Industry-Chain Research

Equities investment research is broken down into the four complete industry-chains that drive China's economic development and restructuring. By breaking down the boundaries between individual upstream and downstream industries and focusing on complete industry-chains, Rosefinch can select superior companies with greater certainty and efficiency.

Within the Advanced Manufacturing industry-chain, Rosefinch focuses on three major directions: new energy resources, new energy vehicles and new materials.

The substitution of traditional energy resources with new energy resources is a current and future global trend. Rosefinch believes the photovoltaic and wind energy industries are promising, and searches for those superior companies of different segments within these two industries. The progression in new energy storage technologies and recent favorable pricing policies promote local consumption and usage, expanding the development potential of these industries.

New energy vehicles will entirely transform humanity's transportation, just as the diesel and petrol car replaced the horse and carriage. Through the application of the industry-chain based research model on upstream industries such as new energy resources, midstream industries such as battery manufacturing and vehicle components, downstream industries such as new energy vehicle manufacturing, Rosefinch can analyze companies' competitiveness and their relative industry segments' growth potential.

New materials are a part of the government's 'strategic emerging industries' plan.  The development of new materials is essential in the expansion of the application range and increase in functionality of downstream end-user products. Rosefinch explores investment opportunities in the chemical engineering of new materials, focusing on carbon fiber and new energy vehicle materials.

New retail, household products and livestock farming and foods are at the center of Rosefinch's big consumption industry-chain research.

New retail, formed by ecommerce, high-quality offline retail and distribution and logistics is the direction of transformation in China's retail industry. It is the combination of online and offline retail that satisfies the demand of emerging market consumers. The change in consumer habits, consumption scenarios and consumers themselves determine the opportunities in this sector. Just as the supermarket replaced the grocery store, the new retail sector will replace traditional ecommerce and offline retail in China.

The household products industry benefits significantly from China's enormous population, enabling a huge market capacity and stable market growth. Rosefinch seeks opportunities in the dominant companies in certain segments of the household products industry, as well as those companies that operate in the entire household products industry.

The livestock farming and foods industry is comprised of two major segments, pastoral and arable. Within the pastoral segment, Rosefinch seeks opportunities in upstream industries such as livestock breeding, livestock feed and livestock healthcare, as well as downstream industries such as livestock slaughter and foods. Within the arable segment, Rosefinch closely tracks the farming capital industry (including machinery, pesticides and fertilizers), large-scale crop growing and the grain trade.

Industries including cloud computing, 5G, semiconductors, internet and AI are key in Rosefinch's TMT industry-chain research.

China is expected to become the world's biggest 5G market. In the planning and construction stage of China's 5G network, Rosefinch's research closely follows opportunities in telecommunications equipment, such as fundamental base station equipment, optical telecommunications and radio frequency identification infrastructure.  

Cloud computing is the recognized direction of structural upgrade in the information technology field, enabling enterprises to effectively reduce operating costs, increase efficiencies and exploit the value in data. With the maturing of IaaS infrastructure, an increase in growth of the SaaS industry can be expected. Rosefinch closely tracks universal SaaS providers for investment potential, as well as leading providers within specialist industries such as healthcare, finance and building and construction etc.

The semiconductor industry is gigantic and has a significant impact on society. Segmental industries are continuing to benefit from the considerable support of targeted government policy. The progress in China's semiconductor industry is also a major component of the development in China's advanced manufacturing industry. Working in coordination with the advanced manufacturing industry-chain research team, Rosefinch's semiconductor investment research is based upon the upstream segments of the industry, particularly the leading companies in semiconductor manufacturing and assembly and testing.

Over the last 10 years, China's health care stocks have significantly outperformed the A shares benchmark return. However, in comparison to the US, China's health care sector's market capitalization makes up a small portion of the total A shares market, and hence has large growth potential. Despite the policy reform of 2018, China's continual urbanization and growth in GDP per capita forms a solid base for the sector's continuing upward cycle. Rosefinch continues to monitor the growth-generating factors of the leading companies in the sector, with a focus on medical apparatus and instruments, innovative drugs and private medical care.