On January 23, 10 billion private equity Zhengxin Valley capital and its founder Lin Lijun responded positively to the reasons for the sharp decline of Zhengxin Valley’s performance in 2021, and disassembled the 2021 investment strategy to investors.
Some time ago, allegations such as “more than 30 billion products caused 10 billion yuan loss to investors”, “product loss of more than 30%”, “false publicity” and “lack of risk control” made zhengxingu company and its actual controller Lin Lijun controversial for a time. On the afternoon of January 23, zhengxingu capital held the 2022 investment exchange meeting and the fourth investment strategy report meeting. Lin Lijun responded positively to the above allegations at the meeting.
Lin Lijun said that he would learn from the short-term difficulties, be able to accumulate small victories into big victories, and do a good job in the long term. Facing the future, we will continue to strengthen the investment concept, give full play to the advantages of investment and research, do a good job in long-term and in-depth industrial research, calm down and do a good job in every research and investment decision.
The founder of Zhengxin Valley is Lin Lijun. He was born in 1973. He has an MBA from Harvard Business School and a master’s degree from the Department of world economics of Fudan University. He once served as the assistant director of the office of Shanghai Stock Exchange and the assistant director of the listing department, worked in the gem preparatory working group and the Listing Supervision Department of the CSRC, and also served as the vice president of the securities investment fund industry association. Huitianfu was founded at the age of 31 and became the top 10 public fund. After leaving huitianfu in April 2015, Zhengxin valley was established within two months, and then Zhengxin Valley entered the ranks of 10 billion private placement.
why did the performance decline
for the sharp decline in performance in 2021, Lin Lijun made specific dismantling, “At the beginning of last year, we thought that the core assets, consumption, medicine and some core asset stocks at that time were overvalued. We adopted a strategy of looking for craters and bought some value defensive assets. We hope to avoid the decline of core assets and then transfer to companies that are optimistic about long-term competitive advantages. However, the market last year was very extreme and out of date Now there is a great industry rotation. ”
After may last year, when Zhengxin valley was rearranged, some new energy assets had risen sharply. Therefore, the layout was based on the large chemical industry platform with low valuation and benefited from the scarcity of capacity supply and the upstream of new energy. However, external policies such as dual control of energy consumption appeared at the end of September, which affected the performance.
Previously, according to the content of an investor’s accusation letter, after the net value of some products of Zhengxin Valley retreated 15% in the first quarter of last year, the net value in the second quarter always hovered around 0.8; In the third quarter, the position was adjusted again to buy cyclical chemical stocks such as Yunnan Aluminium Co.Ltd(000807) , Henan Shenhuo Coal&Power Co.Ltd(000933) and the position sectors were highly concentrated, resulting in a sharp drop of 15% in the two weeks of September. In the fourth quarter, when the new energy sector entered the adjustment as a whole, it bought the stocks of new energy upstream enterprises that had risen too high in the early stage.
In the face of investors’ inquiries, Lin Lijun said, “I was really dissatisfied with my performance last year. I sincerely apologize to our investors. I have been engaged in asset management for nearly 20 years. Last year was a year with great investment pressure in the past years. However, investment always rose and fell like this, and sometimes there will be great pressure. Like Buffett, it also fell by 56% from 1973 to 1975. It also fell by 38% in 1990 %, there was also great pressure in the five years from 1996 to 2000. In fact, it is quite normal for market fluctuations and style adjustments to lead to fluctuations in investment performance. But on the whole, I am still very dissatisfied. Last year’s performance decline is a short-term thing, not a long-term phenomenon. “
why buy new energy
For promising new energy, Lin Lijun believes that at different stages of the market, investors should optimize and adjust their investment strategies according to market changes and industry changes, not style drift.
At this strategy meeting, the analysts of Zhengxin Valley focused on the investment opportunities of “industrial revolution brought by energy revolution” from different aspects. For example, Li Chengbin, partner of Zhengxin Valley, said he believed that China’s scientific and technological manufacturing has reached a new stage of comprehensive improvement of competitiveness, and industries such as electric power, new energy, energy storage, automobile and electronic components are facing investment opportunities with a long slope and thick snow. Although some companies have been fully exploited by the market in the past few years, technological progress Internationalization and organizational evolution will continue to promote the improvement of the internal value of enterprises and the emergence of new enterprises. While China’s advantageous industrial chain obtains greater market share in global competition, it is also a golden investment opportunity for the rise of a number of excellent enterprises.
According to Lin Lijun, “In the field of energy revolution, we have actually done research for a long time and matched a strong team. At the same time, I have also spent a lot of time studying the energy revolution. For example, traditional industries such as electronic components are undergoing earth shaking changes, their demand is growing rapidly, the industry structure is facing reconstruction, and domestic substitution is accelerating. I am very confident , according to this playing method, continuous in-depth research, internal discussion and tracking of industrial changes can be done well in the long run. ”
Lin Li Jun said that from 2016 to 2020, the bull market, which is essentially a core asset, is very persistent. The Baijiu, the CXO in medicine and the platform enterprises in the Internet will be very good. At present, the opportunity of energy revolution may not be as clear as consumption and medicine from 2016 to 2020, because it will be more volatile. In addition, technological change is still evolving, and different enterprises may have great changes because of technological change. Therefore, it is necessary to conduct in-depth and continuous research, constantly track industrial changes and make investment from the perspective of industrial investors. In this industry, enterprises with strong entrepreneurship and innovation ability still have considerable growth space, which is no less than the past medicine and consumption fields. However, it is necessary to carefully select the best among the best and keep tracking on the premise of risk control.
have confidence in the current portfolio
Next, Lin Lijun said, first of all, it is necessary to control risks, the companies currently combined are companies that have been deeply studied by us, and each company has been deeply discussed in the investment decision-making meeting. These companies will grow well in the next few years, and their valuation is not high. Moreover, these companies are in a relatively excellent state in terms of entrepreneurship, business model and industry structure, “I am very confident in our combination”.
second, in the combination construction, we pay more attention to balance and adapt to market changes. for any judgment, there are clear risk control indicators to further reduce the volatility. Third, from a long-term perspective, we attach importance to building a first-class team and culture. The current research team of Zhengxin Valley is excellent in both public offering and private placement industries, but we are not satisfied and are still further attracting excellent talents to join.
The achievement of long-term performance and the repair and return of short-term net worth still depend on daily in-depth research, in-depth research of industries and enterprises, and small victories turn into big victories.
Only a truly excellent team, excellent management system and excellent culture, matched with long-term efforts and constantly practicing our ideas, can it bring long-term benefits to investors.
is there a rat house? How to prevent large pullback?
For the compliance issues questioned by some investors, Lin Lijun said that compliance is our bottom line and our lifeline. Zhengxin Valley has established a set of rigorous compliance risk control system. I have worked in public funds for many years, and I am well aware of the extreme importance of compliance. The compliance of Zhengxin Valley is very standardized and rigorous. Moreover, Zhengxin Valley is a team composed of a group of people who really love investment. We regard investment as our career, which is more important than life.
According to Lin Lijun, Zhengxin Valley has established a whole process risk control system before, during and after the event. According to the standards of public funds, the centralized trading system and compliance risk control system have been established, and special IT systems and computer rooms have been established. The core of ex ante risk control lies in our stock pool system. We have established a series of ex ante screening systems such as tracking pool, recommendation pool, core pool and heavy position pool. We will review the orders of all stocks to see whether the stock complies with laws and regulations, stock pool system and our compliance risk control indicators. The core of risk control in the matter lies in our portfolio control and trading system. We will track and quantitatively analyze the risk exposure of the portfolio, for example, dynamically judge the beta value of the portfolio, what changes will happen to the portfolio if the external impact increases, and how we deal with it.
as for how to prevent a big retreat in the future, Lin Lijun said that in fact, the first point is to ensure that the targets entering our portfolio are really excellent companies, and the company’s competitive advantage, management team, business model and long-term financial return are excellent. Second, in the construction of portfolio, it emphasizes the investment method of “relatively balanced industry, moderate concentration of individual stocks and real-time dynamic adjustment”. This investment method can make the portfolio strive to obtain better long-term returns in the long term and under the condition of controlling risk exposure.
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