Mainland-Hong Kong Stock Connect and the national team's funds are heavy! The performance has increased for 3 consecutive years! The stock price of 33 companies may be "mistakenly killed"!

Securities Market Weekly Market Number

2024-06-28 09:30Red Journal Finance Official Account

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01 With the recent adjustment of A-shares, the stock prices of 33 companies whose performance has increased for 3 consecutive years may have suffered a "wrongful kill".

02 Among them, 17 companies have maintained double-digit growth in profitability, such as Cuihua Jewelry and Changhong Meiling.

03At the same time, these companies are favored by domestic and foreign institutional funds, such as Huijin Company and the Social Security Fund.

04However, some companies have recently retraced their stock prices significantly, such as BAHEAL Pharmaceutical and Otway.

05 Recently, the companies that institutions have paid attention to include Aimeike, Yasui Food, and the common people, and the number of institutions participating in the survey has exceeded 100 since the second quarter.

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Text丨Shang Yang

There is a saying on Wall Street, "Risks go up, opportunities go down." Recently, A-shares once again ushered in a wave of adjustment, on June 21, the 3,000-point mark was lost, and there were no eggs under the nest, and many companies with stable growth were also sold by funds, and it was difficult to escape the panic fall, and they may have suffered a "wrongful kill" in the market.

33 companies may have suffered "wrongful killings"

In this round of adjustment, which began on May 21, the Shanghai Composite Index has accumulated a considerable retracement, with a range of more than 7%, and in the whole A market, the stock prices of 4,776 companies are on a downward trend, and 936 companies have fallen by more than 20%, which is significantly deeper than the market average.

Statistically, 33 of the companies with a decline of more than 20% in the range have continued to make profits for nearly 3 full years from 2021 to 2023, and at the same time, they also continued to end with profits in the first quarter of this year, and they have always shown a positive growth trend year-on-year. And if the growth standard is raised further, there are 17 companies that have consistently maintained double-digit earnings growth.

For example, in 2023, the company's jewelry business will achieve a significant increase in operating performance due to the rise in gold, with a net profit of 173 million yuan during the reporting period, a significant increase of 266.82% year-on-year. According to the first quarter report of 2024 disclosed on the same day as the 2023 annual report, the company's net profit of 60.2009 million yuan in the first quarter of this year also achieved a year-on-year increase of 65.28% again, and observing historical financial report data, in 2021 and 2022, the company's net profit has also achieved year-on-year growth under the premise of continuous profitability, and the growth rate is gradually rising. The company said that in 2024, it will uphold the development model of dual main businesses and dual cores, with excellent management capabilities and superior technology research and development as the core driving force to promote the rapid growth of the company's business and continuous improvement of quality.

Changhong Meiling, which has also fallen sharply recently, has doubled its net profit for 3 consecutive years from 2021 to 2023, and also welcomed a "good start" in the first quarter of this year, with a net profit of 156 million yuan increased by 26.93% over the same period last year. At present, Changhong Meiling has the core industry of household appliances including refrigerators, air conditioners, washing machines, etc., and continues to cultivate and expand the household appliances and biomedical industries, and will also incubate the commercial cold chain and IoT technology industries, and expand other industries. Changhong Meiling, whose industrial form is constantly enriched and improved, is ushering in a new stage of development.

While the performance has continued to grow since 2021, some companies have booked the growth of net profit in the first half of this year in advance.

For example, the company's main business is the research and development, production and sales of high-end equipment, and its products are mainly used in the packaging and testing links of the photovoltaic industry, lithium battery industry and semiconductor industry. In 2023, Otway will increase its overseas market layout, and the company will set up wholly-owned subsidiaries in Japan and Singapore, which will carry out R&D, trade and other businesses overseas. The company's securities department said that in recent years, the expansion of overseas markets has been accelerated, and the situation in overseas markets this year is more optimistic than that of the same period last year. In 2023, Otway's overseas revenue will be 997.8 million yuan, accounting for 15.83% of total revenue, and the gross profit margin will be 46.99%. It is expected that the revenue in the first half of 2024 will be 3.999 billion yuan-4.451 billion yuan, a year-on-year increase of 58.84%-76.80%; The net profit attributable to the parent company was 692 million yuan to 772 million yuan, a year-on-year increase of 32.53%-47.82%. 

"Wrongly killed stocks" were heavily held by institutional funds

It has been observed that not only has the performance continued to grow steadily, but also many of the above-mentioned companies are also the favorites of domestic and foreign institutional funds.

For example, the Central Huijin Asset Management Co., Ltd. (hereinafter referred to as Huijin Company), known as the "national team" fund, at the end of the first quarter of this year, held a heavy position in Changchun High-tech and Haixin shares, and Luzhou Laojiao was not only favored by Huijin Company, but also China Securities Finance Co., Ltd., which is also a "national team" fund, among the top ten shareholders in the latest top ten.

Another batch of "national team" funds and social security funds have heavy positions in 10 companies such as Changhong Meiling, Qianwei Central Kitchen, and Baiyang Pharmaceutical.

In addition, Hong Kong Securities Clearing Co., Ltd., a capital company of the Mainland-Hong Kong Stock Connect, has also taken a heavy position in a number of companies whose performance has continued to grow but whose stock prices have recently retreated significantly.

For example, at the end of the first quarter of this year, while the 17011 portfolio of the Social Security Fund continued to be heavy, the latest holdings of Hong Kong Securities Clearing Co., Ltd. also increased by 785,900 shares compared with the end of the fourth quarter of 2023.

At the end of the first quarter, Otway also received a joint heavy position from the 406 portfolio of the National Social Security Fund and Hong Kong Securities Clearing Co., Ltd., and the latest position of Hong Kong Securities Clearing Co., Ltd. also further increased from 3,708,800 shares at the end of the fourth quarter of 2023 to 6,503,100 shares. At the end of the first quarter, the Ruiyuan Growth Value Mixed Fund managed by Fu Pengbo ranked the seventh largest shareholder of the company with a position of 3.7193 million shares, and the latest number of shares also increased by 988,700 shares compared with the end of the fourth quarter of 2023 (see attached chart).

In addition, combined with the latest institutional survey data, companies such as Aimeike, Yasui Food, Laobaimin, Changchun High-tech, Pumen Technology and other companies have also continued to receive the attention of institutional funds since the second quarter, and the number of institutions participating in the survey has exceeded 100 (see Table 2).

Taking Aimeike as an example, as the company gets involved in more and more tracks, institutions are quite concerned about its future business layout. The company said that at the beginning, the product was made around two dimensions, one was to respond to market demand, and the other was based on technology precipitation, constantly expanding and iterating the product line. After determining the market demand, we will pay attention to whether the R&D technology side can effectively and high-quality to undertake the market demand, or use cooperative BD and other methods to meet the market demand, so as to better serve downstream customers. In the future, in addition to the research and development of products in the field of medical cosmetology, the business may also expand to other directions such as orthopedics and ophthalmology. 

(The individual stocks mentioned in the article are for example analysis only, and do not make trading recommendations.) ）

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