Ma Manran: This year, we focused on bottom-hunting pharmaceutical leaders that fell below the liquidation price

At present, the valuations of many excellent companies are not expensive. The performance growth rate of some photovoltaic leaders and lithium resource leaders is often dozens or hundreds of percentage points, and the corresponding price-earnings ratio is ten times. How can you say that it is expensive? Even if they consider that they are in a business cycle and their future performance will no longer grow, this valuation is not expensive. In particular, some of the leading pharmaceutical brands that we are focusing on buying the bottom of this year have high fundamental performance growth rates, but the price-earnings ratio is only a few times, which is simply giving money. We have nothing to worry about. It doesn’t matter if the stock price rises in the short term. Buy more.

We invest in consumption for a long time, liquor and brand Chinese medicine, these two industries actually have great similarities. From the perspective of enterprises, whether it is traditional Chinese medicine or liquor, it is the carrier of Chinese traditional culture and traditional consumption habits. At the same time, many of their products are exclusive and are a unique business. Brand Chinese medicine is not a competition issue. The issue of Chinese medicine is whether the demand of the market you are in can continue to expand and your products can be accepted by more people.

Now Chinese medicine is indeed a long-term undervalued opportunity similar to that of baijiu in 2014 and 2015. Now that we are engaged in such a leading company, we have also engaged in some Chinese medicines in Hong Kong stocks this year, because it is too cheap. It is said that bank stocks have fallen below their net assets, and the bank stock market earnings ratio is only 5 times or 6 times, and they feel that bank stocks are cheap. Why do I want to invest 5 or 6 times in bank stocks? Some of the Chinese medicine stocks in Hong Kong stocks I have invested in this year have a price-earnings ratio of 5 times and a price-to-book ratio of only 0.4 times. For example, the XX series are among the top pharmaceutical state-owned enterprises in China. If they cannot go out of business, how can they go out of business? It is not that this industry has disappeared in China, and it will not disappear. Its assets, any asset picked out at random, are lower than its market value at the time. This is an absolute underestimate. As long as it doesn’t go bankrupt, with a price-to-book ratio of 0.4 times, it can’t lose money, so how can it lose money? So, this is also a low-risk arbitrage. The assets are there, the brand is there, the industry is there, but the stock price is so low, isn’t it just an arbitrage opportunity for you? To put it bluntly, it is to buy a bankrupt company at a bankruptcy price. With a price-to-book ratio of 0.4 times, the assets of the listed company held by it are equivalent to twice the market value of the parent company, not to mention other unlisted assets. From this perspective, you are buying a non-bankrupt business at a bankruptcy price.


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