The capital market, several degrees of ups and downs, always exchange new peaches for old charms, and in the past 100 years, China's capital market has been folded one by one. But for Liu Yang, the goddess of Hong Kong female stocks, the era that belongs to her is still adding new stories.
On October 25, Liu Yang's Xize Investment Management Company (hereinafter referred to as "Xize Investment") announced the full moon report card after joining the second batch of "NewPort stocks", and the comprehensive performance of its 10 stocks far outperformed the market, the Hang Seng China New Economy Index and a number of funds, and the female stock god once again continued her legend in the secondary market.
Those who do not seek the overall situation are not enough to seek a domain.
Data is the best example. Based on the date of release of the "Newport Stocks" index on December 21, 2020, with the total market capitalization of all sample stocks on that day as the weight, the index basis point is 100 points, plus the first batch of "Newport stocks", as of October 24, the total return of the index is as high as 55.4%; the Hang Seng China New Economy Index is -5.4% in the same period, and the current "NewPort Stocks" index significantly outperforms the Hang Seng China New Economy Index by 60.8%, becoming one of the most eye-catching new economy indices in Hong Kong stocks.
"There is a close logical relationship between the new trend of new Hong Kong stocks in the new economy: the new economy is the valuation basis of new Hong Kong stocks, and new Hong Kong stocks will create new trends and new landscapes in Hong Kong capital market." As the chairman and investment director of Caesar Investment, Liu Yang explained the investment logic behind his two batches of "New Hong Kong stocks".
Known as the "female Buffett", Liu Yang has 30 years of secondary market investment history, through the global three financial storms and stand tall in the market, is the only woman in the Hong Kong financial market to be called a stock god by the media and the market; as China's leading boutique asset management company, Caesars Investment was established in 1994, which has a history of 27 years.
"NewPort Stocks" is a summary of Liu Yang's 30 years of investment practice, which also confirms her research experience and practice results on trend investment over the years. The concept was launched at the end of December 2020, she interpreted the undervalued NewPort stocks generated by the current Market under China's new economy through the three dimensions of time, space and culture, and called for the new trend of China's economic development in the future through Newport stocks, which resonated with the fourth industrial revolution. In the same month, in an interview with the Hong Kong media, Liu Yang made a prediction that the US stock bubble was coming, and in 2021, the Hang Seng Index was expected to break through 30,000 points! But the ensuing magic year of 2021 has greatly surprised market investors.
The Hong Kong stock market in 2021 was terrifying, and at the beginning of the year, Hong Kong stocks sang all the way and rose up. Thanks to the clarity of the 14th Five-Year Plan policy, China, as the first country to pin down the spread of the new crown epidemic, has quickly entered a stage of economic recovery, and the GDP has returned to pre-epidemic levels in the middle of this year. At the same time, the central government supports the implementation of the National Security Law in Hong Kong, and the influx of funds from the south, as predicted by many securities companies, the net purchase of funds from the south in the first quarter exceeded 500 billion yuan. This contributed to the Hang Seng Index reaching a high of 31,183.36 points since 2018 on February 18 this year. In an interview with Sina Finance Live on January 26, based on these good news, Liu Yang even updated his prediction for the Hong Kong Stock Hang Seng Index in 2021, which is expected to reach 35,000 points!
Unfortunately, the market is full of twists and turns, starting from the second quarter, with the implementation of policies for network security rectification, education and Internet sector rectification, the Hong Kong stock market began to fluctuate and fluctuate for a long time, and fell to a new low of 23681.44 points on October 5, many wealth vanished, and countless legendary funds disappeared from the market. Therefore, in order to comply with a series of policy changes, Liu Yang carefully selected 5 new Hong Kong stocks to join the existing index in September based on his own understanding of trend investment and in line with the trend of the general environment. Therefore, by peeking into the leopard, looking for laws from history, obtaining mirrors from success, and exploring the trend and cyclicality of Liu Yang's 30 years of thinking about the market by carefully dissecting the stock selection logic of two batches of "Newport stocks" under a magnifying glass, we can find companies with great moats.
The investment logic behind the two batches of "NewPort stocks"
Supply and demand theory, efficient market hypothesis, Merrill Lynch clock research, industry life cycle, capital asset pricing model, each theory contains a certain logic of the times, with a certain philosophical foundation. In fact, there are only three analytical methods: basic analysis, technical analysis, and evolutionary analysis.
Combined with these three analytical tools, Liu Yang, who once adhered to the position of value investment, now stands on the battlefield of trend investment and puts forward the concept of "penetration method", that is, first judge national policies, economic status and strength from top to bottom, explore the sectors and industries of cyclical opportunities, and then find excellent companies from bottom to top, followed by China's new economy companies that adapt to the trend of the fourth industrial revolution.
Specific to the investment selection, the choice of Xixuan investment has become another kind of market, doing "non-consensus" things, abandoning the choice of investment in the big white horse strategy, but choosing the new "little giant" enterprise track of Jingte - choosing enterprises that continue to grow high and can become industry leaders in the future. The "Little Giant" enterprises, behind which represent new productivity and business models, can follow the new wave of new technology to upgrade and iterate in a timely manner, change and transformation of the new generation of forces, which is also an important cornerstone of excess returns.
In terms of rollout, the second batch of "NewPort stocks" list includes China Dili (01387), China Water (00855), Yunxiang Technology (02131), Binhai Investment (02886) and Zhongji Longevity Science (00767), and the above-mentioned "NewPort Stocks" are divided into the fields of new people's livelihood, new infrastructure, new kinetic energy, new health and new media.
In Liu Yang's view, these 5 "Xingang stocks" are a supplement to the 5 companies selected as "Xingang stocks" at the end of 2020, namely Tiangong International (00826), Fubo Group (03738), Friendship Time (06820), Yingke (03700) and Yusheng Culture (01859), which is also in line with its three principles of "Newport stock" investment. The three principles are:
a. New economic industries that meet the conditions of the six "new" goals of economic and social development in the 14th Five-Year Plan;
b. It is an enterprise thatse market value is expected to reach the target of being selected for Shenzhen-Hong Kong Stock Connect and Shanghai-Hong Kong Stock Connect in the next two years, and is an enterprise that can continue to grow profitably and rapidly;
c. It is a leading enterprise that continues to achieve strong positive cash flow and keep the debt ratio below 50% for a long time.
In terms of specific individual stocks, since the announcement of the index, the first batch of "new Hong Kong stocks" Zhongtiangong International, Fubo Group and Yingke have achieved performance far beyond the index, with a closing increase of 25.2%, 82.2% and 45.3% respectively as of October 22. Behind the bulls of the above-mentioned underlying stock prices, there is a strong fundamental support.
Taking Tiangong International as an example, in the first half of 2021, the company's tool steel output jumped to the first place in the world, powder metallurgy business development is fruitful, in addition, the company is building a new 50,000 tons of tool steel and powder metallurgy Phase 2, and plans to spin off back to a listing, the company seems to have ushered in a period of rapid development.
Fubo Group and Yingke also have their own highlights, the former relies on years of accumulation of achievements in leading copyright protection technology strength, with the domestic and foreign copyright protection ushered in the golden growth period, technology applications and industry trends resonance under the company's strength ushered in the advancement; the latter has a continuous enrichment of social product matrix, the future development of great market space and development potential, diversified layout is expected to bring room for continuous improvement of the company's value.
Remarks: Friendship Time calendar yearly yield per share
In the four years from 2017 to 2021, the revenue of Friendship Time increased by 23.11%, 109%, 15.35% and 29.2% respectively, and the net profit increased by 46%, 185%, 23.41% and 21.18% respectively, which was much higher than the revenue growth. At present, the debt of Friendship Time is only 9.72%, but the net cash at the end of 2020 reached 575 million yuan, an increase of 68.37% year-on-year; the cash and cash equivalents at the end of the period reached 1.093 billion yuan, an increase of 22.37% year-on-year. With the implementation of the policy, it will take the lead in the mainland mobile game market of about 300 billion yuan in 2024.
The first batch of "NewPort stocks" Zhuyu was in front, verifying Liu Yang's unique insight, and still insisting on in-depth tracking and research of outstanding private and private enterprises in the context of investors gathering large market value companies and holding white horse stocks, digging out high-quality targets that were snubbed and despised by the market, and finding the critical value of business outbreaks waiting for the opportunity to buy.
Looking at the fundamentals of the second batch of "Newport stocks" companies, it is not difficult to find that the targets of this type are the same as the bull stocks in the first batch of "NewPort stocks" generally have the potential to usher in explosive growth in the short term, and have the potential to become leading enterprises in the long run.
China's geographical advantages: One of the leading agricultural product circulation service providers in China, with a layout of 10 agricultural and sideline products markets in 7 cities across the country and more than 1.5 million square meters of high-quality land. At present, ten agricultural product wholesale markets are operated in seven cities in China, and in the semi-annual report previously disclosed, the company has reversed the decline in profit growth and returned to growth, and the next performance growth is expected to accelerate.
From a financial point of view, China Dili's operating cash flow of 2021h1 was 0.29 billion yuan, achieving positive inflows for the third consecutive year, and the proportion of operating profit was maintained at a high level. In addition, the company's asset-liability ratio was 28.72%, which is already the third consecutive year of decline, a sharp decline of 5.94% from the end of 2019.
China Water: China Water's performance has continued to reach new highs over the past four years, with net profits growing by more than 17% and reaching a record 2.507 billion yuan in 2020.
The company's market prospects are imaginative. In addition to the tap water supply business, the company has been actively exploring new businesses for direct drinking water since 2019. At the policy level, considering that the 14th Five-Year Plan for Plastic Pollution Control action plan triggered by China's National Development and Reform Commission in September this year requires public institutions to take the lead in reducing single-use plastic products and explore the pilot project of replacing plastic bottled water with direct drinking water. This move is expected to continue to stimulate the demand for direct drinking water consumption, and China Water is expected to benefit directly.
Yunxiang Technology: The business is based on today's hot short video track, and Yunxiang Technology also has great potential. At present, the company has effectively established an ecosystem with short video marketing solutions, content production and distribution capabilities as the core, forming an integrated online marketing ecological chain. From a financial point of view, from 2017 to 2020, the company's revenue increased from 235 million yuan to 2.577 billion yuan, with an annual compound growth rate of 81.9%. In the future, as the market size of the short video industry maintains rapid growth, the company's performance and stock price are expected to continue to be released.
Binhai Investment: As a fast-growing clean energy operator in China, Binhai Investment's natural gas business covers seven provinces and two municipalities directly under the central government, with 38 operating units. According to the semi-annual report, Binhai Investment achieved revenue of HK$2.317 billion, an increase of 26.34% year-on-year; net profit reached HK$231 million, an increase of 60.62%. Looking ahead, as the company's scale continues to expand with high quality, the stock price of Binhai Investment may gradually leave the bottom area and be revalued by the market.
As of November 2, Binhai Investment's price-to-earnings ratio was only 4.98 times, far lower than the earnings ratio of many other gas stock markets in Hong Kong stocks. It is clear that despite the excellent fundamentals of coastal investment, it is undervalued by the market.
Zhongji Longevity Science: Judging from the trend events, on October 29, 2021, Yan Ligeng, chairman of Zhongji Longevity Science, acquired 512 million shares of the company's common stock, with a total consideration of about HK$256 million, and did not rule out the possibility of continuing to increase the company's shares in the future.
From the perspective of the company's target, as the scarce "longevity concept of the first share" in the capital market, the company anchors the "golden track" of longevity science, actively integrates the world's top resources in the past period of time, promotes epitaxial mergers and acquisitions of advanced medical treatment, advanced testing and other projects, and in the context of endogenous + epitaxial two-wheel drive, the company may be "reborn" and burst out new growth momentum in the 100 billion blue ocean market.
According to the data, in the first half of this year, the revenue of Zhongji Longevity Science Business was HK$7.171 million, accounting for 44.5% of the total revenue, but the proportion rose rapidly. At the same time, its debt ratio has been at a low level for many years, and it has been declining, and in 2019-2021 H1, its debt ratio is 9.27%, 9.36%, and 5.58%, respectively.
Liu Yang believes that for example, photovoltaics, new energy, new materials, new infrastructure, biotechnology, 5G, digital revolution, financial technology, etc. are all important directions for China's economic transformation. There is no country in the world, like China, which has a complete, high-end manufacturing and production capacity, and China's exports have been strong during the epidemic, "everyone is printing money, only China is producing." We are truly productive. This is the big trend that you have to see."
Liu Yang's trend investment battlefield
Investment does not have to be more profitable than who is short-term, but more to see who lives long, time is the best touchstone to test investment results.
Some people have watched the market for 10 years, but Liu Yang has watched for 30 years. Today, she even often personally hits a single button in the trading room, that is, to maintain a slight distance from the market and maintain her sensitivity to the market. Liu Yang said bluntly that he should fear the market, and he is still learning.
As China's first-generation fund manager, Liu Yang has personally experienced, witnessed and participated in the development of China's capital market, and even experienced almost all the global financial crises since the 1990s, especially the Asian financial crisis in 1997 and the US subprime mortgage crisis in 2008.
"The market is my jianghu." Liu Yang has experienced several rounds of bull and bear market turmoil, crossed the mid-life crisis, and his investment style has taken shape, but he is still active in the front line of the market. A few years ago, combined with the reality of Hong Kong stocks and A-shares, this period of rapid economic growth in China's economy also subverted the investment philosophy she had always adhered to, from the value investment that had achieved her to trend investment, and began to gradually increase her layout in China.
Liu Yang said: "I am not disbelieving (long-termism), but the Internet has subverted the times, the trend leads the future, and investment must be deployed for a long time and a short time." Internet companies are characterized by fast, so now give yourself a review every year. ”
The starting point of this logic is rooted in the short-term thrust of the subject matter, based on the growth of the long-term track and the long-term driving force of the company. Based on this, companies can be selected from top to bottom and explored from near to far.
Behind the heavy position of China, especially private enterprises, Liu Yang bluntly said that China's new economy is breaking out of the cocoon in the complex relationship with the old economy and the traditional economy that is both inherited and conflicted with the unstoppable trend. On the one hand, excess capacity and excessive debt in the era of large-scale industry restrict the new momentum of the economy, on the other hand, the trend of differentiation of information and digital technologies in the creators of another new world is intensifying. "In this moment of turmoil, collision and handover between the old and the new world, everyone should be in awe and walk on thin ice."
The new economy has gone from the industrial and technological level to the social and cultural level, and the impact on us can be said to be revolutionary, requiring a deeper set of investment philosophy insights, at least from the three dimensions of time, space and culture.
From the dimension of time, it is to look at the deepening period of the fourth industrial revolution and the ebb and flow period of the third industrial revolution along the long historical process of industrialization, which is the background of the era in which the new economy was born. From this point of view, the investment philosophy of Caesar investment, the wave of industrialization, the industrial revolution, or the often said Kondratiev cycle, should be the first macro factor to do investment considerations, and all the heavy positions of Caesar investment should be in line with the general trend of the fourth industrial wave at present.
If the first industrial revolution was resilient by Britain, the second industrial revolution was led by Britain and the United States, and the third industrial revolution was led by the United States, then the fourth industrial revolution will be led by the United States and China.
From 5G to new energy, from artificial intelligence to biological engineering, China's stable social system, perfect industrial chain support, unified large market, huge engineering dividends, strong infrastructure construction capabilities, and million-level computing scientists and engineers will lay the foundation for China's competitiveness in the fourth industrial revolution.
Buffett's investment philosophy has four systems: find great companies; less is more; bet big bets on high-probability events; be patient and don't worry about short-term price fluctuations. Heavy position in China, following the trend, choosing the small giants in the industry, and determining the enterprises with steady operation, integrity and high dividend returns, is the logic and confidence of Liu Yang and her Xize investment in the two batches of "Newport stocks" to select the current 10 stocks.