How Will "Beautiful 50" Market Become The Focus Of Market Debate?

Recently, the leading stock market has gone through a wave of twists and turns, and after a continuous adjustment of about two weeks, it has gone strong again. GREE electric and China Merchants Bank have reached a new high.

How to interpret "beautiful 50" market has become the focus of debate in the market.

Some agencies believe that from the two main lines of industry concentration and R & D strength, the barriers of the dominant enterprises have basically taken shape, and the "beautiful" 50 market can still be expected.

Some private equity companies in the Pearl River Delta believe that the leading stock market that started in the middle of 2016 can be attributed to the three most profitable sectors (household appliances, banks and liquor), but the valuation is relatively low.

Although after a year of valuation repair, these stocks have changed from undervalued to valuable, but if they look a little further, the leading stock still has the potential of excess return.

The reason is that the concentration of industries in these industries is improving, and the leading companies are expected to share the process of "cake" in the market.

In particular, home appliances, liquor, construction machinery and other industries show strong "strong and strong" characteristics, which is precisely due to the concentration of industries.

Many private agencies are optimistic about this logic.

The upgrading of industry concentration is a fairly long term investment logic.

In a recent meeting, Zhu Ping, deputy general manager of GF, pointed out that in the long run, an important investment opportunity for China's stock market is concentration of industries.

Zhu Ping believed that

The stock development is a new normal.

On the one hand, China's economic growth depends on consumption, and the growth of consumption needs income growth. The growth of income requires the growth of labor productivity. The two ways to increase labor productivity are industry concentration and innovation. Industry concentration can bring dividends and R & D dividends.

Analysts believe that the concentration of non silver, household appliances, electronics, medicine, media, automobile and liquor industry has been increasing in recent years, and the trend has become more evident since 2015.

The concentration of banking and household appliances increased significantly in the 1 quarter of 2017.

Yang Junming, director of Guoxin Securities Research Institute, believes that after nearly 40 years of development in China's economy, the industries of all walks of life have begun to concentrate, and the dominant enterprises have won.

"Only a few stocks have risen this year, most of them.

In fact, it is the inherent law of the market, which is the law of value creation and the law of efficiency priority. Who will create value for the market, whose stock will rise and whose business efficiency is slightly better, who will win in the competition.

Many excellent enterprises, regardless of the index, continue to hit new heights, and many enterprises fail to rebound. There is not much complaint in this game of survival of the fittest.

The leading company has the strength to invest heavily in R & D, and then build a powerful moat for the company, making the strong Heng Qiang.

The US group is the current round.

One of the representative companies in the market has risen more than 50% this year.

Statistics show that the R & D expenses of Beauty Company in 2013 were 3 billion yuan, and the R & D cost rose to 6 billion yuan in 2016.

The R & D expenses of Midea Group in 2014, 2015 and 2016 increased by 33.33%, 31.57% and 14.88% respectively.

In the 2016 annual report, the US group said that over the past 5 years, the company has invested more than 20 billion yuan in research and development, and more than 10000 R & D personnel. As of 2016, the US group has more than 26000 authorized patents, of which, in 2016, the United States has applied for 13546 patents and 5562 invention patents, ranking the first in the field of household appliances.

Hikvision is also a R & D innovative enterprise.

Statistics show that the growth rate of R & D expenses in 2014, 2015 and 2016 increased by 41.09%, 32.44% and 41.26% respectively. The R & D expenses of Hikvision in 2013 were 920 million yuan, while the development cost in 2016 jumped to 2 billion 400 million yuan in 2014.

Analysts believe that according to the ratio of R & D expenses to revenues, Hikvision's R & D costs may reach 4 billion yuan this year.

Hikvision has risen by more than 90% this year.

R & D plays an important role in the growth of pharmaceutical listed companies.

Heng Rui pharmaceutical is the highest cost of R & D in pharmaceutical listed companies. The R & D cost of the company is 1 billion 60 million yuan in 2016.

Heng Rui pharmaceutical industry rose 30% this year, the company's market value rose to the current about 100000000000 yuan.

Some buyer agencies have regarded R & D expenses as an important index for mining cattle stocks.

There is a private person who believes that the development of the past 40 years has made the concentration of various industries improved. Leading enterprises have scale dividends, holding heavy capital for R & D investment, and dug up a deep and long moat for listed companies.

The barrier advantages of leading enterprises have been formed, and the chances of counterattack in the industry are relatively reduced.

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