Cinda Australia and Asia Fund introduced a lot of external fund managers last year. It is no longer a company of Feng Mingyuan alone. I think it is necessary for me to pay attention to Cinda Australia and Asia Fund Company.
Why did you choose to read Zou Yun’s quarterly report? The main reason is that the last champion of the “Host Contest” a few years ago was Zou Yun, which is homophonic “lucky”.
Why write this essay? The main reason is that the counter-market thinking in his quarterly report can be used for investors’ reference, mainly in the consumption and new energy industries. (I haven’t taken a closer look at his holdings)
In the 2020 Quarterly Report , it was pointed out that the Fund did not focus on the allocation of the new energy industry, and the photovoltaic industry did not allocate mainly due to the failure of the risk assessment process . There are companies in the new energy vehicle industry chain that have strong competitiveness and face relatively long-term risks. Small, but the fund manager believes that there are more cost-effective options in terms of stage, so the Q4 allocation ratio of the new energy sector is not high.
In the Q2Q3 quarter of 2021, new energy has risen well, and he gave his thoughts in the third quarterly report of 2021 . He compared the new energy industry with LCD panels, and concluded that considering the opportunities for manufacturing transformation and upgrading and technological innovation, not only industry growth, policy orientation, and industry trends, but also strategic niches, industry competition patterns, and business models. (The implication is that new energy does not meet his investment standards, questioning whether it can bring shareholder value)
The fund manager is optimistic about the transformation and upgrading of China’s manufacturing industry, and also agrees with the long-term development of clean energy in the future, but must policy-supported industries and fast-growing industries be a good business that makes money in the long run? Let’s put aside concepts, themes and policies, and imagine how these companies make money, what are their upstream links (do they have bargaining power), what are their downstream links (do they have bargaining power), and what are their intermediate competitors (with a stable pattern) ), what new technology paths bring the threat of substitutes, who are the end customers, and what is the trend of long-term electricity prices as a public utility product in China? We do not deny that there are a small number of companies with a better competitive landscape and a higher level of technology, but for most companies, in the face of a business with low barriers, the demand blowout and higher than average levels The high profit margin may also be a disaster for companies in the industry. The explosion of demand forces everyone to enter the prisoner’s dilemma (whoever does not expand production and lose share, whoever can’t get financing, can’t make it through, so everyone knows that they are facing excess capacity. Risk, it is also necessary to expand production and grab share, which will eventually lead to no one making money). But these companies have also created value. They have achieved a rapid increase in the penetration rate of clean energy through production expansion, price reduction, and technological iteration. These companies have great social value, but social value and shareholder value are sometimes not equal. For example, the domestic LCD panel industry has created huge social value through long-term development (production expansion, price reduction, technology iteration), and both consumers and manufacturing have benefited from the positive externalities brought about by cost reductions, but After so many years of listing, what is your return on shareholder value, assuming that you are a long-term shareholder of the company? Regarding the LCD panel, did the previous industrial policy not support it? Wasn’t the industry growing fast before? Was the replacement of domestic LCD panels not considered an industry trend before? We consider opportunities for transformation and upgrading of the manufacturing industry and technological innovation, not only on industry growth, policy orientation, and industry trends, but also on strategic niches, industry competition patterns, and business models. Only in this way can we take into account social value and shareholder value.
He pays attention to the company’s business model and emphasizes high quality. In the whole year of 2021, the performance of the consumer industry is not good. In his quarterly report, he said that he has increased his positions in reverse. In the first quarter of 2022, he gave his thoughts on the consumer industry. .
At present, the market as a whole is relatively pessimistic about the consumer industry, and there is no confidence in the mitigation of the epidemic and steady growth. We divide consumption demand D into two dimensions: consumption ability A and consumption willingness B. We tentatively define consumption capacity as the number of people with a certain consumption capacity, and consumption willingness to temporarily define the consumption expenditure amount of a single person affected by macro expectations. We focus the market on the segmented consumer market of high-net-worth individuals. In the past 10-20 years, the number of people with specific spending power has been steadily increasing with the improvement of national strength. Even in the financial crisis in 2008 and real estate in 2014 Under extreme years such as inventory crisis, domestic deleveraging in 2018, overseas trade friction, and the new crown epidemic in 20-21, the expansion of domestic high-net-worth individuals still maintains a steady growth. We can also find similar cases in the private banking departments of other large banks. Data trend verification, we map this data trend to the dimension of consumption power of high net worth people, we are still full of confidence in the long-term domestic consumption upgrade and the consumption power of high net worth people (dimension A), that is to say, short-term consumption willingness (dimension B) The short-term impact of macro and external expectations is more volatile, leading to fluctuations in apparent consumer demand. We superimpose the two curves of A and B, and we can get a fluctuation curve that slopes upward to the right. The trend line that slopes upward to the right is determined by A, and the fluctuation is determined by B. By analogy with the first quarter of 2021, the market over-amplified factor A while ignoring factor B. We believe that it has now reached the other extreme, over-magnifying factor B and ignoring factor A. With this simplified model clear, we know what to stick to, what is right in the long run, and what are cycles and emotional factors.
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