimulating new consumption and demand, and assisting in the upgrading of industries.
Since the pandemic, we have seen a global economic crisis and the US-China trade friction has sparked a major discussion among investors about the future development of macroeconomic thoughts and policies. In this great transformation opportunity, how should we, as investors, respond to challenges and emerge from the crisis? We believe that new infrastructure is born out of the times and has become a key factor in saving the crisis and competing among major powers.
From historical experience and practical reality, new infrastructure is the simplest and most effective way to address economic crises. It takes into account both short-term expansion of effective demand and long-term expansion of effective supply, playing a significant historical role in stabilizing growth, stabilizing employment, adjusting structure, promoting innovation, and benefiting people's livelihoods. We have seen that during this pandemic, the US excessively relied on quantitative easing, while China vigorously promoted new infrastructure, creating opportunities from crises. In the future, the construction of 5G, data centers, artificial intelligence, charging piles, and urban clusters will be launched on a large scale, bringing profound changes and development opportunities to various industries. It has also attracted global industrial chains, seizing the high ground of technological innovation, breaking the current strategic suppression of the US on China, and laying a strong foundation for the rejuvenation of the Chinese nation. Today, we take this precious time to share with you and discuss from four aspects how the warm wind of policies is blowing, and new infrastructure investment is expected to reach trillions. Additionally, I will briefly introduce the investment opportunities in the seven sub-sectors of new infrastructure. The final conclusion is that we must embrace new infrastructure, embrace certainty, and seize new opportunities.
We know that the central government accelerated the layout of new infrastructure at the end of 2018 and further clarified the scope of new infrastructure. At the same time, we saw that in March this year, CCTV reported on the scope of new infrastructure, which mainly involves seven major areas, which we usually refer to as the seven major areas of new infrastructure: ultra-high voltage, new energy vehicles, charging piles, 5G base stations, big data centers, artificial intelligence, industrial internet, and intercity high-speed rail and urban rail transit. The term "new infrastructure" was first proposed at the Central Economic Work Conference in December 2018, where President Xi mentioned the need to play a key role in investment, increase technological updates in manufacturing, accelerate the commercialization of 5G, and strengthen the construction of new infrastructure such as artificial intelligence, industrial internet, and the