"Real investors should think about investing in terms of ten years, not quarters. This is the investment philosophy embraced by Baillie Gifford, the catcher of global super growth stocks.

Baiji's investment strategy is long-term global growth strategy (Long Term,Globle Growth, referred to as LTGG), which is to explore and invest in the most competitive, innovative and efficient high-quality enterprises around the world for a period of more than five years.

SMIT (Scottish Mortgage Investment Trust) is the flagship product of Baiji Investment, which was founded in 1909 and has achieved an investment return of 933% in the past decade. Judging from the latest top 10 heavy stocks announced by this product, after holding nearly 10 times Tesla, Inc. 's floating profits for seven years, SMIT has already sold about 80% of Tesla, Inc. 's positions in the second half of 2020, greatly reducing Amazon.Com Inc, which has been running with it since 2004, and paying off its positions in Facebook and Alphabet Inc-CL C.

Instead, SMIT is the head company of the Genentech track all the way. As of August 31 this year, Modena (Moderna Inc) had leapt to the top of the SMIT, accounting for 8.7% (close to the top position). In the 2020 annual report, SMIT appeared in Modena's top 10 stocks for the first time, accounting for only 3.5%. The meaning behind Modena's name is Modified RNA (modified RNA), and the outbreak of COVID-19 allowed startups like Moderna Inc to bring mRNA vaccines to market in a short period of time and achieved great commercial success.

Innamei (Illumina Inc), a genetic testing company, is currently the second largest stock in SMIT, accounting for 6.3 per cent, compared with 5.8 per cent in last year's annual report. Judging from Modena and Inami, the first two big stocks, Baiji is currently betting high on the genetic track.

SMIT adheres to the portfolio investment style, with the top 10 heavy stocks accounting for 43.6%, namely Modena, Inami, ASML Holding NV, Tesla, Inc., Tencent, NIO Inc. Automobile, Express Superman, Meituan, BABA and Amazon.Com Inc. In terms of subdivision, the heavy positions invested by the global super growth stock "catcher" Baiji are located in six popular tracks, including genetics, chips, electric cars, games and social media, takeout and e-commerce. This issue of the brokerage China Investment Little Red Book reviews the stock trends of companies such as Modena and Inami, and uses the perspective of SMIT fund managers to observe the huge investment opportunities in the next decade.

Genetic track: subverting Healthcare, the next exponential opportunity to compete with Internet companies

Modena became the latest winner of the bet made by Baiji Investment after reducing its stake in Tesla, Inc.. As of August 31 this year, Modena became the largest stock in SMIT, accounting for 8.7% of the position. Modena replaced Tesla, Inc. 's previous position as the largest stock.

Thanks to the success of the new generation of COVID-19 vaccine, Modena has increased 15-fold since 2020. Modena's latest market capitalization of $125.6 billion is comparable to that of established pharmaceutical companies such as Bristol-Myers Bristol-Myers Squibb Co, Sanofi and Amgen Inc.

In the field of medical services, rising star Modena's financial data can be said to reach prehistoric figures. According to the latest financial statements, the company earned $4.4 billion in the second quarter of this year, up from $67 million in the same period last year, made a profit of $4 billion in the first six months of this year, and lost $240 million in the first half of last year. According to the company's latest performance guidelines, COVID-19 vaccine is expected to supply 8-1 billion doses in 2021 and 20-3 billion doses in 2022. COVID-19 's vaccine revenue is expected to reach US $40 billion-60 billion in 2022.

Tom Slater, mutual fund manager of SMIT, believes in the 2020 annual report that Modena's technology application in the medical field will be the most exciting investment opportunity in the next decade. Modena is a household name for COVID-19 's RNA vaccine, but mRNA technology has a wider use. Modena is similar to a software company that achieves therapeutic goals by writing RNA code for human cells, which aims to address a wider range of applications. Make adequate preparations to improve the chances of success from the clinical stage to the extreme of business.

James Anderson, a mutual fund manager at SMIT, said it was shocking that Modena could produce a vaccine without even the associated virus in the laboratory. People think that Modena is just a miracle brought by COVID-19 's vaccine, but this is a huge misunderstanding of the long-term opportunities facing Modena. Modena has great leadership potential in the treatment of the four major killers of human health-autoimmune diseases, cardiovascular diseases, cancer and epidemics.

Modena's name means Modified RNA (modified RNA). The outbreak of the COVID-19 epidemic has given startups like Moderna Inc the possibility of bringing mRNA vaccines to market in a short period of time, so as to promote the whole field of drug research and development towards mRNA treatment. Analysts believe that since mRNA was first successfully extracted in 1960, 60 years later, the scientific community has obtained the epoch-making COVID-19 mRNA vaccine through the transformation of mRNA, which is of great significance at an unexpected speed.

Tesla, Inc. CEO Elon Musk also said at the beginning of the year: "the future of medicine is mRNA, basically you can use mRNA to cure everything." It is like a computer program that you can program to perform any operation you need. You can even become a butterfly. "

SMIT's second-largest stock is Inamey, a maker of genetic sequencing instruments, which combined accounts for more than 15 per cent of positions.

In terms of the genetic track as a whole, James Anderson believes that from the perspective of the American market, the current investment opportunities in the medical field are very attractive, in a sense, the collapse in the cost of gene sequencing and the exponential growth of machine learning and artificial intelligence are used in medical services, this trend is inevitable, and cutting-edge applications have begun to translate into real income in medical services.

Chip track: the advent of artificial intelligence and autopilot have exacerbated the shortage of chips.

ASML Holding NV is the third largest stock in SMIT, accounting for 5.9% of the position. ASML Holding NV has soared nearly 50 per cent this year due to the spread of the chip shortage. The company currently has a market capitalization of $300 billion and a dynamic price-to-earnings ratio of 50 times.

In James Anderson's view, ASML Holding NV is undoubtedly the most important company in the era of the Internet, big data and autopilot. ASML Holding NV is the lithographic system of the semiconductor manufacturing industry. Without ASML Holding NV, Moore's Law will not exist. ASML Holding NV has a monopoly.

Semiconductor chips are scarce in both short-term and long-term, and both AI and autopilot aggravate the shortage of semiconductor chips. ASML Holding NV is an important company to ensure the operation of the world, and its share price has risen as a result, which will be clearer in the future. "James Anderson said.

Electric car track: Tesla, Inc. 's competitiveness is still outstanding for a long time.

Tesla, Inc. has risen another 15 per cent this year, on the basis of a sevenfold increase last year. In SMIT's 2020 semi-annual report, Tesla, Inc. is still the largest heavy stock, accounting for 12%. In the 2020 annual report, Tesla, Inc. has been reduced to the fifth largest stock in SMIT, accounting for 5%. As of August 31 this year, Tesla, Inc. 's position share further reduced to 4.3%.

Tom Slater says that in order to maintain a reasonable diversification of the portfolio and focus on more potential returns, about 80 per cent of Tesla, Inc. 's positions have been sold in the past year, but Tesla, Inc. will remain competitive for a long time to come. If Tesla, Inc. can rely on artificial intelligence to achieve most of the autopilot, Tesla, Inc. will be more competitive.

Tom Slater also believes that Tesla, Inc. relies on the continuous upgrading of quality and the expansion of production to become the leader, and other companies are followers.

Games and Social Media track: Tencent is greatly undervalued

Tencent is the fifth largest stock in SMIT. Tencent has fallen nearly 15 per cent so far this year due to regulatory policies. Tencent's current market capitalization is HK $4.6 trillion, and the dynamic price-to-earnings ratio has fallen to 20 times.

James Anderson believes that Tencent's layout in the game industry is very eye-catching and far exceeds that of its US counterparts. SMIT expects Tencent's game industry's revenue to rise from $20 billion to $50 billion in the next five years, while profit margins will remain unchanged at 40 per cent. Tencent's current market capitalization of $730 billion only reflects the profits of his game industry, and Wechat and other assets are equivalent to giving away.

Tencent is also the best capital redistribution company, with 20 per cent of Meituan, 12 per cent of Tesla, Inc. and 12 per cent of Snap Inc. These are only some cases, and Tencent also plays an excellent guiding role in the companies he invests in. Tencent's market capitalization is greatly undervalued under the fear of market sentiment. "

James Anderson said that Tencent's game industry has supported its future market value, and its game industry is even stronger than before. Tencent has 40 games this year. Compared with American technology platform companies, Tencent's valuation is more attractive. Tencent's full layout in the cloud is a major growth point in the future.

Takeout track: the high-frequency demand for catering is the key to understanding the takeout track.

SMIT is optimistic about the takeout track. Its seventh largest position stock is takeout Superman, accounting for 2.9% of the position, and the eighth largest stock is Meituan, accounting for 2.8%.

Tom Slater believes that people are more and more accustomed to receiving more goods at home, and the speed and efficiency of takeout companies will double with the expansion of the scale of takeout goods and the rapid increase of the categories and services of takeout goods and services. Meituan and Superman takeout in Southeast Asia have expanded from catering to department stores and other convenience products, and Doordash takeout in the United States is doing a similar expansion.

James Anderson believes that when people realize the importance and high frequency of catering to offline demand, the market will understand that the boundaries of takeout companies can be extended to department stores and other local items over time. People will realize that takeout is a very good business model with a much bigger market than people previously thought. The takeout company, which is killing into the distribution of department stores and other necessities, will continue to grow at a compound growth rate of 30%, 40%, and a gross profit margin of more than 50% over the next decade.

E-commerce track: Amazon.Com Inc still faces a wide range of opportunities

The ninth and tenth largest positions in SMIT are BABA and Amazon.Com Inc, accounting for 2.8 per cent and 2.7 per cent, respectively.

Tom Slater believes that SMIT sold Facebook and Alphabet Inc-CL C and reduced its position in Amazon.Com Inc. Although these companies can generate huge cash flow and grow rapidly, the problem for SMIT is how to allocate resources and grow further in such a large volume. Amazon.Com Inc still faces the broadest range of opportunities, but Bezos' departure from his position as CEO may make the company less aggressive in innovation and be wary of it.