In 2023, the A-share market will open high and move low, and it will fluctuate throughout the year. In the first half of the year, AI investment was in full swing, and in the second half of the year, Huawei, diet pills, and humanoid robots took turns to perform, and structural opportunities and risks coexisted in the market.
Sohu Finance's "Fund Q&A" column has launched a special series of reports on "Jiyu 2024", reviewing the market in the A-share market segments during the year, looking forward to and predicting the investment opportunities in various popular tracks in 2024, grasping the main logic of asset allocation in the future, and looking for fund products with investment potential.
The fund manager who is a guest in this issue of "Foundation Encounter 2024" is Chen Ying, fund manager of Golden Eagle Fund, who focuses on investment opportunities in the field of science and technology in this issue.
Chen Ying holds a bachelor's degree from Peking University and a master's degree in business administration from Sun Yat-sen University. He joined the RGE Fund in September 2012 and has served as a researcher, research team leader, fund manager assistant and fund manager of the Golden Eagle Fund, and is currently the chief investment officer, general manager of the growth investment department and fund manager of the Golden Eagle Fund.
In 2023, the market will be volatile and downward, and the 4 funds managed by Chen Ying have achieved outstanding performance, among which 3 funds, Golden Eagle Technology Innovation Stocks, Golden Eagle Core Resources Mix, and Golden Eagle Dividend Value Mix, all rank among the top 10 active equity funds in the market.
In this regard, Chen Ying analyzed that the excess return mainly comes from the combing of the metaverse including AI, blockchain, VR, etc. in the early stage, as well as the timely switching of media, computer and other sectors.
Looking ahead, Chen Ying believes that the structural market in 2023 may continue in the next year or two, with the difference being whether the index is volatile and bottoming out or slowly rising. He believes that there may be a lack of opportunities for large index markets, and more likely to be structural opportunities brought about by some industrial changes.
In terms of specific industries, he said that he will continue to pay attention to the AI sector, especially the application fields of the combination of AI and consumer electronics. He believes that compared with computing power models and other links, application scenarios are more able to give full play to the strengths of domestic related companies. Artificial intelligence is not a market for one or two years, but probably at least a market with a cycle of five to more than ten years.
The following is the full text of the interview:
Q: In 2023, the market situation will be more extreme, please talk about your feelings about the entire market this year, and have you seen any obvious changes in your investment ideas and mentality?
Chen Ying: On the whole, the index will fluctuate in 2023, and the structural opportunities are very prominent, and there have been such markets in history. We feel that this market is likely to continue in the next year or two. The distinction is nothing more than in the index, whether it is a shock to find the bottom or a slow upward trend, the large index market opportunities may be relatively lacking, and more are the structural opportunities brought by some industrial changes.
There has been no particularly big change in the overall mentality. We believe that this is a structural market in the process of index bottoming out or in the process of moderate upward trend of the index in the future, and the first thing to do at this time is to do a good job of expectation management in all aspects of your mentality, and do not think that there is a magnificent bull market. Second, in the case of good expectation management, we will look at the interpretation of the market, and then grasp the level of market for each change from the perspective of the industry, and do a good job in these studies. From our point of view, the first is to dilute the ranking, downplay the drawdown, and return to the origin of investment, and the final result will be relatively better. When everyone's mood is high, we can be a little more restrained, and when everyone is pessimistic to the bottom, we can be a little more optimistic, so that we will be a little calmer. As a whole, the mentality should be flattened and the expectations should be lowered, so that the mentality will be better when making investments.
Q: The fund you manage has achieved good results in 2023, what are the main sources of excess returns?
Chen Ying: First, at the end of 2021, we sorted out the entire metaverse sector, focusing on artificial intelligence, virtual humans, AI, including blockchain, VR and other relevant domestic listed companies. Second, in the third and fourth quarters of 2022, we observed that the domestic media may have bottomed out in all aspects of the policy, so we made a wave of switching at that time and added a lot of media and computers. The main thing is that these two waves are doing it right.
In addition, we have some position adjustments in March, April and May 2023, including July and August. Until September, we added a lot of electronics and media.
Q: When screening individual stocks, how do you rank indicators such as market space, industry trends, valuation, profitability, market sentiment, and entrepreneurship?
Chen Ying: Different stages of the company and different types of companies may be different, I think it needs to be analyzed on a case-by-case basis, different stocks, the level of change and level or good is also different, at this time my observation points are also different. For example, for companies with current AI applications, they may dilute their valuations more and look more at the company's management, including their industry space. For such companies with the reversal of the electronic cycle, they may look more at their future earnings forecasts, production capacity, downstream customers, etc., and we look at different things differently for different companies.
Fund Q: In 2023, AI, including short dramas, Huawei's industrial chain, etc., these hot spots have boosted the TMT sector one after another, and the industry is actually relatively differentiated, how do you grasp this TMT sector as a whole?
Chen Ying: In the absence of big opportunities, there are structural opportunities for positive changes and new directions in the industry. In fact, TMT can be diluted a little bit, and more to see if there are some new changes and developments in the business that the company is engaged in. For example, the leading companies in the traditional sense of TMT. In fact, there are not many changes in the industry elsewhere at present, or there are not too strong changes, and it must have some changes, some small and subtle changes and developments. But if he does not have a particularly revolutionary driving factor, it will not have a particularly big impact on the stock price, and more we can also see, for example, AI, MR, or folding screens and titanium alloys that we see in mobile phones, including the return of Huawei's industrial chain, these are all major changes in an industry, some are revolutionary, some are trending, and some are phased such major changes.
The first thing we need to do is to grasp some major changes, and the second is to look at the nature of the changes, whether they are revolutionary changes, periodic changes, or phased changes. Different changes themselves represent different market levels, which is what we need to pay attention to.
Q: What are the reasons for the recent sharp adjustment in the A-share market? What do you think are the main factors affecting the market at present?
Chen Ying: I think the situation is gradually getting better. The short-term decline may be due to various factors such as the capital side, but more likely to be in the process of bottoming out. From the perspective of macro fundamentals, the yield of 10-year U.S. Treasury bonds is falling, the RMB is rebounding, the exchange rate is rebounding, and the domestic real estate policy is correcting and relaxing. Policies on infrastructure and other aspects are also being introduced, and positive factors are accumulating.
Therefore, we believe that the short-term is a bottom-out process, and it is more characterized by a bear market, which is not a reaction to the positives. However, our recent observation shows that many stocks are actually slowly and really unable to fall, and there is still a strong urge to rebound at the previous low. We are relatively focused on the market in the first quarter of 2024.
In 2024, the monetary pressure may also be much smaller, and the index may be structurally upward, steady and slow upward rather than volatile upward, and may not follow a trending market. In this case, we think that 2024 may still be a relatively structural market.
Q: AI is still a promising direction for the market in 2024, what do you think, and what is the difference from last year?
Chen Ying: My personal opinion is that the strongest AI in the United States may be in computing power and models, while China's strongest in data and applications. So last year, I actually participated in some of the computing power and optical modules, but I didn't participate too much. We don't think this is China's strong point. However, our strongest point is that the application scenarios are particularly perfect, there are many kinds of data and application scenarios to suit AI, improve production efficiency, and more important links than computing power models, which are also where we can give full play to the strengths of these domestic companies. We feel that artificial intelligence is not a one-year or two-year market, but may be at least a five-year to ten-year cycle.
Jin Jia asked: What do you think about the semiconductor track?Robots are also a very topical subdivision track in the growth field this year, will you have some ideas and layouts in 2024?
Chen Ying: As far as these two are concerned, I pay more attention to semiconductors, and I think the epidemic is a good pull for the localization of semiconductors. When there is a problem in the supply chain, many mature midstream and downstream companies may give domestic semiconductor companies a chance to try, which provides domestic semiconductor companies with an opportunity to enter the supply chain system. Once it enters this system and its products are verified, this process may be irreversibly reflected in the industrial chain. Therefore, I think there may still be opportunities for the domestic semiconductor industry chain as a whole. However, the valuations of our semiconductor companies are relatively high, and I think it will be relatively difficult to select stocks.
As for the humanoid robot, frankly speaking, I didn't get too involved in this section, my feeling is that I haven't seen his application scenarios, and it is more event-driven, and I think this event-driven is relatively far away, more of the industry's own judgment and information provided. We think that the development of this industry may be difficult, or it may be difficult to become a mainstream track in the short term. For example, if you are in a factory, you don't need to make humanoid robots, and if you use humanoid robots to do related services in a coffee shop, you don't need to use expensive robots.
Q: Which new technology or technologies do you think we need to pay more attention to in 2024 to be one step ahead?
Chen Ying: I think this year, more likely to pay attention to AI terminals, and even some AI functions, embedded in some such as speakers, sweeping robots, refrigerators, TVs, etc., simply speaking, it has simple calls and conversations of language commands. Because after the computing power network model in 2023 is paved, if the application is to be carried out in 2024, the inference side may make some products at the edge or on the terminal.
Produced by | Sohu Finance
Author | Wang Mengting
Operations Editor | Xue Suwen
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