In the morning, we continued to buy high-quality hydropower faucets and nuclear power faucets, and the current power position rose to 11.85%, which is the third largest position.
The top two heavy positions are still banks and coal, with positions of 32.1% and 29.8% respectively.
One
My overall view on the power sector is:
The reasonable valuation is 20 times, and many listed power companies are valued at 10-15 times after the high growth of annual reports and quarterly reports, with a certain margin of safety.
Electric power companies have a certain degree of growth, even if it is the hydropower faucet with the lowest growth potential, there is still a certain room for growth through pumping and storage, wind and solar energy, and investment in shareholding companies.
Wind and solar energy is the main source of growth for power companies, and the mainland requires that the proportion of non-fossil energy consumption reach more than 80% by 2060, compared with less than 20% at present.
Combined with the stability of ROE, I am more optimistic about the integration of hydropower, nuclear power and coal power, which is generally above 12%.
The so-called integration of coal and electricity, that is, all the coal burned for power generation is self-supplied, rather than purchased, the advantage is that even if the price of coal fluctuates, the cost is relatively controllable, and the long-term profitability is more stable.
For some listed thermal power companies, if the proportion of purchased coal is higher, then when the price of coal falls, the performance elasticity will be greater.
But for long-term investors, resilience is great, but the most important thing is sustainable profitability.
Two
At present, many power companies are valued at 10-15 times, with a certain margin of safety.
So, specific to a single listed company, what is the performance certainty and growth of each power company?
I don't have an answer to this question yet, so it's still an investment strategy of industry concentration and individual stock diversification, with a stock ratio of no more than 2%.
And I put certainty first, so the integrated leaders of hydropower, nuclear power and coal power account for a higher proportion of my holdings.
In addition to this, I also have thermal power positions, and their main characteristic is that they lost very much money when the coal price was high in 21.
However, when coal prices fell in 22, 23 and the first quarter of this year, the performance growth rate was higher and more elastic.
At present, the main position of the public offering is also the thermal power leader with high performance flexibility.
The three fund managers I admire, Yang Jinjin, Bao Wuke and Feng Hanjie, also have heavy positions in power companies.
Yang Jinjin's management of Bank of Communications Trend and Bank of Communications Qicheng has a heavy position in Wanneng Power, Huadian International A+H, Huaneng International A+H, and Datang Power Generation A+H, all of which are thermal power faucets with high performance flexibility.
Bao has no management of the value margin of Invesco Great Wall, and the heavy positions of Huaneng Hydropower and Sichuan Investment Energy are both hydropower faucets.
Feng Hanjie manages GF Theme Leadership and GF Balanced Growth, with heavy positions in SDIC Power, Inner Mongolia Huadian, Funeng and Sichuan Investment Energy, including hydropower, coal power and wind power.
Three
Feng Hanjie has mentioned it before, but not much, and is also a fund manager with excellent performance and excellent drawdown control.
Before coming to GF, his masterpiece was China-Canada Transformation Power A, which he managed from December 2018 until his departure in March 23.
In more than 4 years of management, the cumulative return is 144%, equivalent to an annualized rate of 23%, ranking in the top 11% in the same period.
In the four full years of 19-22, the returns were 33%, 60%, 19%, and -6%, respectively, and the maximum drawdown during the tenure was -13.35%.
Combined with this drawdown, the risk-reward ratio is quite impressive (data source: .
At the same time, he is also a big believer in high dividends.
In his 23-year annual report, he mentioned:
The Fund will not discard all of the individual stocks in the dividend style because of the large overall increase in the dividend style.
Think about it, if the risk-free rate rises to 4% or even 7%, how many stocks in the market will be able to withstand it?
This, in turn, suggests that many dividend stocks may still be attractive in terms of price, and their larger gains in 2023 are likely due to their extreme undervaluation in the past.
Four
Of course, in addition to the low valuation, high dividends and certain growth of the power company itself, many bigwigs with tens of millions of funds have also repositioned in electricity, and their cognition of electricity surpasses that of most buyers and buyers, giving me great confidence support.
Their speeches were a great consolation to me, a novice in electric power.
But even so, I was very cautious in my position.
Because their cognition does not represent my cognition.
As a novice who has held electricity for less than half a year, there is still a lot of room for improvement.
At all times, it is important to match your perception and risk tolerance.
As the old saying goes, if you don't have diamonds, don't do porcelain work.
So, will you miss it?
There are many opportunities in the market that I have missed, such as gold, pig farming, ships, and countless hot spots, such as synthetic biology, glass substrates, etc.
I'm more afraid of doing something wrong than I missed.
From the perspective of compound interest, 1.1 * 1.1 is greater than 1.5 * 0.8, and the investment is not more than who buys, but always compares who makes fewer mistakes.
What's more, investment is the same as work, and the long-term returns are also very amazing if you work in your own circle of competence.
Banking, coal, liquor, home appliances and electricity, these five industries with high ROE and high dividends, have emerged one after another, and in the past 10 years, at least one industry has been at the forefront of A-shares every year, which is enough for me to eat.
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Disclaimer: The content of this article is based on public information research and does not constitute investment advice. Investors should make prudent decisions and bear risks independently.
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