In addition to the buzz of chips over the weekend, there was a black swan event in Haitian Flavor Industry and China CDFG today. Let’s sort out the risks and opportunities today.
Before we start, let me explain that the content of recent articles seems to be quite messy, covering consumption, medical care, new energy, semiconductors, and China Internet. But in fact, the main lines of my article are four: consumption, medicine, technology, and broad-based index . Technology is new energy, semiconductors, and China Interconnection. The broad-based index mainly focuses on the U.S. stock index. Joint configuration, in multiple excellent industries, diversify risks and obtain excess returns. These few industries are the ones with the least risk, the most attractive rewards, and the brightest prospects, which is why I pay attention.
Among them, the certainty of consumption is even greater than that of technology. Consumption is actually eating, drinking, drinking and using, and new energy has a long industrial chain, chips are more professional, and medicine also needs to understand medical knowledge. Therefore, the investment difficulty of consumption is lower. My dad is full of consumer ETFs and funds, so he killed the CSI 300’s rate of return in his investment career.
Moreover, old fans must know that although I don’t write much, I continue to pay attention.
(I am working overtime on weekends, I will reply to comments on other posts when I go back in the evening)
black swan event
Haitian Flavor Industry: The leading condiment, Haitian soy sauce and oyster sauce are probably the most famous, right? I have been using it at my house. What happened is: Haitian employees made improper and wrong remarks, which led to the closure of Haitian Flavor’s social platform account and an apology.
China CDFG: CDFG’s main business is tourism retail in Hainan, selling some duty-free perfumes, cosmetics, brand-name tobacco and alcohol and other consumer goods. What happened: Baidu search for “Hainan”. This will cause CDFG’s duty-free shops to be unable to operate normally.
configuration opportunities
We don’t know how the market will react to these black swans. However, if there is a panic-style crash, you can allocate outstanding stocks, ETFs and funds in the consumer industry.
Consumption recovery is a necessary part of economic recovery. We all know that we are now in a stage of steady growth, and one of the manifestations of economic stability and improvement is the recovery of consumption. The economic recovery will also bring moderate inflation, and consumer goods can rise in price to fight inflation. This is the first logic of consumption.
The second logic is that consumption, like medicine, benefits from my country’s demographic dividend. Its own population base, superimposed that people are getting richer and richer, then consumption will increase. Therefore, consumption has always been the backbone of A shares. According to my statistics, CSI consumption is similar to the S&P 500 index of US stocks. CSI wine is similar to the Nasdaq.
Further, the consumption recovery brought about by the economic recovery can mainly focus on optional consumption rather than mandatory consumption. Because the latter has to eat and drink no matter how the economy is, its performance will not fluctuate greatly. But if the economy recovers, there will be incremental demand for those optional consumptions, such as drinking alcohol, traveling to Hainan Island, and purchasing new home appliances.
Another is to pay attention to high-end consumption. China’s high-net-worth population is growing rapidly. This group of people has strong spending power and is polarized. Examples of high-end consumption are baijiu, Casarte from Haier Zhijia, a leader in home appliances, and luxury goods sold by China Free Shipping.
Conversely, that is low-end consumption, such as Meituan Takeaway. I hold a neutral attitude.
Cars are also a type of consumption, which has been shown before, and everyone can see the importance of stimulating consumption to the economy.
Why didn’t I tell you about the configuration before? Because there have been too many rebounds before, the valuation is a bit high, at least compared to the absolute undervaluation of medical care, the opportunity is much less.
Details in the next chapter.
Why do I rarely talk about consumption and focus on medicine?
Drinking and taking medicine is the magic weapon for A shares. Whether you’re doing ETFs or individual stocks, choosing the right industry is especially important.
First, the valuation of consumption is higher than that of medicine. The valuation percentile of CSI Medical is less than 1%, which is seriously underestimated. The valuation of liquor is above the middle, and the consumption is low, and it is not yet undervalued.
Second, there is nothing to talk about in consumption. The strongest thing in consumption is liquor, and Zhang Kun can’t beat the liquor ETF. Not much to analyze. There are many subdivisions in medicine, and research can make excess returns.
If consumption can take the opportunity to adjust, then compared to medicine, consumption does not have the risk of R&D and centralized procurement, which is attractive to a certain extent.
target of attention
Liquor ETF/China Merchants China Securities Liquor: Zhang Kun can’t run, I would like to call it the Nasdaq of A shares. The advantage is that there is no better business model for A-shares than Baijiu. The disadvantage is inventory risk and expensive valuation. For a detailed analysis, see the following historical articles: web link
(Shenzhen) Consumer ETFs: Broad-based consumer ETFs, but mainly drink and eat meat. Eating meat is a pork farming company.
Leading consumer ETF: a broader-based consumer sector ETF, not only drinking and eating meat, but also travel (China Duty Free), automobiles, etc.
Animal husbandry ETF: pork ETF, note that a large part of my country’s consumer price index CPI is pork, so pork has a large weight in consumption. In addition to the logic of consumption I mentioned earlier, pork also has the nature of a cyclical stock of pig cycle reversal. For a detailed analysis, see the following historical articles: web link
Home appliances: You can pay attention to high-end brands and small home appliances, high-end brands to Haier Smart Home, and small home appliances to sweeping robots, but ETFs are not recommended. The logic of high-end consumption has been mentioned before. Small household appliances are not tied to real estate, and the overseas business has grown rapidly. Moreover, the bulk commodities have fallen a lot recently. The prices of copper and aluminum, the raw materials of small household appliances, have fallen, reducing the cost. ETFs are not recommended because some individual stocks of home appliances are too deeply tied to real estate, and you know what happened to real estate.
Active fund selection criteria: If you choose an active fund, a very important criterion is whether it can outperform the CSI Wine Index and the CSI Consumer Index. Fund size should not be too large, less than 5 billion is the best. Then if fund managers can choose CDFG and Haier Zhijia, that would be great. Because I have also bought and done bands. This is probably something old friends remember:
Haier Zhijia, that is my lost youth. ![[可怜]](http://js.xueqiu.com/ugc/images/face/emoji_27_poor.png "[Pitiful]"){kind=small}
buy some
This is a technical analysis problem. I use wine ETF/China Securities Wine as an example, and other targets can follow the same method.
That’s pretty much the two support levels. Can do some grid trading/buy as it goes down. The consumption in this position is as attractive as the 10,000-point CSI Medical. Buy it when it falls! Buy it when it falls! Buy it when it falls! Keep yourself a safety pad!
$ Haitian Flavor Industry (SH603288)$ $ China CDF (SH601888)$ $ China Merchants China Securities Liquor Index (F161725)$ @Today’s Topic @Snowball Creator Center
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