When Contemporary Amperex Technology Co. Limited's market capitalization surpassed that of PetroChina, and Zhongji Innolight Co.,Ltd. advances towards a trillion-yuan market cap goal, while leading liquor stocks shed their "perpetual growth myth," it prompts new reflections and understandings about investment. I, too, have been contemplating this, with many thoughts.
Amid plummeting oil prices, the market continues to perform well. According to reports from CCTV News, Iranian Foreign Minister Araghchi stated on social media that, given the ceasefire between Lebanon and Israel, Iran will open the Strait of Hormuz to all commercial vessels during the truce. Former President Trump responded to this development.
International crude oil prices fell sharply in response. In summary, the easing of tensions in the Middle East is expected to boost the upward trend in the A-share market next week.
After the challenges of March, the period from April to June looks promising for solid gains.
Sectors operate in cycles. Years of investment experience reveal that every industry has its corresponding cycle. Those sectors capable of achieving significant performance highs and substantial stock price surges are mostly involved in global industrial upgrading.
The most typical examples are the Apple supply chain, the Tesla supply chain, the carbon neutrality industrial chain, and the current AI computing power industrial chain.
These four industrial chains have produced numerous stocks that doubled or even increased tenfold in value. They all follow a remarkably similar script: supply falls short of demand, supply and demand reach equilibrium, and then supply exceeds demand.
Currently, Zhongji Innolight Co.,Ltd. is approaching the trillion-yuan market capitalization milestone. The company's revenue for 2025 is projected to be close to 400 billion yuan, with net profit exceeding 100 billion yuan, corresponding to a price-to-sales ratio of over 20 times.
Looking back to 2021, when Contemporary Amperex Technology Co. Limited reached its trillion-yuan market cap goal, its revenue for 2020 was approximately 500 billion yuan, with a net profit around 55 billion yuan. This corresponded to a price-to-sales ratio of 20 times and a price-to-earnings ratio exceeding 180 times.
By 2025, Contemporary Amperex Technology Co. Limited's revenue is forecast to reach 4.237 trillion yuan, with net profit rising to 722 billion yuan. Its total market capitalization could exceed 20 trillion yuan, resulting in a price-to-sales ratio under 5 times and a price-to-earnings ratio below 30 times.
Perhaps the optical module industry will follow a similar trajectory to Contemporary Amperex Technology Co. Limited within the AI industrial cycle. Currently, this sector continues its rapid advance based on the logic of supply struggling to meet demand.
The endgame involves globalization. Under the trend of technological industrial upgrading, the investment narrative seen with companies like Zhongji Innolight Co.,Ltd. is likely to repeat. Transitioning from a domestic focus to a global outlook, the robust capabilities of Chinese manufacturing continue to demonstrate significant impact.
With the successful tape-out of Musk's self-developed chip, could this ignite a trillion-yuan race in custom Application-Specific Integrated Circuits (ASICs)?
Will the potential listing of SpaceX, sparking competition in space-based computing, coupled with continued investment in domestic commercial aerospace, initiate a new chapter in technological industrial upgrading?
Could the defense industry experience a surge in arms exports this year?
These questions are left for readers to ponder.
That's all for today's discussion. Wishing everyone a pleasant weekend. This content is for reference only and should not be considered as investment advice. Any market decisions based on this content are made at your own risk.
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