Recently, affected by the huge shock of overseas stock markets, many technology stocks in the A-share market have significantly corrected. On March 18, Hu Weitao, chairman of Shenzhen Wanli Fuda Investment Management Co., Ltd., said in an exclusive interview with the reporter of China Securities Journal that industries and enterprises will have different degrees of differentiation due to the epidemic, and leading enterprises with good competition pattern may usher in “structural” growth opportunities. As far as technology stocks are concerned, they need to be screened from many aspects such as competition pattern, cash flow and valuation. The short-term style switching of the market has brought down the valuation of high-quality assets, which instead provides an opportunity to continue buying.
leading enterprises or meet growth opportunities
Hu Weitao believes that the “black swan” incident has a greater impact on the short-term psychological level than on the long-term economy. In general, industries and enterprises will be differentiated to varying degrees due to the epidemic. “For small and medium-sized enterprises with high fixed costs and rigid expenses, lack of cash flow, highly leveraged management and weak brand strength, the impact of the epidemic is real, short-lived and fierce; for leading enterprises with strong brand strength, light asset management, abundant cash flow, high voice in the industrial chain and good competition pattern, they may usher in ‘structural’ growth opportunities.”
Specifically, the impact on the catering industry is the most direct and severe: from the demand side, catering enterprises have generally closed down since the Spring Festival this year, and their phased revenue has declined; From the cost side, continuous staff costs, rental costs and inventory backlog will not only lead to a decline in profit margins, but also a severe test on the cash reserves of enterprises.
“Compared with some catering enterprises with weak voice in the industrial chain, highly leveraged operation, high hard spending and lack of free cash flow, brand enterprises have more room to adjust. Taking history as a mirror, the epidemic will have a strong quarterly impact on the industry as a whole, but with the gradual disappearance of the impact of the epidemic, the catering industry has an obvious restorative growth in the following quarters.” Hu Weitao said.
Spring Festival is the peak season for Baijiu consumption. This year’s epidemic also caused many people worry about the first quarter of Baijiu industry. Hu Weitao pointed out that the seller’s latest channel research results show that strong brand strength Baijiu enterprises and terminal inventory are relatively healthy, and the price is stable, channel profits, confidence and order are guaranteed. In contrast, the short-term impact of the epidemic is real for some small and medium-sized liquor enterprises with weak brand strength and poor inventory. “After a” epidemic “, Baijiu industry structural growth and concentration of the industry trend may accelerate, such an opportunity is worth investors grasp and layout. Hu Weitao said.
screening technology stocks in three aspects
On February 14, the new refinancing regulations were implemented. In Hu Weitao’s view, the purpose of the policy is to guide capital into the real economy, and the “deregulation” of refinancing will boost the short-term boom of gem to a certain extent. For how to select technology stocks, he believes that we should start from three aspects.
“First, it depends on whether the competition pattern of enterprises is stable. In history, many high-tech companies did create a lot of social value, but ultimately did not bring good returns to investors. Second, it depends on whether the cash flow is predictable and sustainable, which is the basis for identifying the internal value of enterprises. The core difference between science and technology stocks and whether they can produce predictable and sustainable cash flow lies in business Mode stability. The business model of many technology driven enterprises is full of variables; Third, we should pay special attention to valuation, because in the long run, the stock price trend is always consistent with the fundamentals of the company, and high-quality enterprises with stable performance growth represented by Shanghai and Shenzhen 300 will be more and more scarce. For a long time, the CSI 300 and the gem will deduce the mean regression in two different directions, and such long-term differentiation deserves attention. ”
In Hu Weitao’s view, the current global covid-19 pneumonia epidemic is still uncertain, but Hu Weitao holds a positive attitude towards the resilience of the world economy, especially China’s economy. “We pay more attention to a number of high-quality assets in China. Their long-term intrinsic value has hardly changed, and their valuation is in the range of reasonable or even low. In the transformation process of China’s high-quality economic development, these excellent enterprises have achieved sustained and steady performance growth, which is due to a variety of competitive advantages such as competition pattern, pricing ability and governance ability. In the future, we will hold A portfolio of high-quality enterprises will continue to create rich long-term returns for investors. The short-term style switching of the market has brought down the valuation of high-quality assets, which instead provides an opportunity to continue buying. ”
Hu Weitao said that China is already the second largest economy. In this context, the equity of high-quality enterprises will be the best way for ordinary people to share China’s economic dividends. At the same time, the Chinese government has also demonstrated its strong handling capacity and efficiency in the face of emergencies, “the original inexpensive high-quality enterprises are likely to become a value depression again after this round of adjustment”.
(China Securities Journal)
