The Hard Logic Directions for Future Investments

The year 2020, the Gengzi Year, saw the global spread of the pandemic. China achieved victory in combating the pandemic, and witnessing the worldwide outbreak, we deeply felt how fortunate and proud we are as descendants of the Chinese nation. We were the first to recover economically and industrially. Through this battle, China's global standing will rise even higher. The Chinese stock market will also attract more international capital, revitalizing with new energy. This is a new starting point and a new opportunity. This leads us to ponder: where exactly are the hard logic directions for future investments?

First is still the pharmaceutical sector. The logical direction for pharmaceuticals is vaccines. Vaccines will be the terminator of this pandemic. Domestically, three vaccines have already been approved for clinical trials. However, the next step is addressing the issue of production capacity. The typical production capacity for vaccines can only cover about 10 million people. With a population of 1.4 billion, 10 million is indeed too small compared to 1.4 billion, so it will take some time. In the future, vaccines will not only have market potential but also long-term sustainability.

Second is the food sector. The logical direction for food lies in the international situation. The year 2020, the Gengzi Year, saw frequent natural disasters—droughts and locust plagues—leading to a massive food shortage. Domestically, meeting internal demand is not a problem, but export demand will surge. Moreover, food-related stocks are the least affected by the pandemic, and there will still be significant room for growth in the future. This sector remains worth watching.

Third is the new infrastructure. The investment logic here is twofold: it is a product of the times and aligns with national policy directions, such as the Belt and Road Initiative and the latest anti-pandemic "Marshall Plan." These all follow the same logic, facilitating China's peaceful rise through win-win cooperation. The related industrial chains are essential for long-term attention.

Fourth is technology and semiconductors. The investment logic here is domestic industrial substitution, primarily driven by the recent escalation of suppression against Huawei. The attitude of cutting ties and aiming to crush Huawei is very clear. As a leader in China's tech industry, Huawei will not sit idly by but will mobilize national resources to achieve a leapfrog development.
Semiconductors now carry not just technological significance but also consumer significance.

Various data show that China is a major consumer of semiconductors, which have become an important consumer product in the country. The sanctions against Huawei actually help stimulate domestic consumption in China. For Huawei to survive, it needs a large number of semiconductors. If foreign countries won’t sell, we will upgrade and substitute our own industries. This market is enormous and serves as a channel to boost domestic consumption.