Financial Associated Press (Beijing, reporter Chen Junling) news, after 8 months of high-profile "private", Lin Peng, former star fund manager of Dongfang Red Asset Management and chairman of Harmony Huiyi, spoke out again, reflecting on the "black swan" of the epidemic, insight into market valuation differentiation, and discussion of investment opportunities and pitfalls.
In May last year, Lin Peng bid farewell to Dongfang Red Asset Management with a letter to fund holders with "Thanksgiving, Trust, and Honor to Travel Together". Three months later, Shanghai Harmony Huiyi Asset Management Co., Ltd., founded by Lin Peng, completed the private placement registration in the China Foundation Association.
As of January 13, 2020, Harmony Hui has filed a total of 38 products in the China Foundation Association. Among them, the most blood-curdling day was November 2, 2020, Lin Peng filed 25 products in one go. In just a few months, he has achieved a "tens of billions of scale" that many private equity peers have been unable to achieve for many years.
However, behind the superficial scenery, the bitterness of private equity entrepreneurship can only be understood by those who have experienced it. Especially in the "darkest moment" of the black swan of the epidemic last year, the "circuit breaker", the V-shaped reversal, and the restructuring of the post-epidemic market have made people in the deep market unforgettable.
"The impact of the epidemic will eventually pass, but this black swan event that has gone down in history has left us not only painful memories and valuable lessons, but also triggered us to think deeply - don't waste a crisis." Looking back at the capital market in the past year, Lin Peng sighed.
At the same time, floods of liquidity have also supported the boom in global capital markets. However, investors need to be in awe at all times. Lin Peng believes that the level of differentiation of the market is already at the highest water level in history, and it is necessary to "remove the false and the true" in the high-quality track and avoid the trap of low valuation.
"Differentiation" is the main theme of 2020 - Lin Peng is straight to the point. Although the major sectors of A-shares rose significantly throughout the year, with the Shanghai Composite +14%, the CSI 300+27%, and the ChiNext +65%, the median A-share only achieved a rise of +1.7%, and nearly half of the stocks still closed down throughout the year.
The differentiation of market performance is reflected both between and within the industry. At present, the level of market differentiation observed by Lin Peng's team is already at the highest water level in history, in the quadrant of "moderate overall valuation vs huge structural differentiation".
In Lin Peng's view, the market valuation is highly differentiated, reflecting the evolution of the macro economy from past aggregate growth to structural drive. Among them, industries that represent the trend of industrial upgrading have attracted more funds. In the relaxed epidemic environment, valuations have gradually departed from the previous system and reached new highs.
For example, the relative valuation of industries that have been less damaged by the epidemic or benefited from the epidemic is higher, while the relative valuation of traditional industries damaged by the epidemic is relatively low. Among them, the valuation gap between food and beverage, leisure services, military industry, automobiles and other sectors and the market as a whole has approached its highest level in history.
From the perspective of the industry, different enterprises are also showing the characteristics of "differentiation". At present, the average valuation differentiation level in the industry is already at the level of the historical 65% quantile; the current internal valuation differentiation of many industries has exceeded the historical quantile of more than 80% - such industries are mainly concentrated in traditional fields: banking, building decoration, chemicals, transportation, etc.
"This means that even in traditional industries, high-quality companies are opening up the gap with their peers and enjoying the increase in the stock share brought about by competitiveness." Lin Peng analyzed.
Behind the sharp differentiation of the capital market is the result of the resonance of multiple factors. First of all, in the process of economic transformation, the total growth has slowed down and more emphasis has been placed on structural growth; second, the policy attaches great importance to the financing support of the capital market to the real sector, encourages the registration system and the delisting system, and the survival of the fittest; finally, abundant liquidity and structural money-making effects push the trend of differentiation to the extreme.
How will 2021 be interpreted? Lin Peng synthesizes the judgment of macro trends, industrial patterns, liquidity and valuation, and believes that the follow-up market still continues the structural market, and this structural characteristic is reflected in both high-quality growth industries and traditional industries.
Institutional clinging, valuation differentiation, market fragmentation... At the beginning of 2021, the capital market still seems to continue the context of last year, how to find a good company with a high-quality track under the appearance of disturbances and intricacies, many investors are still confused.
Lin Peng, who has been immersed in the capital market for more than 20 years, through insight and thinking in recent times, has made a penetrating analysis of the macro and micro factors affecting the stock market in 2021, and shared the investment strategy of Harmony Huiyi.
At the macro level, Lin Peng has two judgments: one is that with the promotion of vaccines, the global economy is back on track, and the profit difference between the epidemic benefits and the industries damaged by the epidemic will converge; the second is that the marginal convergence of the monetary environment is difficult to sustain purely relying on valuation expansion.
"Investment needs to strike a balance between profit repair and monetary convergence. In the high-quality track, there must be false truth, your company is not necessarily good, there will be differentiation within the growth stocks, and we must seek a reasonable company. Lin Peng said.
Most of the undervalued industries are representatives of the old economy: real estate, banking, construction, steel, coal, etc., which have lacked growth for a long time, and most of these companies are also lackluster. What Lin Peng should pay attention to is that after the industry bids farewell to the barbaric growth of the past, the endogenous ability and peers to open the gap, can get the share of high-quality enterprises, to avoid the trap of low-value investment.
Catalyzed by the epidemic, Lin Peng believes that there are several long-term trends accelerating the realization - one is that China's dominant manufacturing industry is becoming the global leader; the second is that the renminbi has entered a long-term appreciation channel, and overseas funds will continue to flow in; third, the consumption upgrading trend of commodities extends to service consumption.
For example, due to physical isolation, the process of innovation and upgrading of many service consumption has been accelerated. For example, the number of users of online education, telemedicine and other products has increased rapidly; service upgrades around community life have also exploded, including fresh e-commerce, community group buying, etc.
"We need to carefully identify the quality of growth and avoid the pitfalls of undervaluation." Lin Peng said that the money-making effect of the capital market in the past two years may be diluted, and the risk-return ratio of investment and the importance of drawdown control will increase.
From a longer-term perspective, the epidemic is a touchstone that allows China to demonstrate its great power and responsibility as a great power. Lin Peng firmly believes that although the market may fluctuate in the short term, looking to the farther future, the upward trend of China's national fortunes has not changed.