At Cathay Fund's 2025 autumn strategy conference themed "Vast Winds and Boundless Journeys," fund manager Wang Yang shared his perspectives on the high-end manufacturing sector.
From the current situation, we believe our investment direction remains relatively certain in both the short term and medium-to-long term future. Investment in high-end manufacturing or hard technology sectors in 2025 can be summarized as "AI + Hard Power."
At this point in time, I want to emphasize again the future investment direction for high-end manufacturing. In the "AI + Hard Power" direction, we mainly focus on six major areas: first, intelligent driving; second, consumer electronics industry upgrading; third, robotics; fourth, industrial processes; fifth, communication and connectivity; and sixth, energy management. We conduct our investments across these six major sectors. Let me elaborate on each of these six areas.
First, AI + Intelligent Driving. With the development of China's new energy vehicles, the industry has progressed from simple electrification toward electronification and intelligentization. Based on successful overseas experiences, 2025 can be viewed as the inaugural year of automotive intelligence democratization. On one hand, domestic OEMs have continuously strengthened their profitability and achieved relative returns after expanding overseas; on the other hand, against the backdrop of enhanced domestic capabilities, China's intelligent driving sector no longer faces significant cost issues in hardware deployment and electronic component layout. The automotive sector will evolve from "large and comprehensive" toward "refined and specialized," with intelligent driving being a crucial direction for industrial upgrading in the automotive field.
Second, AI + Consumer Electronics. In recent years, mobile phone terminals have become widespread. From the mobile phone perspective, innovation speed and its driving effect on corporate profitability are not as strong as they were five or ten years ago. Therefore, in the AI plus consumer electronics field, in our current and future investments, we mainly focus on AI glasses, AI wearable devices, drones, and portable action cameras. Currently, these industries are accelerating growth both domestically and internationally. From real-life examples around us, we can see that the penetration rates of smart wearable glasses, drones, and action cameras are rising rapidly. Next year may usher in a major innovation year for Apple phones, which is worth anticipating.
Third, AI + Humanoid Robots. We have been investing in this field since 2021 and continue to deploy resources. From the perspective of China's manufacturing development and the combination of intelligence with hardware, humanoid robots or pan-humanoid robots represent important carriers with tremendous imagination space. Last weekend, China hosted the World Humanoid Robot Games. Compared to this year's first quarter Beijing Marathon, new humanoid robot gymnastics events were added, and humanoid robot soccer competitions achieved team competitions under program control. From humanoid robots dancing on the Spring Festival Gala to the Beijing Humanoid Robot Marathon, and recently to the World Sports Conference, we can see that humanoid robots are continuously developing toward maturity.
Fourth, AI + Industrial Processes. Ordinary investors may not be familiar with this field. If you visit production workshops of home appliance and automotive OEMs, you'll find that dark factories and 24-hour production facilities are already quite common, and advanced automotive and home appliance assembly lines have achieved unmanned operations. Industrial processes will further develop in the AI plus direction. It's expected that within two to three years, all advanced production facilities of OEMs may achieve complete unmanned operations, with AI endowing the major manufacturing industry with more intelligent attributes.
Fifth, AI + Communication and Connectivity. This year, computing power has shown outstanding market performance. Not only overseas North American computing power industry chains, but also domestic autonomous and controllable enterprises represented by domestic computing power have demonstrated remarkable market performance. The future will enter a state of universal connectivity, where all data transmission globally will depend on big data models, making vigorous development of computing power fundamental.
Sixth, AI + Energy Management. Some professional investors in new energy fields are familiar with this area, though ordinary investors may not be clear about it. Recently in the market, companies related to liquid cooling and power management have shown strong performance. With changes in energy structure, industrial processes, and consumer lifestyle habits, energy management has involved thousands of households. For example, charging stations for electric two-wheeled motorcycles can be simply understood as applications of energy management AI. In the future, multiple industries including automotive, residential, and industrial sectors will involve energy changes, with the underlying logic being the transformation of energy usage methods brought by technological development.
Regarding hard power, I mentioned this at January's event. On April 8, China-US trade tariffs caused significant pullbacks in related fields, but from the current market perspective, domestic substitution computing power industry, motorcycles, light industry, furniture, automotive and other industries, combined with this year's interim reports (currently in the late intensive disclosure period), listed companies have shown outstanding performance. In the cycle of China's domestic economy fluctuating upward, overseas expansion companies have good profitability this year and favorable profit outlook for the second half. The semiconductor, emerging markets, and overseas-related fields mentioned at the beginning of the year have also performed very well in the market so far this year.
Q: This year, market enthusiasm for AI computing power investment continues to rise. You just mentioned the general development trends of the AI industry chain in the future. Which subdivided directions in the future high-end manufacturing field, such as robotics and semiconductors, do you think currently have clear performance realization capabilities?
Wang Yang: My investment cycle in the semiconductor industry is longer than in robotics. In the early stages, China's semiconductor industry has already produced 10-bagger stocks, and more than one. From China's semiconductor industry perspective, multiple companies in the equipment segment already possess significant advantages in profit realization and international status. This industry has developed for many years, and China has broken foreign monopolies in 70%-80% of fields. In the future semiconductor field, we need to find subdivided areas that haven't been breached yet but have large value volumes, which is also the key direction for future investment.
Looking at the robotics field, the market has always had controversies about this field, such as questions like "why do robots need to be humanoid?" However, it should be noted that both North American and Chinese tech giants are investing heavily in this field, and China's central and local governments have also established funds worth hundreds of billions to support robotics industry development, with related deployments in cities like Hangzhou, Wuhan, Shanghai, and Shenzhen.
In the semiconductor field, China has achieved effective breakthroughs in 70%-80% of areas, and subsequent focus needs to be on the remaining 20%-30% of unbreached segments with high value volumes. In the robotics field, although secondary market enthusiasm has been high in the past year or two with significant stock price increases, companies with true core competitiveness are expected to gradually emerge next year and the year after, which is a process of separating the real from the fake. Having experienced industry cycles in new energy vehicles, photovoltaics and other sectors, at the current point it's still difficult to judge which company in the robotics industry is strongest, can obtain more orders, and is at the technological forefront. Next year may truly enter the stage of separating the real from the fake.
In humanoid robotics or robotics investment fields, Cathay Fund has significant advantages: first, we deployed early, and second, we are confident in finding truly benefiting fields and companies in subsequent stages.
Risk Warning: Views are for reference only and may change due to market changes. They do not constitute investment advice or commitments. Fund investment involves risks, so investment should be cautious.
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