Elaboration of new qualitative productivity

The connotation of new quality productivity

Since July 2023, General Secretary Xi Jinping has put forward the concept of new quality productivity during his inspections in Sichuan, Heilongjiang and other places: it is necessary to lead the comprehensive revitalization of the industry with scientific and technological innovation. Integrate scientific and technological innovation resources, lead the development of strategic emerging industries and future industries, and accelerate the formation of new quality productivity. At the same time, he also demanded: "Actively cultivate new energy, new materials, advanced manufacturing, electronic information and other strategic emerging industries, actively cultivate future industries, accelerate the formation of new quality productivity, and enhance the development of new momentum." ”

The middle-income country trap and the Malthusian trap

In 2006, the World Bank's East Asia Economic Development Report first identified the "middle-income trap" (Middle Income Trap) concept. It refers to the fact that after an economy's per capita income reaches the world's middle level (per capita GDP is at the stage of 4,000 US dollars to 12,700 US dollars), it cannot smoothly realize the transformation of development strategy and development mode, resulting in insufficient new growth momentum, especially endogenous driving force, and long-term economic stagnation; At the same time, the problems accumulated in the process of rapid development have erupted in a concentrated manner, resulting in the intensification of the gap between the rich and the poor, the difficulty of industrial upgrading, the obstruction of the urbanization process, and the prominence of social contradictions.

Malthusian Trap, also known as the Malthusian Catastrophe, Malthusian Stagnation) is a theory named after the United Kingdom political economist Thomas · Robert · Malthus. Population growth is increased according to the geometric progression, and the subsistence resources only grow according to the arithmetic progression, the additional population will always be eliminated in some way, and the population cannot exceed the corresponding level of agricultural development, the theory is called the "Malthusian trap".

The importance of new quality productivity

The importance of new quality productivity

The substantial increase in total factor productivity (TFP) drives the qualitative change of the production function and injects "new quality" Factor of production. Since 2007, China's economic growth center has shown a downward trend, the traditional labor factor L and capital factor k lack support, the growth rate of labor force population has turned negative, and the growth rate of China's total labor productivity has declined, and the real estate market is facing sustainability challenges. Therefore, it is necessary to improve the total factor productivity, drive the three factors of labor, labor objects, and labor means production to achieve a leap, and expand the form of labor objects to include new production factors such as "air-sea-ground".

Deconstruction of the industrial chain of new quality productivity

|New quality productivity track combing: six tracks and three measures

Three major measures: optimization and upgrading of traditional industrial and supply chains, actively cultivating emerging industries and future industries, and vigorously developing the digital economy.

Six tracks: digital economy based on digital technology, high-end equipment where the core competitiveness of the manufacturing industry is located, biotechnology in innovative technology clusters, wind, solar and lithium battery energy transformation, new energy vehicles, quantum technology and other future industries. (Source: Guosen Securities)

Industrial positioning and understanding of the digital economy

The digital economy is the core engine of future economic growth and the fourth generation of industrial revolution with high hopes. The digital economy is a broad concept, which covers various economic forms that directly or indirectly use data to guide resources to play a role and promote the development of productivity, accounting for nearly half of GDP.

Understanding the Transformation of the Digital Economy from the Production Function:

Factors of production: Data is valued, and data becomes a factor of production, bringing a series of markets such as data collection, right confirmation, pricing, and trading.

Productivity: digital industrialization (AI, AIGC, communications, Internet, etc.) and industrial digitalization (marginal contribution to agriculture, industry, services).

Production relations: digital governance, a more transparent, scientific and efficient governance system.

Digital economy industry chain

1. Digital industrialization: high-end + domestic substitution (hardware-end sensor & integrated circuit, software-end metaverse & AI)

2. Industrial digitalization: the maturity of agricultural digital technology application has been improved (5G, cloud computing, artificial intelligence); Biomimetic drive in industry and service industry (ERP, information innovation, big data)

High-end equipment industry chain

High-end equipment is at the height of the manufacturing value chain. Set manufacturing industry. Its general industrial chain covers key materials, core components, complete machine manufacturing, integrated applications and back-end services, mainly including industrial robots, Beidou industry, additive manufacturing, rail transit equipment and other fields.

Biotechnology industry chain

In the anti-cyclical track, the general trend of population aging and per capita medical expenditure increase under the long-term logic still determines that biotechnology is a long-slope and heavy-snow track, and the short-term and medium-term mainly depends on policies.

Smart tram industry chain

In the first half, electrification was basically completed, and in the short term, iterative innovation based on the existing pattern was carried out, and cost reduction was the main path.

In the second half, intelligence is the key to victory, and the rapid launch of affordable intelligent driving, with reference to mobile phones, product differentiation, user experience and marketing will significantly affect the market pattern in the future.

Energy transition industry chain

Energy transition is the foundation of industrial transformation, and it is also related to national strategic security, which will be supported and promoted by the will of the country on a continuous basis.

|Low-altitude economic industrial chain

The low-altitude economy is expected to replicate the victory of new energy vehicles, and the driving factors can be attributed to the breakthrough stage of the technological change cycle (Tianshi), the strong supply chain of domestic automobiles and aircraft, and the internal market (geographical advantage) with sufficient support for qualitative changes, policy support, liberalization and participation (people).

Investment opportunities and strategies

1. Digital Economy:

(1) Industrial digitalization opportunities: The main content is the digital transformation and upgrading of traditional industries, and the core participants are the continuous empowerment and exploration of major Internet technology giants in the fields of agriculture, industry, and service industries. With the popularization of the Internet has entered the deep water area, there is still room for the market to be limited by technology, or limited by proprietary, it is difficult to achieve a balance between cost and value, poor economic benefits, such as industrial automation and other small and micro enterprises, it is difficult to break the situation, and the growth is poor.

(2) Digital industrialization opportunities: Emerging industry opportunities such as the metaverse and artificial intelligence have huge market potential, high heat and high expectations, but they are still in the stage of weak reality, which is the stage of exploration and competition between major technology giants and leading unicorns. After waiting for the progress of the substantive implementation of AIGC and the metaverse industry, there are investment opportunities in the secondary market of the top unicorns competing for the winners, as well as investment opportunities in the primary market (M&A exit) of many application-side small and micro enterprises;

2. High-end equipment:

China's low-end manufacturing is highly localized, high-end manufacturing is partially localized, and high localization of industrial equipment often = high localization of industry, such as rail transit industry, photovoltaic industry, new energy automobile industry, etc., which have become China's business card. The opportunities in the future high-end equipment industry are mainly concentrated in two logics:

First, based on the domestic breakthrough and substitution opportunities of cutting-edge neck equipment based on safety, such as lithography machines, high-end machine tools, etc., pay attention to the introduction of teams with mature experience.

Second, based on the new market driven by new industries, leading companies or industry leading associated companies that provide related equipment have growth opportunities, such as the rise of the perovskite industry brings the growth of laser equipment and magnetron sputtering coating equipment, etc., and pays attention to the timing of investment in the secondary market.

3. Biotechnology:

Medical devices: There is a serious imbalance in the ratio of high/low-end products in China, a serious imbalance in the ratio of drugs/devices, and there are still investment opportunities in medical devices. In the next 5-10 years, domestic leaders will enjoy the dual drive of high growth rate and import substitution in the industry, and the industry concentration will be improved, and the investment opportunities of secondary leaders will be concerned; Investment technology in the primary market is the core competitiveness, and brand influence and channel capability are the core barriers.

Innovative drugs: policy-driven, policy-level preferences: innovation, medical insurance, going overseas. It can be noted that the first is the enterprise that selects new demand for large single products in the late clinical stage of the enterprise, the second is the enterprise with the break-even inflection point of the rapid commercialization of the approved varieties that are accompanied by the break-even inflection point, and the third is the enterprise that can be judged to have the potential to go overseas in the early clinical varieties of the enterprise.

4. Smart Tram:

Whether it is electrification or intelligence, the main track is already very crowded, and the competition pattern is basically determined or the entry threshold is extremely high. Based on the industrial characteristics of the strong rise of domestic brands under electrification, and the huge increment brought about by the development trend of intelligence, the upstream parts of the automobile industry have three major logics: market growth logic, penetration rate improvement logic and localization rate increase brought by going overseas. Among them, the overseas increment is basically applicable to all components, and some subdivisions are suitable for the logic of low penetration rate or low localization rate.

1) Upstream: vehicle and even tier 1 is mainly the competition between giants and listed companies, Tier 2 and even Tier 3. Subdivide the track, focusing on mining opportunities. Under the huge market size base, a large number of Tier The 3 subdivision tracks also have enough ceilings;

2) Low penetration rate and low localization rate: mainly focus on new parts brought by electrification and intelligence, such as lightweight materials, air suspension, etc.; As well as intelligent chassis and automotive semiconductors, which are traditional overseas advantageous fields, in addition to hard technology attributes, domestic strengths of labor and manufacturing costs accounted for a high proportion of the field is also worth paying attention to.

3) Invest in leading and strong binding projects: The automobile industry has entered the knockout competition, and the leading binding ensures the stability of performance.

5. Energy Transition:

Photovoltaics: Focus on mature projects at the head of TOPCon and HJT, as well as early-stage projects with outstanding technical advantages in perovskites. The equipment side pays attention to deposition and coating equipment.

Lithium battery: China's lithium battery industry chain leads the world, and you can pay attention to new technology trends such as silicon-based anodes, composite current collectors, solid-state batteries and other projects with industrial landing.

Energy storage: The path to listing is not clear, and we pay attention to cash flow projects and business model innovation projects.

Hydrogen: The next generation of energy with high certainty, but the technology and macro environment make it difficult to commercialize in the short term, waiting for the valuation adjustment of the top project. Equipment and materials are at the core of hydrogen energy development, with a focus on domestic substitution and breakthrough innovation.

6. Low-altitude economy:

Low-altitude infrastructure:

1) "Soft infrastructure": low-altitude route design and low-altitude air traffic control system need to be transformed;

2) "Hard infrastructure": "communication, guidance, supervision, meteorology" equipment needs to be upgraded and iterated 。

Aircraft Manufacturing:

1) eVTOL industry chain and UAV industry chain;

2) Aviation-grade upgrade requirements for the whole machine, system, parts, and materials.

Supporting industrial chain: loads, pods, gimbals, sensors, etc.