Source of this article: Times Finance Author: Feng Yiqing
Chinese stocks have experienced another round of plunge.
As of the close of U.S. stocks on March 14, popular Chinese stocks continued to fall hard, Kingsoft Cloud fell nearly 48% in a single day, Zhihu fell more than 27%, iQiyi fell more than 24%, Pinduoduo and Ideal Automobile fell more than 20%, Xiaopeng Automobile fell more than 13%, Weilai fell more than 12%, JD.com, Alibaba, B station fell more than 10%, Baidu fell more than 8%.
According to Wind statistics, among the 272 Chinese private stocks listed in the United States, a total of 244 stocks have fallen since 2021, accounting for about 90%; of which 178 shares have fallen by more than 50%, accounting for nearly 2/3; of which 31 shares have fallen by more than 90%, accounting for more than 10%.
The direct cause of the plunge in Chinese stocks is mainly due to the previous "pre-delisting list".
The question that investors are most concerned about is: can Chinese stocks still be bought or held?
"Lost in a lot"
Times Finance has done a small survey of a number of investors: Can Chinese stocks still invest? Most retail investors are pessimistic about this.
"I'm numb, I don't know when I'll be able to get up again."
"I don't know if the Chinese stocks have saved me, but my wallet is empty anyway."
"Hundreds of thousands have drifted." Last summer, Xiaohua (pseudonym) followed her colleagues to invest in a QDll fund, which made her very remorseful, "Never touch the fund again." ”
Another Dr. Fang (pseudonym) made a big push during the summer vacation last year to copy New Oriental. At that time, he thought that the policy shock signal of the education and training industry had been released, but he did not recognize the capital value of the education and training industry from a strategic point of view, and the result was copied on the mountainside of $30. However, Dr. Fang has previously converted most of the Chinese stocks into stocks such as Apple and Microsoft, "which is a kind of escape." ”
Overall, from 2021 onwards, Chinese stocks have experienced several rounds of declines, and many individual stocks have fallen dramatically.
At present, among the Chinese companies with a market value of more than $1 billion, good future, fog core technology, New Oriental, New Egg, Kingsoft Cloud, Tuya Intelligence, Didi Chuxing, iQiyi and other companies have fallen by more than 90% since 2021.
Image source: Ying Wei Cai
After the stock price fell sharply, not only the shareholders and the basic people, but also many employees of large factories who received equity incentives could not sit still.
"After the first quarter window was released, I cashed out all the stocks that could be cashed, but now there are still 80% of the stocks that cannot be redeemed, and I don't know what kind of fall it will be." Wang Qi (pseudonym), who works at a major game factory, got the equity he got last year, and the market value he holds has shrunk by 40%.
A senior asset manager told Times Finance that the valuation of Chinese stocks was too high before, and everyone was accustomed to the loss of high-tech companies, but many companies have been listed for a long time and have not yet made a profit. "Investors are starving."
At present, the most anxious thing for investors may be: if the Chinese stock is really delisted, what will happen to the stock in the hands of the investor?
According to times finance, there are two main situations: one is that the Chinese stocks that have been listed in Hong Kong can exchange the US stock ADR for Hong Kong stocks; the other is that the shares of companies that are not listed on the Hong Kong stock market will be taken away at the current price (floating).
The path for Chinese stocks to return to A-share listing. Screenshot source: Tsinghua Financial Review, January 2022
The scale of the China-U.S. Interconnection Fund has increased significantly
Some people are afraid, and some people are greedy.
"I'm still making up for it." A white-collar Worker of an Internet company told Times Finance that it is almost impossible for the domestic Internet companies in the Chinese stock market to clear their value. "Buy it now, the room to continue to fall may still be a little bit." But it will definitely rise back, but it is a matter of time. ”
In the interview with Times Finance, some investors are eager to try to read the bottom of Chinese stocks. "The decline in this wave of Chinese stocks is very amazing, and there must be a lot of wrong-killed targets." Shareholder Pony (pseudonym) said.
Xiaoma's heavy-handed Chinese Interconnection Fund has always been the first choice for investors to allocate Chinese stocks.
As a QDII fund, China-U.S. Internet funds generally reposition popular Internet giants such as Tencent, Alibaba, and Meituan, and their U.S. stock positions are in areas where it is more difficult for investors to directly invest. In the past year, although the performance of China-wide Internet funds has generally fallen sharply, the total size of the fund has increased significantly.
The QDII fund of China-wide Interconnection, which has fallen by the top ten in the past year. Source: Wind Times Finance Watchmaking
According to times finance, like the individual exchange of foreign exchange, there is a quota limit, and the foreign exchange quota is also required for Chinese stocks investing in the US stock market. Within the fund company, the entire fund company shares the foreign exchange quota. For example, Chinese stock funds, U.S. stock funds, oil funds, dollar debt bases, etc., all require US dollar quotas. Therefore, investors may also face a risk that the fund company's foreign exchange quota is insufficient, resulting in purchase restrictions.
On the evening of March 8, BOCOM Schroder Fund issued an announcement that due to the fund's overseas securities investment quota approaching the upper limit, in order to stabilize the scale of the fund, its BOCOM Schroder Overseas China Internet Index Fund suspended the subscription (regular fixed investment) business from March 8, 2022.
In overseas markets, the trend of U.S. institutional investors selling Chinese stocks since the fourth quarter of 2020 has eased.
According to the SEC's latest institutional position data, as of the fourth quarter of 2021, the us (mutual fund + pension) institutional holdings of the U.S. (mutual fund + pension) institutional holdings accounted for 4.1% of their total market capitalization, which was basically the same as the proportion of 4.2% in the third quarter of 2021. Previously, in the fourth quarter of 2020, the proportion of U.S. institutional investors in the value of the U.S. stock market fell sharply from 7% in the third quarter of 2020 to 5.9%, after which the downward trend continued to ease significantly.
"This wave of decline has nothing to do with fundamentals. As long as the main business of these companies is still healthy, the stock price will definitely return to a reasonable range. Pony said optimistically.