Interview with Everbright Prudential Zhan Jia: In the second half of the year, we are optimistic about small foods, offline medical treatment, and intelligent terminals

The Paper's reporter Ge Jia

"My outlook for the second half of the year is cautiously optimistic." Recently, in an exclusive interview with the surging news reporter, Zhan Jia, director of the overseas investment department of Everbright Prudential Fund and proposed fund manager of Everbright Quality Life, said so.

In terms of specific investment opportunities, Zhan Jia believes that the long-term steady growth trend of core enterprises in major sectors such as consumption, medicine, and science and technology has not changed, and the consumer service industry based on domestic demand, as well as the manufacturing and service industries that have gained advantages in export competition, are expected to continue to have a good growth momentum.

From the perspective of more subdivided fields, Zhan Jia is optimistic about small foods, offline medical services, and intelligent terminals.

There are three major risks in the second half of the year

The main reason why Zhan Jia is optimistic about the market in the second half of the year is liquidity.

"The Fed is still in a rapid expansion cycle, supported by strong liquidity, and the financial bubble is difficult to burst." There is no fear of a rapid tightening in global liquidity this year. Zhan Jia said that the overall good liquidity is the basis for optimism.

At the same time, on the basis of optimism, Zhan Jia believes that there are also three major risks in the second half of the year, one is that the US job market data may strengthen, which will cause the exchange rate of the DOLLAR/RMB to rise, which will trigger the expectation of liquidity contraction; second, inflation will continue longer than expected; third, risk-free interest rates will rise too fast.

For the selection of investment targets, Zhan Jia said that in the second half of the year, the target will be selected in accordance with the standard of "three highs and one low".

Zhan Jia's eyes are the "three highs", that is, high space, high barriers and high capital efficiency.

In Zhan Jia's view, the stock selection should first select industries with long-term stability, sustainable development and moats, and the growth space of these industries is large enough, and it has a relatively high competition threshold and will not be easily replaced. Second, capital efficiency refers to the ratio of an enterprise's income to actual investment, which is the main basis for judging high-quality companies, corresponding to financial indicators such as return on invested capital (ROCE) and return on net assets (ROE).

"Enterprises with leading advantages, stable growth and high ROCE usually have the ability to continue to be profitable and cross cycles." Zhan Jia said bluntly that in addition to the "three highs", he also attaches great importance to the low volatility attributes of stocks. In high-quality development enterprises, using historical volatility to screen and select stocks with lower volatility is the secret of his ability to continue to beat the market.

Combo strategy "small wheel movement"

After passing the "three highs and one low" standard screening, Zhan Jia believes that the long-term steady growth trend of core enterprises in major sectors such as consumption, medicine, and science and technology has not changed, and the consumer service industry based on domestic demand, as well as the manufacturing and service industries that have gained advantages in export competition, are expected to continue the good growth momentum.

In fact, among the top ten heavy stocks of equity funds managed by Zhan Jia, the consumer and pharmaceutical sectors have always been its favorite varieties, but Zhan Jia frankly said that he will do "small rotation" between subdivision industries, that is, rotation between companies and companies, or subdivision industries.

In his view, between companies or industries, the degree of prosperity and stock price bubbles will change every quarter, so he will make a certain switch between companies and sub-industries, "The product has a certain rotation is my management characteristic." ”

"For example, in the first quarter of last year, when home consumption was better, I increased the proportion of allocation; in the third quarter of last year, when offline diagnosis and treatment recovered, I increased the proportion of medical services and new drug research and development." Zhan Jia said that in the "small wheel" operation, it will be switched in combination with changes in industry prosperity, and the names of the top ten positions will often be repeated, but certain adjustments will be made in terms of weight.

In the consumption sector, Zhan Jia took small food as an example and revealed the secret of doing "small wheel movement".

"There are some small foods, such as soy sauce, vinegar, melon seeds, because of the relationship between the epidemic last year, everyone has a large number of melon seeds, condiments, quick-frozen foods, etc. at home, resulting in a particularly high base in the second quarter of last year, so this year's mid-year report looks like the year-on-year growth rate is not good, everyone feels that its core assets have fallen to the altar." According to Zhan Jia's observation, the operation of such companies is actually not abnormal, and the price of such products will increase once every two or three years, and once the price of the company's products rises in the second half of the year, it can successfully pass on the inflation effect brought about by the rise in upstream costs, and even benefit from inflation.

In addition, in the pharmaceutical sector, Zhan Jia is optimistic about medical treatment, especially in the field of offline medical services. In his view, with people's emphasis on health and the trend of aging, medical expenses will increase at a relatively fast rate.

"There will be an explosion in the field of smart terminals." This is the third segment that Zhan Jia is optimistic about, he believes that with the development of the Internet of Things in the future, the updated iteration of intelligent terminals will further develop the field, which will also produce great room for growth in corporate profits.

There are two types of medical beauty companies that can eat dividends the most

In the interview, Zhan Jia also talked about her views on the medical beauty and liquor industries that are currently favored by institutions.

In his view, there are two types of medical beauty companies that can eat the most dividends, one is a company with a medical device approval, but also depends on whether the approval is scarce; the other is a medical beauty terminal institution.

For liquor, Zhan Jia also has his own unique methodology. In addition to the daily tracking of the enterprise, he will also personally buy liquor products at various price points on the market, and make personal experiences and summaries of the quality of the wine and the recovery after the wine.

Zhan Jia said frankly that the current growth logic of high-end liquor and liquor with greater influence in some regions is relatively smooth. "The risk of market speculation on some low-end or small-value liquor companies is relatively large, because the operating fluctuations of small varieties are relatively large, and the stock price will eventually reflect the real price level and sales level of liquor companies."

Unlike many fund managers who simply choose stocks from the bottom up, Zhan Jia also attaches great importance to the ability to go from top to bottom, he said, "The concept of large-scale asset allocation is equivalent to thinking about eating watermelon in the summer and eating winter shoots in the winter. ”

For this year's large-scale asset allocation, Zhan Jia believes that in the macro environment of economic recovery and inflation start-up, the overall performance of emerging market equity will be good, and when looking for equity suitable for allocation, it is necessary to find some companies that can transmit the upward pressure on costs, so as to resist inflation.

So this year, Zhan Jia attaches great importance to C companies, because these companies have a relatively good cost pass-through ability. "Some midstream to b companies may not have such bargaining power, and in the face of an inflationary environment, the pressure on b companies may be greater this year."

According to her resume, Zhan Jia was a director of CCB International Asset Management Co., Ltd., responsible for portfolio investment, Hong Kong stock self-operated investment, and presided over equity and large-scale asset allocation investment research. As the director of the overseas investment department of Everbright Prudential Fund, Zhan Jia's personal experience is in line with the global vision of Hong Kong stock investment, and its new fund being issued, Everbright Prudential Quality Life, has also set a maximum of 50% of the equity assets of the Hong Kong stock standard.

Zhan Jia believes that after the retracement of Hong Kong stocks, it has returned to the low valuation level at the beginning of the year, which is suitable for long-term capital allocation. In terms of sectors, mass consumer goods, medical services, property management, etc. have long-term allocation value.

Editor-in-Charge: Wang Jie

Proofreader: Liu Wei