With the gradual emergence of foreign family offices as the most promising new stars in the field of asset management, domestic family office enterprises have also attracted more and more attention, and Anhui Investment is one.
Since its inception in 2014, the goal slogan of Anhui Investment is "committed to becoming a true family office in China", and Zhang Haodong, as the founder, has also realized the transformation from "fund manager" to "fund manager + professional manager" to "fund manager + entrepreneur".
According to his resume, Zhang Haodong studied finance at the Central University of Finance and Economics as an undergraduate, majored in financial engineering at the University of International Business and Economics, and was also a member of the first phase of the health industry leadership class of Tsinghua Wudaokou Institute of Finance and served as a class committee member, with 19 years of industry experience, covering securities, futures, quantitative hedging, and mergers and acquisitions of listed companies. Prior to founding Anhui Investment Group, Zhang Haodong was the director of the investment department of the holding company of the listed company Orient Group, specializing in the asset management of tens of billions of families and the capital operation of listed companies.
In 2020, when the epidemic is raging around the world, all walks of life are experiencing unprecedented tests, and what challenges and opportunities have been encountered by Anhui Investment, which has been racing in the primary and secondary markets for many years? What are some unique insights into the industry ecosystem? On December 10th, the 5th International Forum on Intelligent Finance in the Financial Sector and the 2020 Annual Ceremony of the Financial Sector "Navigating China" were held in Beijing, and Anhui Investment and nearly 400 financial institutions gathered together, and the financial community also took this opportunity to launch an in-depth dialogue with Zhang Haodong.
Zhang Haodong believes that the boundaries between the primary market and the secondary market are becoming more and more blurred in the new market environment, and the epidemic has strengthened this phenomenon. As the market becomes more and more standardized, the investment logic will continue to move closer to value growth, and the future capital market will gather more high-quality resources for excellent enterprises in the good track.
For the pharmaceutical sector with obvious changes during the year, Anhui Investment, which has been laying out the pharmaceutical and medical field for many years, said that it is still firmly optimistic about the prospects of the industry. Zhang Haodong believes that the current adjustment of pharmaceutical stocks does not affect the long-term trend, but only a reasonable consolidation after the stock price rises too fast. As for the adjustment of the collection and medical insurance directory, Zhang Haodong believes that this will be a general direction and trend, which can further force enterprises to strengthen innovation and achieve greater domestic substitution in the huge domestic market, and those unaffected segments will also usher in the gathering of some industry allocation funds.
For next year's industry outlook, Zhang Haodong also highlighted the new energy automobile industry chain on the outlet, as well as the military industry in the big cycle, he believes that new energy vehicles not only represent a new technology, but also will be an important area to drive the consumer economy in the future.
In the past 7 years of development, Anhui Investment has a complete and effective investment strategy, which Zhang Haodong summarized as "four-dimensional integration", namely value growth research advantages, industrial thinking and depth advantages, technical analysis and trading capabilities and quantitative investment technology research advantages.
Financial sector: As one of the few institutions in China that has both primary and secondary market investment management capabilities and business models, what are the core businesses of the company?
Zhang Haodong: Our core business was clearly positioned in two aspects at the beginning of its establishment in 2014, on the one hand, it was a secondary private securities fund, which coincided with the establishment of the Asset Management Association and the issuance of licenses, which enabled sunshine private equity to become a licensed institution; on the other hand, equity investment and mergers and acquisitions and restructuring business in the primary market. In the start-up period, investment management companies had not yet separated the equity investment business from the secondary market, so at the beginning of its establishment, it also included some mergers and acquisitions, which are currently mainly positioned in the medical field. This is due to our previous more than a decade of industry experience in public companies and managing related businesses. Therefore, in the capital market, we have both first-level business investment management capabilities and second-level investment management capabilities.
In fact, in our view, investment is a whole, although there is still a first-level, second-level positioning, but for the investment industry, the boundaries may become more and more blurred in the future. Many industry-based investments can also give priority to investment targets such as listed companies, on the one hand, these targets have better liquidity, on the other hand, they can also make long-term and sustainable investments. In fact, equity mergers and acquisitions also use the secondary market IPO or merger and reorganization as the main exit channel, so the completion of IPO or merger and reorganization is not the end of investment, or even the real starting point.
So we will now see a lot of excellent companies, not to go public and complete the task, but to enter a new platform to promote the development of industry companies. In the new market environment, the value-added space of investment before listing actually depends on the performance of the investment in a period of time after listing.
Financial community: In such an extraordinary year as this year, what is your biggest feeling under the impact of the epidemic? Is the boundary between primary and secondary closer or farther?
Zhang Haodong: In fact, it is closer, and the investment strategy of the industry leader has both first-level investment ability and second-level investment strength. If they are optimistic about this industry, they will definitely prefer listed companies in the industry, because listed companies are usually the leaders of an industry, and if they are not listed, they may invest in the equity of unlisted companies. So in my opinion, this year's epidemic has accelerated the overall development of the capital market, and many IPOs have not achieved a very good, high-speed growth, and the real investment appreciation can be achieved in the post-listing stage.
For example, Tencent, Tencent was listed 10 years ago, and the value of the Hong Kong stock market has increased by more than 100 times in the past 10 years. The listing point of many excellent companies may be the lowest point of their stock prices, and such companies have sustained growth. Our current market is more and more standardized, more and more in line with the investment logic of value growth, the future capital market will gather more high-quality resources for the excellent enterprises of the good track, and then promote the better development of enterprises.
Financial industry: The medical industry is the area of the perennial layout of Anhui Investment, and this year's secondary market has also come out of a super market, do you think the current correction is in place? Under the interference of news such as collection and vaccines, what is your view on the future trend?
Zhang Haodong: The medical industry is a very large industry, accounting for nearly 10% of the current volume of 4200 listed companies, and the proportion of the main board, small and medium-sized board, ChiNext board, and science and technology innovation board is not small. From the perspective of the industry, our total annual health consumption has exceeded 6 trillion, which is a relatively large industry with a relatively large GDP of 100 trillion. Medical care itself as an anti-cyclical, weak cycle industry, with sustained growth, superimposed on the outbreak of the new crown epidemic this year and the far-reaching impact, everyone has paid more attention to the medical health, public health construction related fields, industry segments will usher in more opportunities. The current correction does not affect the long-term trend, but only a reasonable consolidation after the stock price rises too fast.
However, there are actually many subdivisions of the entire pharmaceutical and medical industry, and there are many kinds of drugs alone, including innovative drugs, generic drugs, traditional Chinese medicines, biological drugs, and APIs. The entire industry is also affected by a variety of factors, such as the health insurance policy for our large procurement of high-value consumables. Each segment of the medical industry is also a separate look, some are encouraged areas, some are restricted, and a certain degree of professionalism is required to understand the industry and the corresponding listed companies more thoroughly, in order to better grasp the opportunity. However, the general direction and trend of the general development of the medical industry are good.
As for the adjustment of the collection and medical insurance catalog, this is a general direction and trend, using the amount to exchange for a reasonable price, of course, these policies are currently in this run-in stage, not set in stone, and will continue to improve in the process of promotion, to be more adapted to such an environment. However, some segments are not affected by volume procurement, such as some self-funded services or self-funded devices, and listed companies may bring more industry allocation funds to the gathering. This model is also forcing our devices and service-related pharmaceutical companies to continue to innovate, industrial evolution and technological upgrading. With the advantages of core technology, in the face of huge domestic market demand, import substitution can be achieved to a large extent.
Financial Sector: In addition to the medical industry, looking forward to next year, which other industries are you optimistic about?
Zhang Haodong: In addition to firmly optimistic about the medical and health industry, we are also optimistic about the new energy vehicle industry chain. Because now to drive the economic recovery to rely on driving a relatively long industrial chain, rather than real estate, automobile consumption is one of the important areas, it can not only drive the recovery of the consumption field, but also drive the development of the entire manufacturing industry, more importantly, new energy vehicles represent a new technology. The demand for domestic new energy vehicles is large, especially the space for new energy to replace traditional fuel vehicles is very large, at present, the number of new energy vehicles in China is only 1 million, this number is far from enough compared to the huge domestic market, and the alternative space is a long-term logic, which does not include foreign countries. So we can see that this field has room for continuous growth, just like the Apple industry has driven the overall development of the domestic consumer electronics industry, as well as the rapid improvement of independent brands such as Huawei, Xiaomi, vivo, oppo, etc. The future industrial chain of new energy vehicles is even larger than that of mobile phones, and the space and sustainability of development are also greater, and some world-class enterprises will be formed in the industry, whether it is from the vehicle, battery, or the upstream industry of batteries, spare parts manufacturing, intelligent driving related industries, and even more upstream such as chip-related, are all with sustainable development space. At the same time, it also drives economic growth and consumption of important industries.
In addition, the military industry chain also has a large cycle of industry opportunities, and the military industry itself also represents a technology. In the past few years, military enterprises have not encountered particularly long-term opportunities, and the current environment of rapid technological development, industry upgrading, and accelerated equipment upgrading in China will bring huge development space for related industries or listed companies. It is also a very long industrial chain, including aerospace, naval equipment, army, missiles, unmanned aerial vehicles and related military electronics, etc., is a good field to drive the economy and promote the development of science and technology.
Financial circles: Specific to the new energy vehicles on the outlet, in addition to some new car-making forces, the older the more traditional car companies in the field of vehicle manufacturing have begun to join hands with some technology companies to enter the game, do you think that in the face of the new energy cake, new forces and traditional car companies who are more competitive?
Zhang Haodong: What we are more optimistic about is a combination, whether it is the transformation of traditional enterprises or the entry and extension of new enterprises.
Combined with foreign experience, such as BMW, Mercedes-Benz and other established car giants, they have a clear transformation plan, a strong technical reserve, and excellent models continue to launch and iterate, I think this is a path. For new forces, such as Xiaopeng and Weilai, they also have unique advantages, they have relatively little dependence on the path, such as the dependence of traditional vehicle manufacturing on the engine, many new forces have completely subverted the original model, and the development possibility is greater. So it's more important to take a path that suits your own style and characteristics and cultivate your core competitive advantage. It is like a large consumer electronics product, how to let customers get a better experience through this function, while at the same time forming their own characteristics in the service, is a more worthy of consideration. This cake is big and everyone has to eat.
Financials: What are some of the most memorable experiences you've had since you founded the company? What are the original intentions and advantages of focusing on high-net-worth families and enterprises?
Zhang Haodong: Our company was founded in early 2014, and at the beginning of its establishment, it was a single investment management department serving the family, which is not only responsible for the capital investment management and operation of the capital market, but also responsible for the overall family asset allocation, has a certain in-depth understanding of the needs of high-net-worth customers, and has accumulated certain experience and capabilities. This model can highlight our capabilities while maintaining our core characteristics.
When a separate joint family office was established in early 2014, the concept was very leading in the industry. Now there are also some institutions that have transformed into home offices or positioned as home offices, but they are generally still based on asset allocation or financial product sales as the core, and one of our biggest advantages or values is to have core management capabilities as the core. In addition to asset allocation, providing total solutions, and solution suggestions, we also provide more core capital wealth management, value preservation and appreciation or value creation, which is also the key to creating continuous customer recognition and continuous stickiness.
In addition to this, we also offer some non-financial services. In addition to wealth, the core appeal of the family also includes the development strategy of the enterprise, IPO, mergers and acquisitions, etc., which can be combined with the investment experience of the primary and secondary capital markets, as well as the experience of listed companies, and even the understanding of the rules of the game in the entire capital market, which can provide professional strategic advice for the long-term development and inheritance of high-net-worth customers.
There are also some value-added service advantages, such as the health management of individual entrepreneurs and their families. We have introduced Japan's high-end, sophisticated, and high-quality health management system from health examination, referral to assisted reproduction and stem cell therapy, providing top services that are not easy to achieve in China for the customer group. Legal aspects, including tax, marriage, inheritance, civil disputes, and legal advice on mergers and acquisitions.
Therefore, we have been very clearly positioned at the beginning of our establishment, and after nearly 7 years of development, we have built a very complete and leading family office format, and also have a certain moat.
Financial community: Can you talk about the current situation and prospects of domestic home office in light of experience?
Zhang Haodong: This field is in the ascendant, which also has a certain relationship with the era we are in. More than 40 years of reform and opening up, has reached the stage of shifting from the first generation of entrepreneurs to the second generation, the inheritance of this wealth, the inheritance of enterprises, the inheritance of family style, etc. need to be taken into account, including the rapid development of our economy in recent years has created many new wealthy classes, they also have urgent needs, the epidemic has given more time to think.
Financial circles: What impact will the handling of funds and wealth by entrepreneurial customers have on the next capital market?
Zhang Haodong: I think this is all part of the wealth of society. From the perspective of China's current top-level strategy, social resources must be guided to emerging industries, especially the capital market that most directly supports the development of emerging industries, and what supports emerging industries is not bank wealth management, bank loans, and trust loan financing, but capital markets. Therefore, in the future, how to introduce social resources, that is, social wealth, including bank savings, bank wealth management, trust funds, and even some real estate precipitation funds, to the pool of the capital market, and then support the development of these new industries, will become the top logic of the country, and it will not distinguish between high-net-worth customers and ordinary people. It's just that high-net-worth customers are more suitable for this type of private product and fund, while the general public is more suitable for public funds.
Financial community: A question about investment, you have served so many businesses and families, can you summarize what investment directions and investment strategies you can share?
Zhang Haodong: In the nearly 19 years since I graduated from the finance major in this industry, I have not changed the industry again, and gradually formed a "four-in-one" investment style.
The first dimension is value growth. After 2017, after the construction and improvement of the entire capital market system and the development orientation of regulators, the market has gradually transformed into value investment. This dimension just adapts to the development trend of the future capital market, which is different from the original speculation. This type of investment is divided into two categories, one is the traditional industry, which invests based on value, and the other is the growth industry, based on its growth sustainability. This investment style of value growth will be the mainstream core of the future.
The second dimension is to have industrial depth and thinking. Because we have the ability and experience to invest at the first level, we will have a more thorough understanding of the industry. Not only look at the research reports, look at the data, go to the listed company, talk about it, the big funds must have a deep understanding of the listed company based on the industry level, which is very similar to the Hillhouse model. Different from the hot spot chasing based on the liquidity convenience of the secondary market, under the long-term logic of value investment, it is also possible to grasp the swing of some rotations and structural opportunities.
The third dimension is the advantage of technical trading, that is, timing of money management. The future capital market must be dominated by institutional investors, and the research strength of institutional investors will tend to be homogeneous in the process of game, so it is more necessary to pay more attention to how to achieve better timing or game between each other.
The fourth dimension is based on quantitative research and investment. This involves the use of financial technology tools, big data analysis, and the application of strategic models, which can faster and more effectively realize the judgment of market trends, inflection points, and opportunities.
Financials: As the market becomes more professional, what do you think of the question of timing or stock selection?
Zhang Haodong: Long-term stock selection is the core, and timing is the key to short-term performance. If private equity funds want to achieve long-term sustained and stable investment returns, they must be guaranteed by selecting stocks and building portfolios. If you want to achieve stable performance in stages, you need very strong timing and transaction management capabilities and risk control capabilities.