Zebra stocks are on fire, have you caught up?

#Zebra stocks are on fire#Performance is a litmus test for a company at all times, and the same is true for zebra stocks! One is that the performance is very good, all from the main profit, but the growth rate is slowing down! This kind of low valuation is a good place for funds to hedge. The other is poor performance, but the growth potential is great! Zhang Kun of Sino Analytica Fund, with a brilliant return on investment in the past 2 years, proved that it is only a matter of time before the zebra stock is on fire, and the focus is to endure loneliness.

In a market accustomed to paying attention to star fund managers, Zhang Kun is an imperceptible "treasure". In his opinion, the bright return on investment and the resulting comfortable base experience are the natural result of his years of continuous mining of "zebra stocks".

Zhang Kun said that "zebra stocks" mostly have the potential of "three highs" (that is, high growth space, high performance growth rate, and high expectation difference), but they are not well known by the market, and they need to endure loneliness in investment and achieve "two noes" (no huddling, no chasing up). In the environment of relatively loose domestic capital, short-term volatility is expected to provide a rare window for mining "zebra stocks" with "Davis double-click". "The market does not lack 'zebra stocks' but lacks Bó Lè, I am willing to be a lonely Bó Lè, through continuous sharing, let more investors recognize the value of 'zebra stocks' and accompany them to thrive."

Stock prices are not enough to rise because "elevators are rising"

In the general impression, fund managers with science and engineering backgrounds like logic and reasoning, and have the spirit of "rigor" and "persistence" like scientists. Over time, this internalized personality has shaped them into the coldest group of "straight men of steel" in the investment circle, and externalized into the stereotype of "not good at words and lacking visual thinking". However, stereotypes are never the facts themselves.

Due to his early strong interest in investment, Zhang Kun transferred to finance at the master's level after graduating from his bachelor's degree, and directly engaged in investment research after graduation. He started as a macro strategist at brokerages and fund houses, joined Sino Analytica in May 2014 as a fund manager assistant, and officially became a fund manager in August 2015. Under the influence of strategic analysts, Zhang Kun initially formed a "top-down" investment idea.

Under this line of thought, Zhang Kun has a very vivid description of market fluctuations. He said that the ups and downs of the market are like "taking an elevator": "In a bull market, the stock price rises high, some people say it goes up by push-ups, some say it jumps up by running, but in fact it is all because 'the elevator goes up', and in a bear market, the elevator comes down." ”

"But a top-down framework is not enough." In the 7 years of portfolio management from 2015 to the present, Zhang Kun has personally experienced the unilateral decline of A-shares in the second half of 2015 and the financial deleveraging bear market in 2018. Looking back on his investment experience during this period, he concluded with reporters: "Just making money in a bull market does not prove the effectiveness of the investment framework. Therefore, after managing the funds, he began to further hone in the direction of fundamental research, and finally formed a combination of 'top-down and bottom-up' investment frameworks. ”

Zhang Kun believes that top-down is to use the macro strategy framework to guide the allocation of portfolio assets and industries, solving the "trend" problem, while fundamental analysis solving the "value" problem, the combination of the two, looking for value depression in the general trend, is the problem to be solved by investment.

Sino Analytica Preferred Return has Zhang Kun's remarkable personal stock selection characteristics. The third quarterly report shows that the top ten holdings of the fund are relatively diversified, often one or two companies are one industry, and the overall characteristics are small and mid-cap. "In adversity, heroes are revealed." Zhang Kun said that in the current global changes, companies that can turn crises into opportunities and continue to grow are even more valuable. "They are the choice of investors and the hope of successful economic transformation, and I will continue to identify these kinds of companies and accompany them in their growth."

In Zhangkun's investment system, such companies are called "zebra stocks."

The principle of "three highs and two noes" excavates "zebra stocks"

Similar to the metaphor of "taking the elevator", "zebra stocks" are also the visual output of Zhang Kun's investment thinking over the years.

Combining his observations, he said that stocks in the market are generally divided into blue chips and growth stocks. In many cases, stocks with long-term performance, high returns and high investment value are called "white horse stocks", and stocks with explosive performance, large growth space, and large stock prices that have risen sharply in the short term are called "dark horse stocks". In the early days, some stocks did not fully reflect the steady growth performance, nor did they have the short-term explosiveness of the blockbuster, but they vaguely revealed these two possibilities, so they were called "zebra stocks".

"There will be a significant expectation gap between 'zebra stocks' and market perception, which has not been well known to most people in the market for a long time. In the short term, it may have some shortcomings, but in the long run, it tends to have the fundamentals of 'white horse stocks' and the explosiveness of 'dark horse stocks'. From the perspective of characteristics, the market value of 'zebra stocks' is generally not too large, mostly in small and mid-cap stocks, but has the potential of 'three highs' (that is, high growth space, high performance growth rate, and high expectation difference). ”

Zhang Kun further said that because it is not well known by the market, the mining of "zebra stocks" needs to endure loneliness, and it is necessary to achieve "two noes" (no huddles, no chasing up) in the investment process. "In fact, if you want to capture sustainable excess returns over the long term, fund managers should step in on certain stocks early before most people are paying attention, and end up reaping most of the gains from the upward trajectory." Zhang Kun explained.

Combined with the specific operation of Sino Analytica's preferred return, Zhang Kun bluntly said that because it is difficult for small and mid-cap stocks to achieve close tracking of industry data, in order to prevent the resulting information lag, on the one hand, he will reduce portfolio volatility by diversifying positions, and on the other hand, he will adjust portfolio positions in time according to the macroeconomy. He said that at the beginning of 2022, he took into account that the Fed began to be wary of inflation and the monetary policy turned, so he reduced his portfolio positions. After the Russian-Ukrainian war and the epidemic in Shanghai, he expects the market to rebound in the second quarter of this year but not reverse, and then increase his position. According to data from Tianxiang, as of September 27, Sino Analytica's preferred return has been high in the past 1 year (referring to the cost performance of the fund to bear risks to obtain returns, the most common indicator is the Sharpe ratio), and the Sharpe ratio is 0.87.

Not only that, in order to thoroughly explain the idea of "zebra stock selection", Zhang Kun further uses image metaphors to subdivide his favorite "zebra stocks" into the following three types:

One is "Cinderella". As the name suggests, such companies are of good quality, but they have not yet been discovered by the market. Its industry is relatively segmented, and the market attention is low, such as the fine chemical industry. The company is a leader in the subdivision field, because the market value is relatively small, it is easy to drown in more than 4,000 stocks in the whole market, but in the medium and long term, its industrial growth space is large, there are technical barriers, and it has a relatively good growth and business model.

The second is the "frog prince". This type of company is a company that is about to turn around due to sudden changes in industry cycles or process cycles. Some high-quality growth leading enterprises have encountered stage difficulties when the ceiling is still high for a long time. Although the short-term stock price has been hit, its own texture has not been affected, and it tends to quickly recover lost ground after experiencing the shock.

The third is the "ugly duckling". Such companies generally have a long investment cycle of R&D or fixed assets, and the upfront cost pressure is high, and the performance is temporarily not bright. However, from a longer-term perspective, with the reduction of costs and the steady increase in market demand, it is expected to be seen by more people.

Optimistic about semiconductor and high-end equipment manufacturing

It is not difficult to find that from Zhang Kun's above-mentioned trading performance and investment ideas, he himself is already a "zebra fund manager". He has built up for himself through long-term hard work and brought real investment experience to the people. Even, in the recent ups and downs of the market, he once again showed the patience and delicacy of a "entrusted person", and explained his "market companionship" in the vernacular that ordinary people can understand.

"In the face of market turbulence, many investor friends will inevitably have ups and downs in their emotions, and I understand very well and hope to spend this time with you through continuous companionship." Zhang Kun said that despite being disturbed by various external factors, the independence of A-shares has become stronger and stronger. Overall, China's macroeconomy has been in a state of repair this year, with loose domestic monetary policy and much lower domestic inflation than overseas, which will enhance the freedom of China's monetary policy to a certain extent. Historically, loose monetary policy has been the biggest stabilizer of capital markets.

Specific to the market structure, Zhang Kun believes that in the relatively loose domestic capital environment, the market will be more inclined to small and mid-cap stocks. Although many companies have seen their profits decline in the context of turbulent global conditions, there are still some companies that grasp the changes in their niche industries in a timely manner, quickly integrate internal and external resources, and seize more market opportunities. This means that short-term volatility is expected to provide a rare window for mining "zebra stocks" with "Davis double-click". "The market does not lack 'zebra stocks' but lacks Bó Lè, I am willing to be a lonely Bó Lè, through continuous sharing, let more investors recognize the value of 'zebra stocks' and accompany them to thrive."

"There are a lot of these companies in the portfolio that I manage. For example, it is urgent to improve the automation and spent fuel processing capacity of nuclear power, and the independent and controllable fields of the semiconductor and information security industry chain, and related companies are less affected by changes in the external environment and have huge room for development. There is AIoT (artificial intelligence Internet of Things) related companies, the development of modern economy and capital market is inseparable from the computer, Internet, mobile Internet and other new technology revolution driven, which will bring huge space to the coverage and value creation of AIoT, especially AR/VR, healthcare, new material applications and other fields, have broad prospects for integration with AIoT. Those enterprises that take the initiative to use data, informatization, and intelligence to improve themselves and solve pain points for customers will also face major development opportunities, and with the alleviation of chip supply bottlenecks, AIoT will return to the high-speed development track. Zhang Kun said.

Zhang Kun said: "In the next investment, it is recommended to try to choose industries with less macroeconomic correlation and independent operating cycles. Specifically, under the trend of domestic import substitution in the semiconductor industry, some companies with strong import substitution capabilities, especially those in the semiconductor material track with relatively high thresholds, still have investment value; At the same time, it is optimistic about the targets related to the high-end equipment manufacturing industry. ”

In the future, under the transformation of the domestic economy, how to deal with the current environmental fluctuations, Zhang Kun believes that "steady and steady fighting can achieve a win-win step by step". After all, under the global epidemic, the uncertainty of various industries has increased, so the import substitution direction of the industry, the future can break through the foreign blockade, to achieve the same quality or cost-effectiveness as foreign products, there will be greater import substitution space.