What is the most technically advanced thing these days? Technology. Traditional retailers should make money from the difference between buying and selling prices! With the approval of the Sage of Stocks, overseas attention, and numerous accolades, where is the road leading for tech stocks? Faced with many complex sub-sectors, how should investors choose the best ones? Yesterday, I interviewed an industry analyst.
At this year's Berkshire Hathaway shareholders' meeting, when asked which industry he would invest in if he were to live another 50 years, his answer came as a big surprise. Buffett, who has always shown little interest in high technology, chose the tech industry. "I will definitely choose a large-scale industry, and the tech industry is one of them," Buffett said. The tech industry may see some huge developments in the future, but it will also be highly polarized. A very small number of companies will be extremely successful, but the vast majority of companies within the industry will turn out to be failures.
Meanwhile, yesterday, there were media reports that the impressive quarterly results have warmed up Chinese internet concept stocks overseas. Sohu's Q1 2011 financial report shows that total revenue reached a record $174.4 million, especially online video advertising revenue performed exceptionally well, with a year-on-year increase of 150%. The good performance of domestic internet companies has also attracted the pursuit of American investors. On the day Sohu announced its financial report, the stock price hit a high of $107.56, setting a new historical record, and the closing price also broke through $100 for the first time.
Although there is the recommendation from the Sage of Stocks ahead, and the performance of Chinese internet concept stocks overseas behind, facing numerous sectors under the broad concept of tech stocks, it can still give investors the illusion of being dazzled by a profusion of flowers.
Fu Yongxin, investment advisor at Datong Securities, believes that the entire tech industry has many细分sub-industries, and their industrial scales are not all the same. Therefore, tracking the trend of technological development, sub-industries with technological breakthroughs and rapid development will be the major opportunities in the future. Among these sub-industries, he believes that terminal demand will explode first, and it will also be the original driving force pushing the entire industry to develop rapidly. Thus, the investment logic will be bottom-up, i.e., from downstream applications to upstream manufacturing. In addition, when choosing individual stocks in sub-industries, one should first pay attention to their growth potential and need to have strong earnings explosiveness; secondly, one should value the company's position in the industry, including its depth of exploration in the industry it is in and the market share it occupies; finally, one should choose corresponding individual stocks based on the introduction of industrial support policies.
Currently, science and technology play a crucial role in global development, and also promote the rapid growth and development of many industries and corresponding companies. Fu Yongxin, investment advisor at Datong Securities, believes that for the entire tech industry, it will inevitably continue to develop rapidly in the future. Relatively speaking, he is optimistic about the rapid development of sub-industries such as e-commerce, mobile internet, consumer electronics, and cloud computing.
E-commerce has entered the golden period
Fu Yongxin, investment advisor at Datong Securities, believes that in the past 10 years, China's e-commerce sector has given birth to many B2B e-commerce companies represented by Alibaba. With the continuous expansion of China's internet user base and the greater popularity of terminals, China has already entered the golden period of rapid development of personal application e-commerce. China's e-commerce industry will fully enjoy the profits and increment brought by the scale of internet users.
In addition, the "E-commerce Twelfth Five-Year Plan" was completed at the end of 2010. During the Twelfth Five-Year Plan period, e-commerce will be listed as an important part of strategic emerging industries and will become a focus of the next stage of informatization construction as a branch of next-generation information technology. This will more standardizedly support the healthy development of the industry. Currently, there are not many pure e-commerce concept stocks in the A-share market, but the prospects of these stocks are still quite promising. As the entire industry develops, these companies will inevitably benefit from it. One can pay medium- to long-term attention to companies like Shengyibao.
Cloud computing: Bullish on industry leaders in the medium to long term
China Merchants Securities believes that from the perspective of the cloud computing industry structure, there is no essential difference between the cloud computing industry structure and the existing IT industry structure. Compared with foreign companies, domestic companies' opportunities and potential advantages lie in applications under the cloud computing environment. The main opportunities are in the fields of security, communication, software, and services. Compared with infrastructure products, the growth potential of software service application products is greater. This is mainly due to the price and service advantages of domestic software service vendors, as well as their deep understanding of customer needs. According to the characteristics of their respective products and the degree of influence from the popularization of cloud computing, China Merchants Securities categorizes the listed companies closely related to the concept of cloud computing into the following types: infrastructure product suppliers, application platform suppliers, security product suppliers, application software and service suppliers.
Fu Yongxin, investment advisor at Datong Securities, analyzed that with the gradual implementation of national policy support for cloud computing, the industrial scale of cloud computing will experience rapid growth, and the corresponding enterprises will inevitably benefit from the rapid growth of the entire industrial scale. He is bullish on industry leaders such as Langchao Software and Huasheng Tiancheng in the medium to long term.
Mobile Internet: Bullish on mobile payment and other areas
Founder Securities believes that the growth soil of the mobile internet has gradually matured, and it is about to welcome rapid development. First, the user scale is enormous. According to CNNIC's "The 27th Report on the Development Status of China's Internet Network", by the end of 2010, China's internet user scale reached 457 million, and the mobile internet user scale reached 303 million, accounting for 66.2% of the total number of internet users. Second, network coverage is complete. Third, smart terminals are gradually becoming popular. Fourth, mobile internet applications are gradually becoming rich. Statistics show that in 2010, the usage rates of mobile instant messaging, mobile online news, and mobile search in China were 67.7%, 59.9%, and 56.6%, respectively; at the same time, business applications such as mobile online banking, mobile online payment, mobile online shopping, and mobile travel booking have also begun to be accepted by users.
Fu Yongxin, investment advisor at Datong Securities, believes that although the overall PE and PB and other valuation indicators of the industry are at relatively high historical levels, with the rapid growth of the online audience group, the rapid development stage of the entire industry is about to arrive. He is bullish on the mobile internet sector in the medium to long term, especially in applications such as mobile payment and mobile animation. Pay attention to key leading enterprises such as Tuowei Information and Zhengtong Electronics.
Consumer electronics will enter a period of rapid development
CITIC Securities believed in its 2011 electronic industry investment strategy that one could pay attention to new consumer electronics. First, the steady recovery of the global economy, the emergence of new consumer electronics terminals and application fields such as smartphones, tablet computers, and smart TVs, will drive the growth of the electronic industry's big cycle. Second, China's Twelfth Five-Year Plan lists electronic information as a strategic emerging industry, as a key direction for economic transformation and structural adjustment. The electronic industry can follow several main lines: the smartphone/tablet computer/smart TV industry chain representing the technical trend, the supply chain of consumer electronics giants represented by Apple, electronic manufacturing services, security and infrared industry chains.
Fu Yongxin believes that the entire consumer electronics industry chain can be divided into three levels: terminal, network, and application (content and service). With the rapid growth of downstream application demand and the acceleration of the update and replacement frequency, the entire consumer electronics industry chain will enter a period of rapid development. He is bullish on sub-sector leading enterprises such as Laibao High-tech and Shenzhen Tianma A in the medium to long term.