with the delisting and selling taking turns, the once hot zhonggai shares have fallen by $760 billion in the past year alone, and the total market value has evaporated by one third. Since this year, more than 30 companies in China have fallen by more than 90%. Despite the headwind of China concept shares, from the recently disclosed position data in the first quarter, the confidence of foreign institutions in China's long-term assets remains unchanged
China International Capital Corporation Limited(601995) believes that one of the most important factors affecting the future trend of Chinese concept shares listed in the United States is still the progress of negotiation between the regulatory authorities of China and the United States. On the whole, China US regulatory cooperation is moving in a positive direction
Over the past period of time, there was a story widely circulated on the Internet: two years ago, Apple's market value was one against five, equivalent to the sum of Alibaba, Tencent, meituan, JD and pinduoduo; Two years later, Apple's market value is more than that of China's 54 Internet technology enterprises combined.
However, recently, with a number of large international investment institutions submitting the first quarter 13F position report to the securities and Exchange Commission (SEC), it can be seen that foreign investors have begun to re-examine the investment value of Chinese Internet technology enterprises.
China's statement at the recent high-level meeting that it supports the standardized and healthy development of the platform economy also seems to boost market confidence to a certain extent.
foreign capital bullish
On May 16, JPMorgan Chase released its latest research report, comprehensively looking at the leading enterprises of China's Internet technology, and raised the ratings of Tencent, Alibaba, Netease and meituan to "super allocation".
JPMorgan pointed out that it is re examining the short-term and long-term fundamental prospects. China's Internet industry is getting rid of various uncertainties and will be driven by short-term and long-term fundamental factors. In the future, the share price of the head company may rise more than expected.
JPMorgan funds China fund a (ACC) – USD, JPMorgan's flagship China fund, significantly increased its position in JD in the first quarter. By the end of the first quarter, JD had risen to the fourth largest heavy position stock of the fund, with a market value of US $212 million. In addition, the fund also increased its positions in Tencent and Alibaba by a small margin.
Hhlr, a subsidiary of Hillhouse, increased its holdings in the first quarter and bought a number of China concept stocks, including vipshop, jd.com, shell, manbang, futu, etc.
Qiaoshui added positions to Alibaba, pinduoduo, Weilai, ideal, Xiaopeng automobile, etc. in the first quarter.
Jinglin assets bought Jingdong, kraneshares, China Overseas Internet ETF, shell, Netease and manbang.
BlackRock, the world's largest asset management institution, also significantly increased its positions in the first quarter of this year, including two "new car making forces" of ideal automobile and Weilai.
Fidelity International substantially increased its holdings of meituan, jd.com, Alibaba and Tencent in March this year.
regulatory improvement
Looking back on the sharp decline of China concept shares, China's anti-monopoly regulatory policy on the Internet has accelerated the selling tide of China's Internet technology stocks by superimposing a series of negative factors such as the US Federal Reserve's interest rate hike this year, the situation in Russia and Ukraine, and the delisting warning of US regulators to China's Listed Companies in the United States.
Chen Dong (pseudonym), manager of private equity funds in Shanghai, said in an interview with the reporter of the international finance news that China launched a series of intensive policies for the Internet industry in 2021, mainly focusing on antitrust and disorderly expansion. I believe that the starting point of the policy is to standardize the development of the industry and clarify the boundaries and rules.
Chen Dong believes that from the perspective of global development trend, the Internet industry is still an innovative and vibrant industry; It still has the attraction of the best talents of Chinese enterprises and advanced corporate governance. In the process of studying Internet enterprises, it can be found that Internet companies are the industries that invest the most in the summary of methodology and the judgment of cutting-edge trends in various industries. It is believed that such companies cannot grow for a long time. From the perspective of the government, I believe and do not want to let China's Internet development lag behind the global industrial trend.
At the special consultation meeting on "promoting the sustainable and healthy development of the digital economy" held by the CPPCC National Committee on May 17, Liu He, member of the Political Bureau of the CPC Central Committee and vice premier of the State Council, pointed out that the global digital economy is showing new features such as intelligence, quantization and cross-border integration. We should strive to adapt to the all-round changes brought about by the digital economy, fight for key core technologies, support the sustainable and healthy development of the platform economy and the private economy, handle the relationship between the government and the market, support digital enterprises to be listed in the capital markets outside China, promote competition with openness and innovation with competition.
delisting
Since the foreign company Accountability Act of the United States came into force at the end of 2020, zhonggai company has faced multiple pressures.
Since the beginning of March this year, the US Securities and Exchange Commission (SEC) has published the list of seven batches of "pre delisted" Chinese stocks.
So far, 139 zhonggai shares have been included in the list. A total of 23 companies in the first four batches have passed the plea period and are included in the "list of confirmed delisting", and the fifth batch is about to enter the "list of confirmed delisting".
The list includes station B, Zhongtong, jd.com, pinduoduo, Tencent music, Ctrip, etc. it is written on the official website of the SEC that since the final appeal time has been exceeded ("companies in the" pre delisting "list can send e-mail appeals to the SEC and provide supporting evidence within 15 working days, otherwise they will enter the" confirmed list "), including Baidu, Weibo, iqiyi, futu A number of Chinese stock companies, including Sohu, have entered the "confirmed delisting list".
Whether the listed companies will really withdraw from the market in the next two years ultimately depends on the progress and results of China US audit supervision cooperation. Since the beginning of this year, China has held several rounds of talks with the American public company accounting oversight committee.
Fang Xinghai, vice chairman of China Securities Regulatory Commission, previously said at the Boao Forum that China will continue to expand high-level opening to the outside world. It is believed that the uncertainty of zhonggai shares will be eliminated and a cooperation agreement will be reached soon.
Yi Huiman, chairman of China Securities Regulatory Commission, said that the pace of high-level opening of the capital market will not change. The CSRC will accelerate the implementation of new regulations on the supervision of overseas issuance and listing of enterprises, maintain smooth channels for overseas listing, and support Chinese enterprises to make better use of two markets and two resources in accordance with the law. In accordance with the principle of "respecting international practices and abiding by Chinese laws and regulations", promote the achievements of China US audit supervision cooperation, and build a predictable international regulatory environment for the high-level opening of the capital market.
In April, the CSRC solicited public opinions on the provisions on strengthening the confidentiality and archives management related to overseas securities issuance and listing of domestic enterprises (Draft for comments), which provided institutional guarantee for cross-border regulatory cooperation.
Yang Ao, chief Chinese analyst of fxtm Futuo, said in an interview with the reporter of the international finance news that from the actual operation of zhonggai shares and the preparation to avoid delisting risks, the trend of secondary listing of zhonggai shares in Hong Kong is still continuing, reflecting the vigilance and preparation of zhonggai shares for delisting risks.
At the same time, more and more investors have also converted their China concept shares ADR into Hong Kong shares, reflecting that market investors are also fully aware of the delisting possibility of China concept shares.
"When investors, institutional investors and market participants are also prepared for the delisting of zhonggai shares in the future or one after another, and the adjustment of zhonggai shares earlier also reflects the market risk of delisting. I believe that when delisting really occurs in the future, zhonggai shares may have market fluctuations of 'buying facts', which is one of the opportunities that investors can pay attention to."
Dale Nicholls, fund manager of Fidelity International, believes that Hong Kong provides potential liquidity advantages for listed companies to join the Shanghai Hong Kong stock connect. The Shanghai Hong Kong stock connect allows enterprises to take advantage of China's huge investor base. In fact, the liquidity boost from China's southbound transactions will help offset any reduction in capital flows from the United States. Over time, as more Chinese technology companies list in Hong Kong and form a scale, Hong Kong's liquidity may improve.
can you copy the bottom
Yang aozheng believes that the current valuation of zhonggai shares is actually far lower than the average value of the past five years and the average value of the market peer sector, which can be said to be a good time to enter the market in terms of valuation. In fact, in the first quarter of this year, when the interest rate hike led to the tightening of liquidity and the adverse market atmosphere for risky assets and the stock market, many well-known funds began to increase their positions in zhonggai shares, which reflected that the market participants' valuation of the current zhonggai share price was appropriate, and their vision and confidence in future growth began to increase. It is expected that the market will have a new wave of favor for zhonggai shares.
"In addition, it is expected that China will continue to increase the development of retail and domestic demand to support economic growth in the second half of the year. Zhonggai e-commerce stocks also began to enter the shopping and sales festival in the second half of the year, such as" 618 "and" double 11 ". It is believed that there are continuous positive factors for the performance growth of zhonggai stocks and will attract more funds to deploy zhonggai stocks." Yang aozheng said.
JPMorgan Chase believes that leading industries such as digital entertainment, local services and e-commerce will become the first batch of sectors to outperform the market, and later vertical industries such as tourism and advertising should lag behind the leading industries by one or two quarters.
