Lin Peng, Chairman and General Manager of Harmony Huiyi
On the evening of August 5th, Star Private Equity Harmony Huiyi held a mid-term investor exchange meeting, at which Lin Peng, chairman and general manager of the company, shared his latest understanding of the market and investment.
Lin Peng believes that there is no systemic risk in the current stock market, and under social changes, capital changes and cultural changes, there need to be some changes in investment, but more to adhere to.
Key takeaways:
1. The current market valuation is extremely differentiated, the capital structure is healthier, and there is no systemic risk on the whole.
2. In a few popular sectors, "excessive enthusiasm" is also felt, the investor atmosphere is fanatical, and there are greater risks in the local area.
3, under the social changes, capital changes and cultural changes, there need to be some changes in investment, but more to adhere to.
4. At this stage, excellent companies should have the following characteristics: in line with the direction of social development, with reasonable business logic, high moral character, careful words and deeds.
5. In the context of the new era, it is necessary to be more sensitive to macro factors such as international politics and domestic industrial policies.
6, can not only look at the development of some industries and companies from the perspective of efficiency, but also take into account the concept of fairness.
7, the future of the car will be based on intelligent equipment, electric outside the intelligence, will be the most important value part of new energy vehicles.
8. Excellent Internet enterprises have clear contributions to the country and society, and meet the needs of the vast majority of the people from their own business models, means of competition and the products and services they provide.
There is no systemic risk in the stock market
In Lin Peng's view, there is no systemic risk in the stock market at this stage, and some high-quality companies are even pregnant with good investment opportunities. There are two logical underpinnings behind this conclusion:
On the one hand, market valuations are extremely polarized. Some existing companies continue to hit new highs in stock prices, are sought after by investors, have high valuations, and face the reduction of major shareholders. There are also some industries where valuations have reached an all-time low, and stock prices have fallen to the point where even state-owned shareholders have to increase their holdings and buy back. There have been very extreme situations in market sentiment that, historically, have not created systemic risks.
On the other hand, the financial structure is healthier. From the perspective of funds, at present, whether it is the transfer of bank wealth management funds to equity assets, or the continuous flow of overseas funds into the Chinese market for many years, there is still living water on the capital side. Compared to 2015, there is no significant leverage in the current market.
"Whether it is from the perspective of stock price structure or capital situation, the current market is very different from 2015. But in a few particularly hot sectors, we also felt some 'over-enthusiasm', valuations to very high positions, and saw the frenzy of investor sentiment, which was a bit similar to the situation in 2015 in terms of emotional intensity. Therefore, there is no systemic risk in the overall market, but there may be a large risk in the local area. Lin Peng pointed out.
Recently, many people are worried that foreign investment confidence in the Chinese market is weakening, which will lead to capital outflows. Lin Peng said that capital will definitely flow to the areas with the most potential earning opportunities, and the key is the future prospects of the underlying assets. Some companies with good fundamentals in A-shares, despite facing foreign purchase restrictions, still return to the normal upward channel based on their own fundamentals. In the end, it is the fundamental performance that determines the company's stock price.
To adapt to changes, we must dare to persevere
This year's stock market is extremely fragmented, with increased volatility and an increased impact on the market by policy changes. How to do a good job in such an environment is a new issue that domestic asset managers must face.
In his exchanges with investors, Lin Peng talked about some of his recent thoughts: "The proposition of tradition and change is always an unavoidable topic for investors. Underneath social change, financial change and cultural change, we need to have some change. But it's more about sticking to our values, sticking to our principles, and sticking to our attitude towards investment. Even in the face of a changing market environment and a market environment that is not conducive to us, we must still firmly choose excellent companies and accompany these companies to grow together. ”
Lin Peng believes that excellent companies at this stage should have the following characteristics:
It should be in line with the direction of social development. At this stage, which enterprises can solve the problem of intelligent operation of society, solve the problem of improving the living standards of ordinary people, and solve the problem of Chinese enterprises going out of the door and becoming global leaders, such companies will become enterprises in line with social development.
Have reasonable business logic. First of all, the long-term growth of a company depends on the return on net assets, and it is impossible for a company to rely on unlimited resources to achieve extraordinary growth. Secondly, industries with high returns will definitely bring more competition, and not all participants in the industries supported by policies can get very good returns.
Be virtuous and capable of creating value for all aspects of social relations, including investors. Instead of just doing a good job in your own company, or even using investors' enthusiasm for investment, excellent enterprises should have very good moral character.
It should be a prudent actor. In the case of such enterprises being over-recognized by the market, they should convey to the market a relatively cautious view of the company's operation and future, rather than misleading investors. At the same time, they are activists and tend to do much better than they say.
In addition to insisting on choosing excellent companies, we must also insist on buying at a reasonable price and insist on maximizing long-term value.
While adhering to the above principles, Lin Peng is also thinking about how investment should adapt to the changes of the times.
"In the context of the new era, we need to be more sensitive to macro factors such as international politics and domestic industrial policies. We must not only look at the development of some industries and companies from the perspective of efficiency, but also take into account the concept of fairness. In the face of extremely differentiated markets, it is also necessary to balance and take the initiative to take some risks. Investment can not be 'only low price-earnings ratio theory', but still adhere to the valuation. Lin Peng pointed out.
"Smart" will be the main value part of new energy vehicles
In Lin Peng's eyes, manufacturing will be a very important fulcrum of China's economy. He also focused on the analysis of the new energy vehicle industry, and unlike the mainstream focus of the market on the direction of electric, Lin Peng believes that "intelligence" is the main value part of the new energy vehicle industry in the future.
"In the process of improving the efficiency of China's manufacturing industry and upgrading the industry, consumer electronics represented by mobile phones clearly reflect the whole process of upgrading, which will have good reference significance for future investment in the new energy vehicle industry." In the process of studying the industry, we first trace the past, look for the laws of the past, and make deductions based on the laws, as well as reasonable business logic and industrial laws, and make deductions on another industry. Lin Peng said.
Looking forward to the future, how to look at the new energy vehicle industry through the mobile phone industry?
Mobile phones in the ninth year are called big brothers, and mobile phones are called mobile phones in English. It's mobile, but still phone. Before 2006, the era of Nokia, Samsung, and Motorola was formed, and the core was still the telephone, but it was smaller and more portable. From 2006 to 2010, smart phones began to appear, and the proportion of "telephone" in mobile phones gradually declined, and the concept of intelligence was increasing. Up to now, mobile phones are gradually intelligent and pc-oriented, and the functions of the phone itself are slowly fading.
"Who benefited from the evolution of mobile phones to smart phones? A number of companies have solved the problem of standardized chip production and design of mobile phones, and the semiconductor industry giants have been born; in addition, because of the standardization of mobile phone components, production standardization and functional standardization, a large number of foundries have been born. Lin Peng said.
Through comparison, Lin Peng believes that the future of the car will be dominated by intelligent devices, and intelligence other than electric will be the most important value part of new energy vehicles. "The current car battery, the future will not be like the current mobile phone display, although it is a very important cost component, but it has not brought investors a very large return." He also made a bold hypothesis.
Optimistic about the long-term prospects of Internet companies
The Hong Kong stock market has performed poorly this year, and the Chinese stocks represented by the Internet have recently suffered a sharp adjustment. Although the policy is not friendly in the short term, Lin Peng is still optimistic about the long-term prospects of excellent Internet companies.
"The valuation of Internet companies in Hong Kong stocks is almost at an all-time low. Because of antitrust, some companies have deliberately slowed down the growth rate of performance, using part of the profit growth for long-term investment. But such investment is valuable for the long-term development of the enterprise, and I think it should not affect the valuation too much. Lin Peng said.
In his view, the role of Internet giants in society is irreplaceable, and they are also actively working to promote fair distribution in society. Whether culturally or commercially, these companies have taken on the heavy responsibility of China's highest quality enterprises going to sea, gaining international influence while also gaining a leading position in the competition of science and technology.
Excellent Internet enterprises stand out from the market-oriented competition and have clear contributions to the country and society. From the perspective of the company's own business model, means of competition and the products and services it provides, it also meets the needs of the vast majority of the people. Because of this, Lin Peng is optimistic about the long-term development of such enterprises.
Harmony's investment philosophy encompasses "non-consensus correctness". Lin Peng said that Harmony Huiyi will insist on finding places that are different from market perceptions, and be cautious about the over-concentrated views or investment behaviors of the market, but also actively listen to the voice of the market. Companies will invest based on their own values and investment methods, investment philosophy.
"Sometimes we look a little longer than others, and sometimes we challenge the mainstream view of some markets. But I think we are still very hard-working, diligent, based on art, based on science, to do a good job of investment, and strive to create a very good return on investment for investors. He said finally.
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