Qualitative, at present, valuation, general election and fiscal stimulus are not the main contradictions in the medium term for technology stocks.
The valuation problem that the market is worried about can be alleviated by the Fed's low interest rate strategy. Although the fiscal stimulus should have been introduced long ago, it should not be absent before the election; After the Party Congress, Trump's poll disadvantage was reduced, and the demands of on-site control and rights protection gave the US stock market more certainty in the medium term.
First, FAANG is still in an excellent period of share expansion.
$ Apple (AAPL)$: In the next 2-3 years, the 5G replacement wave of 654.38 billion iPhone users will basically lock in the high growth of Apple.
$ Amazon (AMZN)$: In the second half of the year, the epidemic situation in the United States eased and residents' income recovered, which is expected to accelerate the improvement of Amazon's profits; For the problem of getting customers, we can make proper reference to domestic e-commerce. The speed of getting customers after the epidemic has not slowed down, and perhaps it should be more optimistic.
Advertisers boycotted $ Facebook (FB) $: Q2 created an excellent opportunity for Facebook to get on the bus, and there is a trend of continuous improvement. Objectively speaking, Tiktok's ban is also conducive to Facebook's social dominance in the United States.
$ Netflix (NFLX)$: Based on the high growth of Q2, the management gave terrible expectations for Netflix's revenue in the third quarter and new paying users. We believe that Netflix will enter the mode of consolidating and waiting for the third quarterly report, and the corresponding market expectations may be a bit too pessimistic.
$ Google (GOOG)$: The trend of easing the epidemic in the United States means that advertising revenue has a chance to return to a considerable level.
Second, how to treat the aftermath?
In fact, before this adjustment, many key indicators, such as $ Standard & Poor's 500 Volatility Index (VIX)$ and personal consumption expenditure, have already appeared, which indicates that the risk sentiment of US stocks is heating up, and the slowdown of economic recovery in summer may bring about an emotional correction. Refer to "US stock week strategy: abnormal fluctuation of panic index, the last bar of US stocks or completed bands" 2020083 1.
We believe that US stocks may enter a period of high volatility in the next two months, but from the historical experience, it is difficult for US stocks to make systematic adjustments throughout the QE cycle without weakening asset purchases, so medium-term investors need not worry too much.
Specifically, the Fed's new inflation strategy will tolerate higher inflation rate, which means that the real interest rate excluding inflation will be lower and last longer in the future. In the medium term, it will help to further support the valuation of technology stocks, especially the future excess return of China stocks as non-US assets (we think it will take at least two years); Reference 2H20 Outlook for US Hong Kong Stocks: Focus on China Core Assets 20200703.
There is also the need to "protect" the equity market before Trump was elected, which is also an important expectation for the market. After * * * and the party congress, Trump's poll disadvantage has been reduced, which also reflects Trump's control ability.
$ 1.5 times long VIX short-term futures ETF-ProShares (UVXY) $2 times long VIX short-term options ETN(TVIX)$
Third, the China consumer market has given birth to excess returns.
In addition to the exchange rate factor, which has improved the performance of China Stock Exchange and attracted global liquidity (lock-in time, we think it is at least two years), the rapid growth of China's consumer market (the total social capital will soon surpass that of the United States) is also an important expectation that China Stock Exchange is expected to continue to create excess returns in the United States and Hong Kong. (The latter locks in space and has the opportunity to breed an exponential market. )
For example, there are representative new economic consumption led by Ali and JD.COM, and new car-making forces led by Tesla, Weilai, Ideality and Tucki.
$ BABA)$: As a core asset linked to China's macro, Ali's past market value is highly correlated with zero social change. We can see that in 19, the total amount of social zero in China has reached 6 trillion dollars, which is close to 6.2 trillion dollars in the United States. It can be predicted that China will surpass the United States and become the largest consumer market in the world this year and next. As the leader of growth market, the expansion of medium-term market capacity will also promote Ali's premium.
$ JD.COM(JD)$: Today, JD has a strong competitive advantage. COM's self-operated and self-built logistics is unmatched by other light asset mode e-commerce. At the time of Q 1, we thought that JD.COM was in the best period of rising performance. At present, we still think so, and continue to be optimistic about JD.COM. COM's ability to acquire customers under the sinking strategy.
$ TERM TSLA)$: China is a model of Tesla' s success in non-American markets. In the second quarter, Tesla's revenue growth in China reached an astonishing 65,438+003%, accounting for an all-time high of 23%. Because China is the largest electric vehicle market in the world.
We saw that the cumulative sales of new energy in China reached 3.66 million vehicles in 20 19, and China accounted for nearly 50% of the world. We believe that with policy incentives, technological progress and infrastructure improvement, new energy automobile companies will continue to benefit from this electrification era.
For the new domestic forces, under the expectation of large market capacity, we believe that there is a great opportunity for each family to keep pace.
$ NIO)$: In the global pure electric field, the ES6 delivered by Q2 Weilai has been ranked second only to Model3. In August, the delivery volume and new orders of ES6 and ES8 also reached a new high, and ES6 increased for two consecutive months. We believe that the current increase in production capacity will provide a higher reputation for Weilai's subsequent delivery.
$ LI (LI)$: As an extended-range electric vehicle, Li ONE delivered 2,765,438+065,438+0 vehicles in August, setting a monthly delivery record. From June to August 2020, Li ONE delivered a total of 65,438+04,656 vehicles. At present, as the only car owned by Li, if the delivery growth trajectories of Li ONE, Li ONE and Weilai ES6 are basically the same, it can be seen that there is sufficient demand for extended-range electric vehicles.
$ Xpeng Motors (XPEV)$ In terms of quantity, we are more optimistic about Tucki's seepage velocity in the electric vehicle market. Tucki has positioned itself as a smart electric vehicle, paying attention to cost performance. The target market is 654.38+0.5 million-0.3 million high-end passenger cars, which is more suitable for domestic consumption capacity and has a higher market share. At present, Tucki's investment scale is better than ideal, and its profitability is better than Weilai's under the same investment scale.