科技板块的发展趋势及投资逻辑

JPM – Markets Monthly March – Text Alternative Script – TIME: 22:42

[techno music]

Mr. Manoukian: Welcome to the March edition of Markets Monthly. My name is Jake Manoukian and I'm an Investment Strategist at the J.P.Morgan Private Bank. Now this month I'm really excited to be joined by Manish Goyal, who's a Portfolio Manager of the Digital Evolution Strategy at the Private Bank. Now Manish has been covering the technology space for over 20 years, and one thing I get really excited about when I hear from Manish is how much technology really permeates every facet of our lives. So Manish, thank you for taking the time this month.

Mr. Goyal: Jake, it's my pleasure to be here. Thank you for having me.

Mr. Manoukian: Where I want to start the conversation is taking a look back at the last maybe 10, 15 years of trends that really drove the technology space, and then shift and look ahead for the next decade to really get a sense for what you see coming.

Mr. Goyal: If you look at early 2000s, the market has started to deploy internet protocol IP technologies, companies like Cisco, Juniper, JDS Uniphase- they all benefited from that. Fast forward seven, eight years, market was deploying 3G technologies, and it was the intersection of IP technology with 3G and smartphones that really connected billions of people, and see how many new applications emerged out of it. Search, social media, e-commerce, digital payments, video gaming- trillions of dollars of shareholder value was created because of that. Where we are standing today, we are beginning to see signs of 5G deployment. And when 5G is deployed, we will connect tens of billions of devices, whether it is of a car, healthcare equipment, factory floors, industrial equipment, parking meters or it is city lamps. And those connected devices will be talking to each of them through artificial intelligence, and new services will emerge, which I believe will create trillions of dollars of shareholder value.

Mr. Manoukian: So what is happening right now in the space that you're excited about?

Mr. Goyal: The consumer is moving towards home automation, security is desiring a lot more features, and functionalities in the car. So part of the differentiation is now being driven by technology. Let me give you a couple examples. If you bought a thermostat recently, and if you compared that product to what you bought three or four years ago, you will realize it carries a lot more silicon semiconductor technology inside of it. The same thing is true for garage door openers. In most cases, you can operate a newly purchased thermostat or garage door opener from your mobile phone, because these products are being differentiated by the integration of technology. Look at a high-ticket item like a car. How many companies are advertising and saying I have a better V8 engine than the other guy?The entire focus is about features, functionality, safety features that are inside of a car. How you can prevent collision, how the car can auto stop in case of emergency, how it can self-park. All these differentiations are driven by software, semiconductors and sensors. So it is the integration of technology which is driving product differentiation.

Mr. Manoukian: Right. So it seems like even the most mundane household items and the big-ticket items have technology infused in them, and that's going to be a huge driving force of technology in the future. So that covers the consumer side. What do you see happening on the enterprise side, the business side, that gets you excited?

Mr. Goyal: Consumer was the first to lead the digital adoption. Enterprises are following that trend very rapidly. Enterprises have to satisfy the customer need, provide the data, whether it is on a mobile device or a tablet or a desktop, offer as many applications inside of a Cloud. When they're onboarding employees, you don't want employees to write their personal information 10 times on 10 different forms. It can all be streamlined by having a good work flow, and you can put that information at one time. Now one of the trends that stands out to me is Cloud adoption. Enterprises want to move rapidly towards Cloud because you can improve the asset utilization rate of your high-value assets. It is much easier to deploy, maintain and upgrade an application in a Cloud environment than within the four walls of a company. So we foresee a significant room for growth within the Cloud adoption in the enterprise market.

Mr. Manoukian: So, I mean, even I was an example of this when they took my desktop away and gave me a virtual desktop space to work on. I mean, that's just an example of someone in a big corporation getting moved to  this Cloud environment.

Mr. Goyal: Yes, yes, absolutely.

Mr. Manoukian: I'm really excited by those trends, and I think those trends were really born out in the numbers from last year. The technology sector had earnings growth of somewhere around 25%, but investors barely broke even in that space.

Mr. Goyal: Yes.

Mr. Manoukian: So when do you think investors are going to start getting paid in terms of returns for all of this earnings growth that's being generated?

Mr. Goyal: You are right, Jake. Last year, technology sector earnings grew roughly 25%, but broader indexes, technology indexes were flat. So in other words, investors didn't really get paid for that. This year, we are estimating technology sector earnings to grow around 10%. I would expect a significant uptick in technology stocks because the valuation multiple compressed quite a bit during the fourth quarter of last year. It is hard to be precise with timing, but some of the macro concerns related to increasing rate, trade war tension with China, Brexit, are gradually subsiding, and although they may still move the markets in the near term, but I think the magnitude of earnings growth that we saw last year and what we are estimating for 2019 will drive the stock prices higher between now and the year-end.

Mr. Manoukian: Yeah, two things there that I think are really important is one, long gone are the days of the 2000's tech bubble, where

all these valuations were kind of sky-high. The tech valuations actually look pretty reasonable right now.

Mr. Goyal: Yeah.

Mr. Manoukian: And then two, even though there's these macro concerns that harm the valuations of these companies in the short term, I really like the secular themes the technology industry has that maybe aren't so sensitive to every whim of the Fed or of the trade war.

Mr. Goyal: I completely agree with you. Now, part of technology sector has a lot of secular team behind it, and then there is part of technology sector which is sort of- we can call it cyclical. If tomorrow there is a pullback in GDP, I will expect this cyclical portion of technology sector will be the first to see some slow down. However, the adoption of these technologies is not going to change. You will not search less. We will continue to consume more and more on Netflix. Our desire to have more features and functionality in our car will not change. Those are the secular growth drivers, which are unlikely to change.

Mr. Manoukian: Yeah, Manish, it seems like there's a lot to be excited about in this space. Manish, thank you so much for taking the time.

Mr. Goyal: Jake, the pleasure was all mine. Thank you so much for having me.

Mr. Manoukian: And thank you all for watching. We hope to see you next month.

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