The Ministry of Industry and Information Technology and the National Development and Reform Commission have jointly issued the 15th Five-Year Plan for the Development of the Electronic Information Manufacturing Industry, setting a target for revenue of large-scale enterprises to surpass 30 trillion yuan by 2030, with R&D investment intensity reaching 3.5%. Guo Zhenyue, fund manager of the China Merchants Fund Innovation-Driven Equity Fund, believes the plan's core significance lies in reaffirming the industry's strategic position and resource allocation direction over the medium-to-long term, elevating the policy framework from a short-term growth-stabilization measure to a comprehensive five-year industrial development guideline. From an investment perspective, this should not be simply attributed to thematic catalysts, as the market's pricing logic for the sector has already transitioned from expectation-driven expansion to earnings-based validation.

Guo noted that core allocations in the electronics sector are likely to converge around three primary investment themes: the complete integrated circuit supply chain, advanced computing and AI hardware infrastructure, and photonics and optical communications. He emphasized that the domestic substitution chain offers relatively higher certainty in earnings delivery, while the AI hardware chain provides greater demand elasticity. However, both ends carry risks of valuation bubbles, with the key assessment criterion being whether the "orders-revenue-profit-cash flow" loop remains intact.

1. What is the primary significance of the 15th Five-Year Plan for the Electronic Information Manufacturing Industry for the A-share electronics sector? Is it still mainly driven by thematic catalysts?

Guo Zhenyue, fund manager of the China Merchants Fund Innovation-Driven Equity Fund: The plan, jointly issued by the Ministry of Industry and Information Technology and the National Development and Reform Commission, targets revenue exceeding 30 trillion yuan for large-scale enterprises by 2030 and R&D investment intensity reaching 3.5%, while deploying 17 key tasks centered on "foundation building, quality enhancement, new growth cultivation, and governance improvement". For the A-share electronics sector, its core significance lies in reaffirming the industry's position and resource allocation direction over the medium-to-long term: integrated circuits, advanced computing, consumer electronics, foundational electronics, and energy electronics are defined as key areas for long-board technological breakthroughs and cultivation of first-class enterprises, elevating the policy framework from periodic stabilization measures to a five-year industrial development master plan. The plan integrates advanced process capability enhancement, advanced packaging and 3D integration, supply of key equipment materials and components, and AI hardware infrastructure and computing power supply capabilities into the same implementation pathway, indicating that future investment focus should shift from concept mapping to verifiable indicators such as order fulfillment, localization rate improvement, R&D intensity, and capacity layout. In the short term, the market may exhibit policy expectation-driven trading characteristics, but the more fundamental change during the 15th Five-Year Plan period is the institutionalization and traceability of industrial logic. From an investment perspective, this should not be simply attributed to thematic catalysts; themes may constitute the starting point for periodic sentiment, but medium-to-long-term pricing will still depend on fundamental delivery and competitive landscape evolution. Targets with customer qualification and mass supply capabilities, positioned at critical bottleneck segments of the supply chain, are more likely to navigate through policy and business cycle fluctuations.

2. What is the current valuation and fundamental situation of the electronics sector?

Guo Zhenyue: On the fundamentals front, the electronics industry's prosperity still has support: in the first half of 2026, revenue of large-scale electronic information manufacturing enterprises reached approximately 9.41 trillion yuan, a year-on-year increase of about 18.5%, with notable improvement in profitability indicators. AI-related capital expenditure, memory cycle recovery, and deepening domestic supply chain integration are resonating. In terms of market performance, as of September 17, 2026, the Shenwan Electronics Index has accumulated a gain of approximately 36% over the past year and about 32% year-to-date, significantly outperforming major broad-based indices; however, it has corrected about 18% in the past three months, with trading congestion easing somewhat. On valuation, the sector as a whole remains in a premium range. The current rolling P/E ratio of Shenwan Electronics is approximately 66.5 times, with a P/B ratio of about 7.2 times, significantly higher than the CSI 300's approximate 13 times level; semiconductors stand at about 79 times, with equipment and materials sub-sectors even higher, while consumer electronics remains relatively restrained. In summary, the dual-driver pattern of policy and prosperity for the electronics sector remains unchanged, but the market's pricing logic has shifted from expectation expansion to earnings validation. Going forward, more attention should be paid to order visibility, capacity utilization, gross margins, and operating cash flow quality, rather than mere valuation expansion.

3. The plan emphasizes "full-chain integrated circuit breakthroughs, advanced computing, AI hardware infrastructure, energy electronics, photonics industry, and spatiotemporal information." Which areas do you think will become the main lines for fund allocation?

Guo Zhenyue: Given the plan's orientation and commercialization pace, core allocations are likely to converge into three main lines. First, the complete integrated circuit chain, encompassing semiconductor equipment, materials, components, and advanced packaging. This direction corresponds to supply chain security and foundational capability building, with strong policy constraints and long certification cycles. Once entering the qualified supplier system, order stickiness and share stability are relatively higher, making it suitable for medium-to-long-term tracking. Second, advanced computing and AI hardware infrastructure, including computing chip ecosystems, high-speed interconnect, liquid cooling and heat dissipation, high-end PCBs, and packaging substrates. Global and domestic intelligent computing capital expenditure determines the demand slope, and the plan also explicitly calls for substantial growth in computing power supply capacity, making this a demand-side theme with relatively prominent elasticity within the electronics sector. Third, photonics and optical communications-related hardware, including optical modules, optical chips, and supporting interconnect materials. As critical interconnect links for large-scale intelligent computing clusters, performance is highly correlated with the pace of cluster construction both domestically and internationally, while overlapping with the domestic substitution process.

4. Specifically, between semiconductor equipment/materials/EDA/advanced packaging domestic substitution versus AI servers/optical modules/edge AI demand drivers, which will deliver earnings more deterministically during the 15th Five-Year Plan period? Which has greater elasticity? Which is more prone to valuation bubbles?

Guo Zhenyue: Overall, the domestic substitution chain has relatively higher certainty of medium-term earnings delivery during the 15th Five-Year Plan period, while the AI server, optical module, and edge AI chain has greater demand elasticity, and valuation risks could emerge at both ends. The domestic substitution chain (equipment, materials, EDA, advanced packaging) benefits from strong policy rigidity, high customer certification and switching costs, and a relatively steady pace of share gains, with elasticity mainly coming from category expansion and penetration rate climbing. The AI server, optical module, and edge AI chain offers greater demand elasticity with steeper volume-price upgrade curves, but relies more heavily on domestic and overseas capital expenditure pace and technological iteration paths, resulting in greater volatility. Valuation bubble risks exist on both sides. Within the domestic substitution chain, targets with ample long-term narrative but thin current profits and cash flows are prone to overextension; within the demand-driven chain, when consensus expectations are highly aligned and positioning is crowded, rapid corrections are more likely due to expectation gaps. The key is whether the "orders-revenue-profit-cash flow" loop holds.

5. What is your primary investment strategy for the electronics sector? What risks deserve key attention?

Guo Zhenyue: Strategically, I adhere to three principles: First, relatively concentrated main lines with moderately diversified individual positions, with core positions allocated to leaders and bottleneck sub-segments within the AI hardware infrastructure and semiconductor supply chain that have completed key customer validation. Second, replace thematic calendars with industry calendars, focusing on tracking capital expenditure of leading cloud vendors and domestic players, memory pricing, equipment tenders, and material certification milestones. Third, strengthen valuation discipline, allowing for growth premiums but requiring synchronized improvement in revenue growth, earnings quality, and cash flow, prioritizing additions to targets with visible orders and fully digested valuations during adjustment phases. Key risks to watch include: AI capital expenditure falling short of expectations or inventory and price fluctuations caused by technology roadmap shifts, as well as style and liquidity switching against a backdrop of crowded sector positioning. Additionally, since upstream and downstream capacity release may not be synchronized across the industrial chain, bottlenecks in certain segments could slow industry progress. Overall, the electronics sector remains an important battleground for growth allocation during the 15th Five-Year Plan period, with medium-to-long-term success more dependent on execution and delivery rather than policy wording itself.