Foreign investors who invested in Tesla to make 6 billion yuan will get most of the profits of A-share new energy equipment manufacturers

Red Weekly cover article interviewed Michael Cass, vice president and fund manager of Barron Capital Group, whose company manages more than $50 billion in assets, including more than $6 billion in profits from long investments in Tesla.

As a fund manager who has long observed emerging markets, including the A-share market, and holds a large number of shares of A-share market companies, Michael Cass is very optimistic about the A-share market and the Indian market. Especially in the interview, he also talked about some views on the Chinese market is currently shifting from low value-added industries to high-quality, high-value-added industries.

Red Weekly: How do you see the Chinese market?

Michael Cass: What's happening in China is also fascinating. For a long time, I have been optimistic about China's development opportunities. For some of the recent policy changes in China, I think there are many misinterpretations internationally. When I talk to companies in the United States, I find that there is an over-interpretation in both the Financial Media and other media in the United States, and those who introduce china dynamics are not people who invest in China, or even have nothing to do with investment, but it is such people who are expressing their views on the new policy toward China. Some of them conclude that China is somehow no longer suitable for investment. Not most, but some people do think so.

We have different views. The United States and China are different in many ways, for example, it is clear that our development model is different, and the economic and corporate development model is different. In the United States, because there are many compromises between parties that weaken the governing body's ability to act. In China, the management agency introduces the best plan, and the enterprise is responsible for implementing this plan. These are two different systems. A lot of U.S. investors love the nuances and love the exciting things that're happening.

For us, China is weakening low-value, low-quality economic activities such as real estate development, infrastructure development, and exports of low-value-added goods. Over the past 20 years, these have been the drivers of China's economic growth. But in recent years, the drivers have rapidly shifted to high-quality, higher-value-added industries, which will lead to huge growth investment opportunities.

Red Weekly: What growth opportunities in China attract you?

Michael Cass: Our emerging markets fund holds a lot of shares in Chinese A-share companies, rather than the more popular Chinese ADR share in the U.S. We believe that China's emerging industries will create more value, such as cloud computing, semiconductors, electric vehicles, biotechnology, pharmaceuticals, high-end consumer, advanced manufacturing, automation and robotics, which are all areas of focus under the theme of China's growth. Companies in these areas have been discovered by the market and are becoming more and more valuable. In my opinion, the market capitalization of some companies and their long-term potential is similar to that of Tencent or Alibaba 10 years ago.

Some (emerging industries) are in the early stages of development, such as China's automotive industry. Foreign equipment manufacturers, such as German, American and Japanese car companies, account for a large market share in the Chinese automotive industry. Compared to their own country, it can be sold at a higher price in China because of the strong demand in the Chinese market. But now, we are moving from the era of internal combustion engine cars to electric vehicles, and we believe that china's domestic equipment manufacturers will get most of the profits of the automotive industry in the future.

China's other markets are as large as the electric vehicle market, China is moving in the direction of domestic and foreign "double circulation", domestic demand is the soil for the development of these enterprises, in addition to electric vehicles, the semiconductor field also reflects this well. China produces about 5% of its semiconductor products, but consumes 30% of the world's semiconductor products because Chinese companies have weaker production capacity. But as the semiconductor industry develops, China will rely less on foreign countries. Of course, it will take a long time for China to complete this process.

More wonderful views have been published in the 96th issue of "Securities Market Red Weekly", the original text of "China Emerging Technology Recreates the Next "Tencent, Ali" - Dialogue with Michael Cass, Vice President and Fund Manager of Barron Capital Group", author Li Jian, more wonderful content can be paid attention to in the "Securities Market Red Weekly" public account.

(The stocks involved in this article are only examples, not trading recommendations)