Interview with Du Meng, investment director of Shanghai Investment Morgan: The stage of valuation of A-shares may have ended

The Paper's reporter Ge Jia

"The stage of valuation of A-shares may be over," Du Meng, deputy general manager and investment director of Shanghai Investment Morgan Fund, said in an exclusive interview with the surging news (www.thepaper.cn) reporter recently, and the market has entered a new stage of matching valuation and performance growth growth since the beginning of this year. Specific to investment opportunities, Du Meng is biased towards emerging industries, from the perspective of large industries, consumption, medicine, technology are all optimistic about him.

Du Meng has 19 years of experience in the securities industry and up to 10 years of growth stock investment experience, not only is the leader of the equity investment team of Shanghai Investment Morgan Fund, but also a heavyweight investment veteran in the industry, and he is also a firm benchmarker for growth stocks and emerging industries.

"New energy vehicles are a good industry, and although the increase this year is amazing, we are still optimistic about this industry." When asked about his views on the new energy and photovoltaic sectors, Du Meng said.

Du Meng in 2018 has proposed to be very optimistic about the new energy vehicle industry, in his view, new energy vehicles are not a theme investment, the industry has given birth to very good companies, "some companies its valuation looks more expensive, but its growth rate is very high, and these companies are very competitive in all aspects, far ahead of competitors." ”

"Investing in Hong Kong stocks is not because we feel that the Hong Kong market is undervalued, but because there are investment targets in the Hong Kong market that are attractive to us." Du Meng also has his own views on the Hong Kong stock market.

In his view, there are many new formats in Hong Kong listed companies that are not in A shares, and investing in Hong Kong stocks is a better supplement to investing in A shares. Investment opportunities in Hong Kong stocks mainly come from industries or companies in the new economy sector.

"The key to investment is to invest in the future, and growth is a key factor in determining how far a company can go." Du Meng is accustomed to viewing the irrational fluctuations of the market as a short-term noise and even an opportunity to increase the position, "What is terrible is not volatility, but the collapse of fundamentals and long-term logic." ”

Looking forward to the future, Du Meng said that the current investment in emerging industries is in a better stage of development. In the next decade, we are still optimistic about the three major tracks of consumption, medicine and technology, but at the same time, we must always grasp the opportunity to stand out in the subdivision industry within the track.

Quality businesses need to prove themselves with growth

In the past two years, the public fund industry has ushered in great development, the performance of equity investment has been gratifying, and the issuance of new funds has ushered in a blowout. Du Meng believes that "before 2018, A shares were basically a transactional market, the market came, everyone traded, the market left, everyone left, but now there has been a significant change." ”

In Du Meng's view, the current A-share market has changed from a transactional market to a allocation market, equity investment has become an important part of residents' household assets, and the proportion of allocation will continue to increase. In the next five to ten years, the equity market may become one of the most attractive large-scale assets in China

Du Meng pointed out that in the past two years, A-shares have undergone repricing of the equity market, and almost all the stock prices of the leading A-share industry have gained good gains in the past two years.

"But by this year, the stage of valuation of A-shares may have ended," Du Meng said, adding that the market has entered a new stage of matching valuation and performance growth at the beginning of this year.

Du Meng believes that if listed companies cannot use growth to prove themselves in the future, and the performance growth rate cannot match the valuation, then the stock price will not have room to continue to rise. In terms of specific tracks, Du Meng is optimistic about consumption, medicine, and technology, "This direction is a long-term direction, and there is certainly nothing wrong with it, but there are also expensive things in this industry." ”

Among them, Du Meng is particularly optimistic about the technology industry, believing that this will be a main track in the future. "In the next three years, although we are also optimistic about consumer medicine, the development of the hard technology sector may be more in line with the needs of social and economic development."

New energy vehicles are among the many science and technology tracks, Du Meng is particularly preferred.

In Du Meng's view, very good companies have emerged in the new energy vehicle industry, although the valuation is high, but the performance growth rate is also very high, and these companies are very competitive in all aspects, and even in developed countries in Europe and the United States can not find competitors. "But there will also be shocks and corrections in the short term. For example, the new energy sector is now up a lot, there is a correction in the second half of the year or a quarter, or some changes in the industry's technical data, which are possible, but do not affect the long-term layout of 3 to 5 years. Du Meng said.

It is worth noting that the recent trend of Hong Kong stock technology stocks can be described as a wave of twists and turns, and there has been a large correction in Internet-based technology stocks, which also makes the market doubt whether Hong Kong stocks will be in a slump.

However, Du Meng believes that Hong Kong stock technology stocks will still have performance opportunities in the second half of the year. "We are quite confident in the future of Hong Kong-listed Internet companies, although short-term policies have put market sentiment under pressure, but in the long run, the Internet industry still has a strong growth elasticity."

Du Meng is accustomed to seeing the irrational fluctuations of the market as a short-term noise and even a good opportunity to increase the warehouse, Du Meng pointed out, "What is terrible is not volatility, but the collapse of fundamentals and long-term logic." ”

Now I prefer to do things in the long term

From a researcher in the power equipment industry, to a fund manager, to the deputy general manager and investment director of Shanghai Investment Morgan, Du Meng admitted that in the past 19 years, for him, the changes are not only years, nor only job titles, the biggest change is the mentality of looking at investment.

"When you are a researcher, you just need to do your own thing well, and recommending your own optimistic industries to fund managers is to contribute to the company." After becoming a fund manager, managing the products by myself, I have to strive to create tangible returns for thousands of investors, so many investors have purchased the funds I manage based on the trust in the company and for me personally, and I have the responsibility to create more value for them. Du Meng said.

In terms of investment style and investment philosophy, Du Meng is also constantly evolving with time. When he first started as a fund manager, he always wanted to be the best and the best, so much so that he occasionally paid more attention to short-term rankings. Now, with the precipitation of time, more emphasis is placed on long-term gains and more pursuit of long-term growth certainty. Making money for clients and growing up with excellent industries and listed companies became his investment beliefs.

Guided by this creed, he became more insistent than ever. "As long as it is a stock that is optimistic about fundamentals and long-term growth logic, I will not give up easily." But because of the fluctuations in the market, I often hear the voice of not understanding, why do I not sell when I fall? Actually, I want to say that I'm looking at long-term, short-term fluctuations are just murmurs for me. ”

The development of each industry and enterprise will go through the stages of rise, peak and recession, and the risks and returns of each stage are different, so the investment strategies that should be adopted are also different. For his investment strategy, Du Meng shared that "my method is two steps: first of all, to judge the industry, and then to choose high-quality companies on the basis of the industry. ”

Du Meng believes that any investment is an investment in this era, an investment in the excellent industries in this era. "That's the biggest investment logic."

Du Meng's representative work, Shanghai Investment Morgan Emerging Power Hybrid Fund, which has been under initial management for more than 10 years, is a product with excellent long-distance performance. According to the data of Shanghai Investment Morgan, as of June 30 this year, since Du Meng managed the Shanghai Investment Morgan Emerging Power Fund (Class A) on July 13, 2011, the return on his tenure was as high as 575.80%, and the annualized return was 21.11%; and the medium and long-term performance ranked in the forefront of the same category for a long time, Galaxy Securities data showed that the returns of the Shanghai Investment Morgan Emerging Power Fund in the past 3 years and 5 years were 152.92% and 197.05%, respectively, ranking 83/384 and 38/ 338; The yield in the past 9 years is 563.20%, ranking 14/262 in the same category.

For his own cheats through bulls and bears, Du Meng admitted that after so many years in the industry, he has adhered to the investment concept and made breakthroughs at the same time. In his view, equity investment is more about investing in excellent industries and listed companies in this era. "The key to investment is to invest in the future, and growth is a key factor in determining how far a company can go." At the same time, Du Meng said that compared with before, the concentration of a single asset in his portfolio has decreased. Now I'm more willing to do something long-term than a short-term investment.

Du Meng said that an excellent company, a significant trait is to always focus on doing one thing, constantly improve their market share, and continue to expand revenue. "Our long-term excess earnings come from great companies. I personally rarely look at marketing strategies, and this stuff may be too short-term. ”

Emerging industries have entered a stage of self-iterative and rapid development

Du Meng also expressed his views on the past and future development of emerging industries.

He said that the seven emerging industries invested by the Shanghai Investment Morgan Emerging Power Fund under his management have performed well in the past decade and have experienced different stages of growth.

Among them, the consumer electronics sector with excellent performance in the electronics industry represents the Apple industrial chain; a large number of high-quality companies have emerged in the field of high-end equipment; the pharmaceutical industry has been growing, from the past generic drugs, APIs to the current innovative drugs and medical services, the entire industry has undergone tremendous changes; the new energy electric vehicle industry has also entered a stage of rapid development.

In Du Meng's view, the development process of many industries is similar, and the research experience of the original industry can be applied to the next one. Studying the changes in the industry over the past decade can lay a solid foundation for predicting the next decade. However, from the past to the future, the industrial structure is also changing, both the general direction of the industry changes, and the industry is also changing. Therefore, when investing, we must not only look at the direction of the big industry, but also pay attention to how the industry is transformed, and sometimes there will be some sub-sectors that develop into top tracks.

Du Meng said that at present, investment in emerging industries is in a better stage of development. At present, emerging industries are gradually entering a stage of self-iteration and self-rapid development. In the past 10 years, emerging industries have fluctuated greatly, and many industries have to rely on policy support and need government subsidies. After years of development, the development of new energy vehicles, military, semiconductors, and high-end equipment industries has reached a considerable height, and the opportunities in the next five years are very large.

"The market has undergone tremendous changes in the past decade, and everyone is increasingly using A shares as an asset for long-term allocation." Du Meng said with emotion. Looking forward to the future, Du Meng said that different emerging industries in different eras that drive the development of the times should conform to the development trend of the times. In the next decade, we are still optimistic about the three major tracks of consumption, medicine and technology, but at the same time, we must always grasp the opportunity to stand out in the subdivision industry within the track.

Editor-in-Charge: Wang Jie

Proofreader: Liu Wei