Since this year, the capital market has experienced a cold winter rarely seen in the past. A shares, Hong Kong shares and China concept shares have ushered in adjustments. The net value of many fund products has fallen, investor confidence has cooled, and some private placement managers have reduced their positions.
In this regard, Liang Hui, founder and general manager of 10 billion private equity gathering capital, said in an interview with the China reporter of the securities times securities firm, “now is a good time for stock investment. I have turned to optimism in an all-round way, and I am full of self purchase and full of confidence.”
Liang Hui believes that the market adjustment since this year is the result of the superposition and resonance of internal and external factors such as real estate, the epidemic and the Fed’s interest rate hike. However, the negative factors in these markets have occurred, which can be said to be exhausted. Although there is not much good news now, the policy expectation will be clearer and the confidence of the whole market will be further improved in the second quarter.
Liang Hui stressed that the current market is at a historic bottom, the return on investment risk is very cost-effective, and the risk compensation is at a high level. In terms of the decline range, the decline of about 30% of the share price of high-quality companies is similar to that in 2016 and 2018, and the decline range of the share price is large enough. In terms of operation, the direction of long-term configuration growth remains unchanged, continue to seek long-term sustainable value growth of enterprises, earn money for enterprise growth, and firmly value the three major fields of new energy vehicles, photovoltaic and military industry
bad out, now at the historic bottom
“Although there are not many good news, the bad factors in the market have occurred, and there is a high probability that they will not deteriorate further. It can be said that the bad news is exhausted. At this time, combined with the overall position of the market, we judge that the market is at the bottom.” Liang Hui said.
Liang Hui believes that there were four relatively large negative factors in the previous market. The first is the continuous decline in real estate sales, the second is the multi-point outbreak of the Chinese epidemic, the third is the market expectation of the Federal Reserve’s repeated interest rate hikes and the conflict between Russia and Ukraine, and the fourth is the reduction of market incremental funds caused by the shrinking amount of new funds.
At the “316” meeting of the financial committee, high-level officials have paid considerable attention to these concerns about the short-term uncertainty that plagues the market. Relevant policies have undergone marginal changes, and there are obvious signs of relaxation. In the second quarter, with the clearer policy expectations, the confidence of the whole market will be further improved.
Specifically: first, the real estate market. At the demand level, real estate has become an important starting point for maintaining growth. All localities have begun to reduce mortgage interest rates and relax purchase restrictions. At the supply level, some highly leveraged real estate problem enterprises are basically in the state of individual digestion and have not formed a spreading trend. However, real estate enterprises operating normally can still obtain financing from the banking system, and the banking industry does not restrict collective loans to real estate enterprises. With the improvement of financing conditions of real estate enterprises and the optimization of supervision measures for real estate pre-sale funds, Liang Hui tends to believe that the worst situation in the real estate market has occurred and the impact of market deterioration will not spread further.
The second is the development of the epidemic in China. This round of Omicron is highly contagious. It is believed that under the strict control policy, the probability of further large-scale outbreak in the country is relatively low. It can be said that the market did not start to rise when the cases peaked and fell, but began to rise when we had expected that the epidemic would not spread after the introduction of strict control policies.
Third, the United States is expected to raise interest rates. After the conflict between Russia and Ukraine, the global supply chain and industrial chain have been readjusted and rebalanced, which will inevitably lead to the upward movement of many commodity price centers. The direct impact of the Fed’s interest rate hike on China lies in the capital level. When the policy can make a better response, especially if China’s economy is stable and upward, it will not be greatly affected. From the history of the Fed’s interest rate hike in 2015 and 2018, the impact on China is relatively short-term and has little impact.
Fourth, the market sentiment was significantly boosted. The market adjustment since this year is the superposition of internal and external factors such as real estate, the epidemic and the Federal Reserve’s interest rate hike, and is mixed with events such as the US attack on China’s science and technology industry and China concept stocks, causing a multi-point resonant sharp decline in the market. Now, with the further implementation of relevant response policies, each negative event has entered a marginal easing state, and the market sentiment has been greatly eased. Liang Hui expects the medium and long-term market confidence to be further enhanced.
full warehouse self purchase, full of confidence in the future, and the risk return ratio of stock price is attractive enough
“We have bought our own products with full positions and have more confidence in the stocks we choose.” Liang Hui said that from a week ago, it has turned to optimism. Although the decline still occurs from time to time, each adjustment must mean the arrival of more appropriate buying points. Standing at the moment, even if it’s not at the bottom, it’s already at the bottom of the range. The falling space has been compressed enough. There’s no reason to be depressed. It’s time to regain confidence.
Liang Hui believes that looking at the stock market trend over the years, extreme markets only occupy a small part of the time, volatility is the norm, and extreme markets cannot last. Since 2015, extreme declines similar to those in March have occurred only in the second half of 2015, early 2016 and 2018
In the extreme downward trend in March this year, institutional investors successively reduced their positions in the growth industry, and even trampled on funds. The severity is second only to the extreme situation in 2015, which is a little unexpected. The falling market has stimulated the demand for closing positions of more products. There are more and more passive closing positions, and the downward force is greater and greater, forming a snowball negative feedback, which has not been experienced since 2015.
In terms of the decline range, the share prices of excellent companies in “Mao index” and “Ning portfolio” fell by 20% – 30%, which was similar to the decline range during the sharp decline in 2016 and 2018. Therefore, most fund products on the market face more or less net value shrinkage. In this snowball negative feedback situation, there must be external policy forces to hedge the downward pressure of the market in order to stabilize the situation.
Liang Hui believes that after the extreme downward market, the current investment risk return is very cost-effective, and the risk compensation is at a high level, which is a good time for stock investment.
First, the risk return ratio of stock price is attractive enough. Investment cannot talk about income without risk, and it is impossible to talk about income without risk. In terms of the decline range, the share price of high-quality companies has shrunk by about 30%, which is similar to that in 2016 and 2018, and the decline range of share price is enough.
Second, the matching degree between valuation and fundamentals is always the core of growth stock investment. From the perspective of valuation, the adjusted valuation quickly returns to a reasonable level or even below a reasonable level; At the same time, the profitability of companies with excellent growth has further digested the overvalued value, making the matching level between valuation and fundamentals to a position where they can invest comfortably.
Third, in the context of “steady growth”, various policy tools have a lot to do. It is expected that relevant positive policies will continue to be issued in the future to escort the steady growth of the economy.
Fourth, long-term funds are ready to go. Including the insurance asset management plan, it is estimated that more than 2 trillion yuan of incremental funds can be added.
balanced layout, stick to the growth track and be optimistic about new energy vehicles + photovoltaic + military industry
facing the marginal easing of policies such as real estate, the real estate sector has continued to rebound since last week. Liang Hui believes that the current valuation of these sectors is at a historical low, which will bring opportunities for valuation repair when the policy turns. But these may not be the best investment directions this year
Liang Hui said that in terms of operation, the direction of long-term allocation and growth remains unchanged. He continues to seek long-term sustainable value growth of enterprises and earn money for enterprise growth, which is mainly optimistic about three areas.
First, firmly optimistic about new energy vehicles. Liang Hui judged that the probability of this year could reach the level of 5 million vehicles. Originally, the market expected that the rise of lithium price would lead to the rise of electric vehicle price and then affect the demand. However, during the tracking data and research, it was found that the market’s concept of electric vehicles changed rapidly, and the upward trend of electric vehicle penetration is not expected to change. Therefore, we will focus on some links that are less affected by lithium price and do a good job in configuration.
Second, we are optimistic about the photovoltaic industry. This year’s photovoltaic market is better and better than last year. The global shift from fossil energy to green energy has been further strengthened after the conflict between Russia and Ukraine. Most countries are stepping up efforts to reduce their dependence on crude oil and natural gas. Therefore, photovoltaic, wind power and sea breeze are very promising in these fields.
Third, we should be optimistic about the military industry. This year, the national defense budget continued to maintain rapid growth, which exceeded the growth rate of GDP, which basically determined the growth level of the military industry in the next few years. We will also look for enterprises with outstanding competitiveness, core technology and material preference in the military industry for key allocation.
Apart from the growth of the main layout, Liang Hui said that the value will be relatively balanced, and gold will have a stage opportunity, and Baijiu and other sectors will be properly allocated. “We hope to achieve higher returns through balanced allocation while trying to reduce portfolio volatility and strive to bring good investment experience to investors.”
