Ding Feng original | Tian Chao: Mid-term 2017 shock optimistic about the four major categories
Ding Feng, Deputy Director of Asset Investment, and Tian Chao, a fund manager, recently visited the “Golden Axe Private Beverage Breakfast Meeting” and shared the 2017 investment strategy from the perspective of market cycles.
Tian Chao believes that from the fourth quarter of this year, the bottom of the market has slowly formed. According to a history of the A shares over the past 20 years, the CBBCs generally converted to a 8-10 year cycle with a period of 5-6 years of shocks.
There will be a hype cycle from the shock market to the bull market. What is the path for this cycle? What is the main investment strategy adopted by Ding Feng in 2017? Here, we share Tian Chao’s views on this and the introduction of Ding Feng’s asset research system to readers.
Why are you concerned about the CBBC cycle?
Hello, everyone, I am very honored and pleased to use the Golden Axe platform to report to you on the judgment of my Ding Feng assets on the development of the entire capital market in the next stage and some viewpoints.
First, introduce myself briefly. I am Tian Chao of Ding Feng's assets. I have been in personal business for eight years, entered the stock market in 2009, joined the assets of Ding Feng in 2010, and spent seven years in Dingfeng's assets.
Share with you some of our views on the market cycle. Since May of last year, the stocks have hit 1.0, the stock has hit 2.0, and the stock has hit 3.0, and have experienced thousands of shares of the daily limit. The state should be familiar to everyone and investors should still be aware of it. At that time, the national team used 2 trillion yuan to save the market. After that, the stock index oscillated slowly. From the fourth quarter of this year, the Shanghai Composite Index actually stood at 3,200 points. It can be said that the bottom has already been formed.
I would like to share with you some views on the market cycle. Judging from historical experience, in the past 20 years or more, A-shares have generally formed a complete CBBC cycle from 8 to 10 years, accounting for about 5 to 6 years of continuous oscillation, and 1 to 2 years of bear market. , it may be a bull market in 2 to 3 years. From the shock market to the entire bull market cycle, basically, along the way, for example, first to increase performance growth, the next step to speculate on second-tier transformation and growth of the company, and then the next step may be small-cap stocks, including shell companies, with the gradual increase in market preferences, The bullish atmosphere slowly emerged and incremental funds may be admitted. At this time, the market will pay attention to some big stocks, and then to the peak stage of the bull market, the low price of junk stocks will become the focus of the market. In the end, there was a crash, and the whole was such a reincarnation. About 8 years will form a complete bull and bear cycle.
Why do we pay so much attention to the CBBC cycle and the rules of the market operation? Because in different market stages, different risk appetite markets, the impact of listed company's profits and valuation on different stages of assets is completely different.
If we say that in the early stages of the bull market, in the middle and later stages of the shock market, the proportion of profit weight will have a crucial impact on the price of the stock. In the middle and late stages of a bull market, for example, with increasing market preferences, incremental valuations will become an important factor in boosting stock prices and driving stock prices. Therefore, we found that in the middle and late stages of the bull market, everyone’s money was basically brought to us by the market. All of them were valuations. At this time, the bull stocks showed up and the whole cycle would form a “double-click on Davis”. It is the growth of profits and the increase in valuation. The superposition of 10 times shares and 20 times shares will appear at this time.
Judging from the current characteristics of this stage of the market, I think there are four aspects that can make a simple inference, that is, entering the middle stage of the shock market in the future.
The first factor is that the market is still concerned about risks. There are some cases where listed companies' profits do not reach expectations, and the relative impact on stock prices is still relatively large, including the reduction of holdings of large companies such as some companies before. The influence of this company's stock is still quite large.
The second point is that the market's recognition of stories and speculative themes is not as high as that of the previous bull market. Therefore, the current stage of this stage is characterized by the fact that the market is characterized by hot spots and scattered. Every topic has a short period of time.
The third is that the micro structure of the market is not particularly good. There are some investors who make absolute returns. After the stock price is high, he will throw out a band and the resultant market force is not so strong.
The fourth point is the transformation of enterprises. Now the market's ability to transform the enterprise and the transformation can eventually form an effect, with skepticism, not as long as the company had a direction of transformation before, this stock has a very clear performance.
Now the market has entered an obvious mid-term feature of the shock market. Why is our Ding Feng so concerned about the market cycle? Because we do growth stocks, although the growth stocks are a long-term growth in the medium term, from the perspective of the different evolutionary environment of the market cycle in the short to medium term, the growth stocks perform in different risk appetite markets. The weight of growth is not the same. Then we can better grasp these factors and can give different strategies to match in different market environments. This is also the basis for our growth stocks to continue to generate revenue for customers in the long term.
Why do you say that the year is the middle of the shock market?
The second point, I would like to share with you, that is why we think that 2017 is the middle of the shock market.
In the middle period of the shock market, we think it may be somewhat similar to the market environment in 2012. In the 2012 market, experienced friends should have some impressions. First of all, the GEM has experienced a sharp decline in 2011, and in 2012 it entered a process of valuation digestion and sourcing. At this time, the performance of the Shanghai Stock Exchange Index on the Main Board was relatively flat. It was mainly reflected in the game of stock funds and no incremental funds. At this time, there were a number of companies that had a very good performance and a good business climate. For example, some advertising companies, such as the consumer electronics apple industry chain in 2012, the second-tier and third-tier liquor, and the GEM media segment, have experienced substantial growth and performance growth. I recall that the growth rate should be more than 70% for a group of companies. They are ahead of the market and so have a good performance in 2012.
For 2017, we feel that there are some similarities with 2012, so we give ourselves the strategy to dilute the transaction and focus on the selective operation of stock selection.
Let's talk about the motherboard and the GEM. We feel that the possible pressure on the GEM in 2017 is relatively large. There are several reasons for this.
The first reason is that from the market value point of view, more than 50 billion GEM companies, from the current situation, there is a general logic of some fundamental flaws, which will directly cause the growth of GEM leading stocks weak.
The second point is that such companies in the market value range of 20 billion to 50 billion yuan, mainly in the GEM, are some large entertainment industries, including film and television media, games, etc. These companies are mainly concentrated in the market value range of 20 to 50 billion yuan. Previously, we have done in-depth research. We use the mobile games and page travel industries as examples. Tencent and NetEase, the giants listed overseas, accounted for 50% of the profits of the entire game industry. They have already obtained the entire industry. The 50% profit, whether it is the channel, whether it is CP R&D. In addition, there are 30,000 companies, and then go for another 50% of profits, so this industry may be the emergence of 1 to 2 billion in market value of the company, but the existing billions of video and video game companies, the entire Industry space is not enough to support this volume, so the pressure is relatively large. Another point is that after the tide of mergers and acquisitions in the entire capital market from 2013 to 2015, after 2016, the entire market has been lifted for three years, and the pressure on the impairment of goodwill of these companies is relatively large, so it has become a repression. The core elements of the entire GEM.
The third point is the small market capitalization company of ChiNext. Now, from the point of view of net profit, basically it is all in the hundreds of millions or even tens of millions, so from the perspective of valuation is very high, and now it has not been found that a leading plate or leading industry can replace the big entertainment industry and put the whole The GEM has pulled into a new environment of relatively high growth from the current sluggish growth stage, so we feel that the pressure on the GEM is relatively large next year.
Let's look at the main board and main board market. We think that if the main board market will have some relatively big opportunities next year, it may satisfy several conditions before relatively large opportunities may arise.
The first point is that from the top down, the top management has streamlined its governance, released obvious policy expectations, and released a lot of dividends and space for state-owned enterprise reforms. This is the first point.
The second point is also from top to bottom. Financial regulation gradually moves from regulation to relaxation. A series of systems are introduced throughout the capital market from issuance to trading to hedging, etc. to complete a series of systems to improve the capital market. Then new incremental funds can be introduced into the capital market. This is a very important prerequisite.
The third point, from the bottom up, through trial and error by some entity companies to innovate, these entity companies can drive the entire industry, the entire sector out of the dividends of a relatively good industrial cluster, only on this basis can there be some comparison The cattle sector and some cattle companies.
Therefore, from the perspective of the first half of this year, new energy vehicles have this potential, but new energy vehicles have relatively flat performance in the second half of the year due to delays in policy subsidies. Looking at whether PPP is now likely to become a new direction for the next phase to lead the entire industry cycle.
How to choose growth stocks?
I personally did a 9-year growth stock investment. I also summed up some experience and made a long-term comparison. I discovered some long-term bullish stocks and compared some of my experiences. I can share with you. We found that if one or two cattle stocks are found in a certain year, it is relatively speaking. If there is a luck ingredient, if some cattle stocks can be excavated every year or every three years, it must have some rules, certainly not just luck.
Through such a long period of investment research, I believe that companies that have been listed for 5 years before the peak of the bull market cycle will pay special attention. Why do you say so, for example, in 2007, in 2007, we all knew that it was a peak in the bull market. Many U.S. stocks, including many companies with higher growth, may be mostly listed companies from 2002 to 2005. The probability of these companies becoming bull stocks is significantly higher than that of companies listed in the past nine years. This round of bull markets is also the same. Like 2015, it is the culmination of a bull market. The probability of a company listed in 2010-2013 becoming a bull stock is obvious. More companies listed before 2007.
Why is there such a phenomenon? I think it is a 4 cycle superposition:
The first cycle is called the market cycle. From the bear market to the bull market, a valuation increase process has been carried out. A small company may have a small market value and grow into a large company. This is a market cycle.
The second cycle is the company's cycle. Compared to these companies listed within 3 years of the listing, the major shareholders include the actual controllers and get the funds. As the company's development has entered a new stage, their willingness to toss is very strong. The thirst for market value is also very strong, so they get the financial resources to do something, including transformation, including the development of new products, including the expansion of new product lines, including some capital operations.
The third cycle, I think, is a cycle of people's hearts. Why? Because after the listing of this company, the majority shareholder can lift the ban within 3 years, then the small shareholder can not lift the ban for a year. At the same time, if there is a process of escalating from a bull market like a bull market, then all the company’s employees will increase and decrease their market value. The growth of their own wealth will show a maximal manifestation. The people of these listed companies will also realize some of their own stocks through the capital market in order to realize some other arrangements on their wealth.
The fourth I think is a policy cycle, from a financial regulation to financial relaxation, to encouraging transformation and encouraging the entire process of mergers and acquisitions.
This four-cycle superposition will create a five-year cycle in the first five years of the bull market's just-listed company, which may be the embodiment of the most brilliant stage of his entire company life cycle.
What are we looking forward to in 2017?
What are we looking for in 2017? I can analyze it from two dimensions:
The first dimension is from the industry level. We mainly like four major categories:
The first category is called China's manufacturing industry. As we all know, the RMB exchange rate has recently basically broken through 6.9, and the continuous devaluation of the RMB exchange rate is a good time window for Chinese companies to acquire overseas leading companies. Based on this time window, there are now some listed companies that have already started to acquire some of the leading companies in the world. Typical examples include, for example, Ophelia’s acquisition of Sony’s ccm division directly into Apple’s camera supply system; Winner Electronics acquires kss, which is the world’s fourth-largest manufacturer of automotive safety production, and Hytera’s acquisition of UK’s private network giant, Seper, and many of these cases. Through these cases, we can see that it is now a very good time window for a Chinese company to go global. In this time window, many enterprising listed companies will seize the opportunity. I think the future development of China's manufacturing industry is very large. A trend.
The second trend is the increase in the penetration rate of e-commerce penetration in various fields. The e-commerce providers we use today are mainly concentrated in the entire fields of JD.com and Taobao. In the future, it may be possible to infiltrate into more subdivided areas such as medical and pharmaceutical products and food-like cosmetics. This trend is also quite obvious.
The third category is that we think of the transformation of the terminal and the upgrading of the terminal. The past five years have been the development of smart phones for the past five years. Smartphones have gradually moved from single digits of penetration to basically everyone has 1 or 2 smart phones. What is the potential to subvert the industry in the future? One is the VR of virtual reality, the other is the smart car. These two areas are the possibility of the existence of trillion market capitalization or trillion giant space giants.
The fourth is our application of cloud computing and big data and artificial intelligence in various fields. In fact, this year's speculative smart car is a place where artificial intelligence is the first force in the automotive field. In the future, artificial intelligence may have an important change in the development of human scientific and technological progress in various fields, including medical care, including in many professional fields. This is a general direction that we have sorted out from the perspective of an industry evolution.
After an in-depth study, we have two types of assets that are able to cross the CBBCs for a long period of time and beat the index for a long time. One type of asset is a super-growth stock. This is what we are good at. The other type is restructured stocks. Assets such as restructured stocks are relatively special under China's existing issuance system. Assets, for such assets, we also put it into our entire investment research system as an auxiliary strategy. For restructured stocks, most of us are concerned with the changes in equity at the shareholder level, and the company has a large willingness to restructure through public information. Go to filter and do portfolio investment. In the restructuring stocks, it is important to remember that you cannot make a desperate move. For the restructured stocks, we pay more attention to some companies with more willingness to change at the shareholder level and equity, and use this open information to filter and make a portfolio, and to realize the benefits through the combined investment.
From a macro perspective, doing growth stocks is actually a work of value discovery that we are doing. What we are actually doing is doing value arbitrage. This is a different path of value realization.
Ding Feng Investment Research System Support
Multi-product line development
We know that, like the stockholder Warren Buffett, he has 50 years of history and can continue to gain more than 20% of the revenue. Our Dingfeng assets are now 9 years old, and we also hope to continue to lengthen, for example, 20 years and 30 years. According to the concept of our company's investment, we believe that high-quality growth stocks and high-quality, super-growth companies can adapt to most market conditions with a certain trending strategy. Therefore, we decided to invest in certain industrial trends.
In the direction of investment, we are looking for industrial trends from the bottom up and looking for the leading companies in this industry from bottom to center. Through the mutual recognition between the industry and the company, our investment industry trend is bound to have a very A strong investment research system is used as a support, and we have formed a complete investment and research system from discovery to research to tracking and judgment. At the very beginning, it is how a monthly input mechanism can enter our exercise. To do in-depth research, how to closely track, and ultimately make judgments in making investment decisions.
We are actually doing 3 things. The first is to use our information strengths. The second is to use our analytical strengths. The third is to give play to our behavioral advantages. These three are superimposed and we have created our own “eaten The company classification of fish theory, basically some of the companies covered by us, some of the better companies we have excavated, can then be classified by our theory.
We also have a comprehensive system for companies with different market capitalization, different stages, and different phases of the company's life cycle, and the assessment is a comprehensive system. In short, the five billion market capitalization companies and 20 billion market capitalization companies and 50 billion market capitalization companies are concerned In the same way, a company with a market capitalization of 5 billion yuan may have management replacements and a new business breakthrough. It may have a relatively large elasticity of stock prices. To a company with a volume of 20 billion, we will focus on one of the expansion of the enterprise platform. Capacity, the cycle of profit release for future performance, for a company with a market value of 50 billion yuan, we will look at some of the possibilities of his international benchmarking, and its profit growth will certainly be discounted to the stock price elasticity.
Our system can be extended to two places. The first place can be extended to the top of the product line, so we are building our fixed-income product line, new three board product line, and PE level based on the entire investment research system. The product line of the market, our entire scale construction is created through the same core capabilities. For example, we can say that we have the ability to make flour, through the ability to continue to make buns, make Hanamaki, and make fritters. No matter what the product is, it is based on the core capabilities of our nuclear company.
The second extension is to create a very strong or complete team through our entire investment research system. We basically start from the first few people and now have nearly 30 investment research teams. The investment research team basically everyone's behavior patterns, thinking methods are built through our core investment research system. We have also formed a talent echelon, and we can continue to cultivate more outstanding talents and form a talent echelon. Therefore, I think that the development of private equity in the future, including private equity competition, is reflected on the surface. It is to create a stable compound interest income for customers. Behind the real is how we create a platform, how to establish a system, give incentives, and establish a talent echelon. These soft powers are the core of future private equity competition.
Thank you all for listening to me and sharing some of our views on the market and our Ding Feng's investment research system. Dingfeng is a company known for its growth stocks. We will continue to evolve our investment research system, evolve our investment research team, and believe that we will reward our customers with better performance.
Here I recommend a book for everyone, Dr. Wu Jun's "The Tide of Waves." I read this book many times, mainly about the history of the development of science and technology in the United States in the past century. I can clearly see every aspect of this book. The leader of a wave of market capitalization is basically stepping on the tide of a large industry trend at that time. Well, by reading this book, we can make everyone know clearly that the entire US century has experienced several rounds of waves. In this wave, which companies are the darlings of this wave, the growth of the stock of these companies has brought investors a hundredfold return. So this book I think is a book worth reading for everyone.