context: Facing domestic and external pressure, Politburo released signals of stimulus in its 31 July gathering. Along with infrastructure development, digital economy is expected to be a major beneficiary of a possible package. MIIT and NDRC's digital economy action plan further raises these expectations, as it aims for a C¥15 tn industry by 2020. Now, market analysts advise buying stock in the sectors mentioned in the official document.
'China Securities Chengdu South First Ring Road Office' shared its analysts' takes on Ministry of Industry and IT and National Development and Reform Commission's digital economy action plan via its official WeChat channel
- Huang Wentao 黄文涛 and Hu Yanni 胡艳妮 macro industry analysts argue digital consumption
- is the new growth driver
- requires long-term investments as
- supply is lacking and not diverse enough
- profitability declines through fierce competition
- high mortgages limit digital consumption by residents
- offers investment opportunities in
- healthcare, as the population ages
- education, culture and entertainment
- disruptive technologies like 5G, AI and autonomous cars
- Wu Chaoze 武超则 communications industry lead analyst argues more investments will be required to
- meet goals of 98 percent penetration of fibre-optic networks and 4G, currently at 70 and 50 percent
- develop 5G, with C¥1.2 tn investment from 2019-21
- Chen Meng 陈萌 small and medium size markets lead analyst argues developing autonomous vehicles requires developing sensors, in-car information interfaces and the internet of vehicles
- Zeng Rongfei 曾荣飞 communication industry lead analyst highlights the online education industry, which has had annual growth of over 20 percent for the last eight years
- He Juying 贺菊颖 medical industry lead analyst highlights similarities with the internet+ healthcare plan