Investment Strategy Report

Our investment thesis in this section is to capture the four biopharmaceutical companies that

have the capacity to research and develop COVID-19 vaccine in the United States, which are

Pfizer, Sanofi, GlaxoSmithKline and Merck KGaA.

Among these biopharmaceutical companies, Pfizer is the world’s biggest concern and it’s also

the most successful one so far. Hence, there is doubt that Pfizer’s vaccine accounts for the

highest proportion of our investment.

Pfizer is an American multinational pharmaceutical corporation. Atorvastatin is a medication

used together with diet to lower blood levels of “bad” cholesterol, to increase levels of “good”

cholesterol, and to lower triglycerides. So far, it’s the world’s most prescribed cholesterol

lowering drug and the No.1 prescription drug. For the patients who is suffering from diabetes, and high risk of cardiovascular diseases such as hypertension, the presence of Lipitor reduced major cardiovascular events, saved lots of lives.

Pfizer’s employees are led by CEO Albert Bourla. Albert Bourla officially assumed the position of CEO on January 1, 2019

Pfizer does not have a controlling shareholder of 99%. Its largest shareholder is The Vanguard Group, Inc. with an 7.67% stake

Up to 2020, the global order quantity of these four biopharmaceutical companies vaccines

are approximately 1.4 billion. Even though investing is always risking, negative news of Pfizer

such as the former CEO of Pfizer cashing out and the death of vaccinators, but as the COVID-

19 continues to worsen, the vaccine industry remains the best way to revive the economy,

and solve this global problem let world recover from the chaos as soon as possible.

In this section our investment with a view to the company that can manufacture protective

equipment for the COVID-19 prevention, such as masks and protective clothing. Honeywell

International company and 3M company are the two companies that we invest in.

Honeywell International is an American publicly traded, it primarily operates in four areas of business: aerospace, building technologies, performance materials and technologies (PMT), and safety and productivity solutions (SPS). The 3M Company is an American multinational conglomerate corporation operating in the fields of industry, worker safety, US health care, and consumer goods.

Due to of the COVID-19, the death toll now stands at 1.7 million, and now 22 million people

diagnosed with COVID-19, people who are not infected also need protection. The number

of infections continues to grow every day. The average person uses five to seven masks a

week, and the world’s population is approximately 7.6 billion which means everyday a lot of

masks are used every day. Therefore, the demand for protective equipment, such as masks

will only increase in the next two or three years untill the COVID-19 is over. Self-dependent

innovation will help Honeywell International and 3M company formed their own competitive

advantage. As a result, we think Honeywell International and 3M company will continue to

play an important role in the world, and profits will continue to grow.

In COVID-19 this case, face to face communication has become the biggest challenge for

the epidemic prevention and economy. Hence, Zoom Video Communications became our

investment target.

Zoom is an American communications technology company, It provides videotelephony,

and online chat services through a cloud-based peer-to-peer software platform and is used

for teleconferencing, telecommuting, distance education, and social relations.

Videoconferencing this function was provided by Zoom which played an important role in

supporting social activities during this special period. The number of registered user have

increased dramatically this year.

Currently, with the prosperity of online communication industry has attracted some

emerging competitors such as Ding Talk and Tencent Meeting. As a result, investing in

Zoom this technology company is a crucial decision; during the boom, it will bring us

unprecedented profits.

Electric vehicle is a newborn product. It uses electricity as energy source which is cleaner and

cheaper than fossil fuel. We believe that electric vehicle has a huge potential in the future,

and it will replace gasoline vehicles becoming the common vehicle in our life. In case of

environmental protection and reduce cost of travel, electric vehicle will be encouraged by the

government and popular among people in the world. We see this investment as a long-term

invest, therefore we may experience slump in stock in present. However, do not seek for its

current value. Even though its value rises a little, we still won’t sell it now, because we are

confidence about its huge value in the future. Of course, there are many companies in the electrical vehicle market like SAIC, BYD, GEELY and NISSAN etc. These companies have a bright future and they did a good job in the present too. This prove that the electric vehicles are growing fast and have huge potential. Even though these companies got better and better, Tesla is still the most competitive and representative electric vehicle company among all. Tesla had decided to invest a new battery called 4680 battery. “The new form factor eliminates the tabs, increases energy density, maintains similar thermal characteristics of smaller cells, improves the power-to-weight ratio, streamlines manufacturing, and lowers cost.” This investment will differ Tesla from all electric vehicle company. Tesla will manufacture their own cell and achieve vertical integration. Just like what Elon Musk, the CEO of Tesla said “We intend to increase, not reduce battery cell purchases from Panasonic, LG & CATL (possibly other partners too). However, even with our cell suppliers going at maximum speed, we still foresee significant shortages in 2022 & beyond unless we also take action ourselves.”

About 50000 Tesla’s employees are led by the CEO Elon Musk who invest 6.3million dollar on Tesla on 2004 and became the chairman of Tesla. Tesla always had the foresight to design and invest high-tech products which is far beyond the development and technologies nowadays. Therefore, the product won’t be generally acceptable and or steady. Their investments are also creative and unique. Some investment may not fit or bring to practical now. Therefore, they may have huge potential as well as huge risk to invest. In addition, other companies are also very strong and they are seeking for a chance to take the lead in the competition among electric vehicle market.

To sum up, our investment strategy is mainly divided into COVID related and non-COVID

related. In COVID-19 related industries, vaccine biopharmaceutical, medical protection, and

some emerging industries such as ZOOM that supported by the COVID-19. In non-COVID

related, we focus on traditional industries such as Tesla and JD, and we invest based on the

company’s historical performance, the latest scientific and technological achievements.

Although we didn’t achieve high returns in this short term, we strongly believe that we make

the right investment decisions and hold these stocks patiently for the long-term, thus we

will gain unexpected returns.