With the gradual transformation of China’s economy from traditional industries to new economy, the era of equity investment has come. This is the view repeatedly expressed by Duan Guosheng, CEO of Taikang assets, on many occasions since last year.
Research driven value. How can the above research guide and guide business development? How is the equity investment preparation of Taikang assets made? For an asset management institution with insurance background, its strengths and advantages lie in fixed income and debt investment. How can these large-scale traditional advantageous businesses turn under the new economy?
Recently, Taikang asset management team revealed some information about the above problems in interviews with securities times, securities companies and other media in China. It can be seen that this asset management institution with a management scale of more than 2.7 trillion is shifting the layout of all investment lines to new economic ideas, and its key investment fields are big health + consumption and double carbon + technology. This is a big game of chess.
equity investment focuses on “big health + consumption, double carbon + technology”
Duan Guosheng said on the day of the interview on March 28 that Taikang assets will continue to think about some long-term problems and hope to make a forward-looking layout, which is also the reason why it can seize major opportunities in its past development.
the development of any institution is inseparable from the times and the corresponding economic environment. Duan Guosheng believes that China’s economy is changing to high-quality growth: in the past, the driving forces driving China’s economic growth were globalization, industrialization and urbanization. Now the driving forces have been transformed into a long-lived era, consumption upgrading, low-carbon transformation and scientific and technological independence
Accompanied by the transformation process, the financing mode suitable for economic development will shift from debt financing to equity financing, and the new economic development is more suitable for equity financing. Accordingly, from the perspective of investment, in the new economic era, the era of equity investment is coming.
based on the analysis of the changes in the economic, social and demographic situation, Taikang determined that the investment focus in the future will be “two major and two auxiliary”: great health + consumption and double carbon + technology. This has become the “baton” of its business lines
Taking secondary market stock investment as an example, Xing Yi, deputy general manager, chief investment officer and head of Equity Investment Department of Taikang assets, said that the correlation between the capital market and the macro cycle was weakened. At the same time, the old and new economic valuation systems were reconstructed, the structural characteristics of the capital market were obvious, the market was prone to extreme valuation differentiation, and the investment in emerging industries was more difficult and risky. In this context, Taikang proposed to sink the investment and research system from “macro drive” to “industry and track drive”, strengthen the research ability of the industrial chain, improve the cognitive ability of high-quality tracks, grasp the investment opportunities of emerging industries, and actively layout the two major and auxiliary tracks of “double carbon + technology” and “great health + consumption”.
non standard investment business , Li Zhenpeng, deputy general manager of Taikang assets and head of infrastructure real estate investment center, revealed that Taikang realized that the layout and investment in carbon neutral new energy field would be the national strategic development plan in the next 40, 50 years or even longer, so it has clearly regarded “double carbon” investment as the long-term strategy of the company’s investment layout from the group level, plans to set up a 100 billion fund to participate in the investment of double carbon track
in terms of equity investment business , Guo Yue, chief operating officer and director of alternative research of Taikang asset equity investment center, said that he not only pays attention to equity investment opportunities, but also actively participates in asset investment. He hopes to make good use of equity investment as a tool to make it an irreplaceable high-quality variety in insurance capital allocation.
Guo Yue introduced that in the field of equity investment, it will continue to explore in the field of great health and double carbon, and comprehensively embrace scientific and technological innovation. Among them, in the field of general health, facing the 2.0 era of innovation in the field of health, we will invest in teams with more solid technology and stronger comprehensive potential, and steadily promote investment in the field of medical innovation and medical innovation in the process of rational return of capital market.
In the field of science and technology, in the cloud era of big data, we will look for or create asset-based investment opportunities for IDC (Internet Data Center) in infrastructure construction along the chain of technological innovation; Under the background of Xinchuang (information technology application Chuang Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) ), invest in cloud computing basic service providers with explosive demand and import substitution ability in China. “In recent years, we have also realized that new technological innovation will bring broader investment prospects to scientific and technological applications. Therefore, we will focus on mastering the best practice experience of the industry and enabling the leading companies in various vertical industries by using the latest technological means.” Guo Yue said.
In the form of equity investment, Guo Yue said that on the one hand, he will continue to invest in market-oriented funds; On the other hand, we will focus on the development and continuous consolidation of direct investment capacity.
At present, Taikang has two private fund managers, namely Beijing Taikang investment and Taikang health industry fund. Among them, Beijing Taikang investment focuses on financial investment and has a wide range of investment tracks, including great health, science and technology, consumption, etc; Taikang health industry fund focuses on the layout of Taikang in the medical and nursing industry and focuses on strategic investment.
Huang Shengxuan, CEO of Beijing Taikang investment, introduced that the investment stage of Beijing Taikang investment is relatively advanced, and the overall asset allocation of Taikang focuses more on the projects in the innovation VC stage and early growth stage. “Private equity investment belongs to the category of relatively high risk and high return in asset allocation. We require the return on long-term PE equity direct investment to be more than 15%.”
traditional debt investment needs transformation, and it should also focus on Shenzhen New Industries Biomedical Engineering Co.Ltd(300832)
“70% of the traditional creditor’s rights market, whether open market bonds or non-standard creditor’s rights, is related to traditional fields such as real estate, urban investment and cycle industry. We realized a few years ago that traditional creditor’s rights investment needs to be transformed. If it is not transformed, there will be nothing to do in the future.” Duan Guosheng said frankly.
In fact, Taikang assets has a strong ability to issue non-standard products in the field of infrastructure. In 2007, it initiated the establishment of the “Taikang Kaitai railway debt plan” with a scale of 10 billion, which is the first non-standard investment product in the insurance industry; In 2013, the “equity investment plan of PetroChina West first and second line Western Pipeline Project” of 36 billion yuan was established to help the national west to east gas transmission project and the national energy structure adjustment strategy. In the field of people’s livelihood, Taikang assets has also set up a number of debt investment plans to invest in the transformation of shantytowns, with a total scale of nearly 20 billion yuan. It is reported that in 2021, its debt investment plan will issue more than 90 billion yuan of new products. So far, none of its debt plan products has been in material breach of contract.
Duan Guosheng is worried about “nothing to do” in debt investment. The reason is that with China’s economic transformation and upgrading, the peak period of investment and financing mode with infrastructure and real estate as the core in the process of urbanization has passed, and the business direction needs to be shifted around the debt investment of traditional infrastructure real estate.
For example, we should invest in emerging industries, such as new energy and IDC.
at present, the debt investment business has also felt “asset scarcity”. Li Zhenpeng said frankly, “under the background of intensified risk differentiation, wide structural credit and weak financing demand of the real economy, it is more difficult to obtain desirable assets, which is the biggest challenge facing the creditor’s rights business.”
For the transformation direction, Li Zhenpeng introduced that the company has obtained the issuance qualification of asset support plan, which will promote the transformation of business to asset securitization. At the same time, it is also exploring cooperation modes in new economy and new fields, such as equity investment in PPP field, mezzanine investment in asset securitization products, disposal of non-performing assets, etc. these businesses have been implemented. For example, last year, the research results in the field of new energy were applied to the field of asset securitization, and the green wind power asset ABS products with a scale of nearly 2 billion yuan were issued.
Li Zhenpeng revealed that the current layout around the field of new energy includes a large number of allocation of fixed income assets that can generate cash income in a stable period, such as large-scale scenery new energy power generation assets, distributed energy assets and charging for electricity infrastructure, and gradually introduce energy storage and other related investment layout.
“Double carbon belongs to the competition of energy. To realize the large-scale systematic allocation in the field of new energy, it is very dependent on the large-scale and rapid integration of project resources at the bottom and the fine management of the whole process of the whole life cycle at the asset end.” Li Zhenpeng said that he hopes to work with excellent new energy partners to embrace the investment opportunities on the road of carbon neutral and long-term competition in a flexible and diverse way, so as to realize the large-scale allocation of insurance capital for such “fixed income +” asset types.
The new energy partners it hopes to seek include power station operators, manufacturers in the new energy industry chain, such as fan manufacturers and component manufacturers, as well as market-oriented managers with experience in new energy asset operation and management.
In addition, in terms of infrastructure non-standard investment business, Li Zhenpeng introduced that there are several key areas in the future: first, pay attention to the infrastructure needs brought by the integration of urban agglomeration, and deeply tap the capital needs of industrial investment incubation and park operation and development. Second, explore opportunities for debt business in the field of carbon neutralization of new energy, long-term layout of assets in line with ESG’s investment philosophy, and build a sustainable investment portfolio. Third, continue to pay attention to the new infrastructure and tap the investment opportunities of major projects in the 14th five year plan. Fourth, focus on new real estate investment to effectively improve the living standards of the people, such as affordable housing, rental housing and talent apartments, and actively participate in urban renewal projects in key regions.
focus on high-quality real estate projects such as great health and double carbon
If the focus turns to the new economy, will there be investment in real estate or real estate industries? Especially since last year, the reduction of insurance funds and the news of “abandoning” real estate have been reported in the newspapers from time to time. Taikang plans to reduce its Yango Group Co.Ltd(000671) shares by clearing positions. What trend does this represent?
“The changes in the real estate developer market do not represent the changes in the whole field of real estate investment.” Guo Yue said that the gradual reduction of Yango Group Co.Ltd(000671) shares was due to market changes, but insurance funds have the characteristics of long term, large scale and stable source, which naturally fit with real estate investment. In fact, in the practice of Chinese and foreign institutional investors, real estate has always been an important investment variety.
she added that real estate investment or real estate investment includes not only the stock investment of real estate developers, but also the investment on the asset side related to real estate. Moreover, real estate assets still have great development space. In terms of equity investment, in Taikang’s investment layout, we not only invest in the equity of real estate enterprises, but also pay attention to the equity investment of holding properties
According to the introduction, Taikang has actively arranged warehousing and logistics assets in the past three years. At present, the stock assets held in the field of warehousing and logistics are more than 10 million square meters, and the holding assets account for about 15% of the high-standard positions in the whole market.
“In our opinion, real estate investment has the core of long-term value creation and long-term allocation value for insurance funds.” Guo Yue said that in the future, according to its own investment philosophy, it will continue to increase research and investment in the field of real estate investment in line with national policies, such as high-quality real estate projects such as great health and double carbon, so as to improve the quality and efficiency of insurance funds serving the real economy.
In addition, Taikang assets is also optimistic about the investment prospect of public REITs. Zhu Peijun, chief investment officer of Taikang assets and financial products and head of financial products investment department, said that the scale of China’s existing infrastructure assets exceeds one billion, and the market scale of public REITs is expected to exceed one trillion in the future.
In June last year, the first batch of nine public REITs raised about 30 billion yuan were listed. Insurance funds are an important source of strategic placement in addition to the original equity holders. A total of 6 insurance capital institutions have become strategic investors of public REITs, namely China Insurance Investment Fund (limited partnership), Taikang Life, Ping An Life, everyone investment holding, China Re life insurance and China Re property insurance. Among them, Taikang Life invested 1.369 billion yuan to become a strategic investor in three projects, including prolos, Yangang REIT and Shougang green energy.
Zhu Peijun introduced that Taikang assets’ investment in public REITs will focus on the logic of “allocating core assets”, hold high-quality assets for a long time to obtain sustained and stable cash flow, and focus on the fundamentals of public REITs. At present, the more promising areas include high-quality assets in line with the country’s future development direction, such as logistics, IDC and new energy.
Zhu Peijun also put forward policy expectations for the public offering REITs business, suggesting that a new official valuation method can be developed in the whole market, and the fundamental value of REITs can be disclosed in real time based on the asset itself rather than the market price, so that financial institutions for the purpose of long-term holding can reduce the impact of market fluctuations of REITs on net worth and statements.
