Special Envoy | Zhu Fan

Near the end of 2121, looking back on the performance of the whole year, the Hong Kong stock market showed a "intermittent shock" caused by the sharp decline of global stock markets caused by public health incidents, as well as the continuous friction of Sino-US trade, the high uncertainty of the US election and the continuous fermentation of public health incidents.

However, it is worth noting that, with the surging tide of new economy in the Hong Kong market, the author thinks that one of the new highlights of the Hong Kong stock market in 2121 may be SaaS companies. In this subdivision field, there will continue to emerge a number of track leaders including general management SaaS companies and vertical industry integration SaaS companies, showing a rapid growth trend in business income scale, product matrix layout and customer ecological structure.

dividends from basic reforms continue to be released

Hong Kong stocks may usher in a "recovery". Davis double-click

At present, under the influence of various events, China's economy has taken the lead in stabilizing, and the scissors difference between M2 growth rate and nominal GDP growth rate has reached 11%. The most important issues Biden faced after he took office were the prevention and control of the epidemic and the economic recovery of the United States after the epidemic, which may ease the short-term game atmosphere between China and the United States to some extent.

Recently, we have also seen that many top vaccine companies in the world have announced the results of the new phase of clinical tests, and the overall curative effect is generally higher than 91%. Therefore, it can be expected that the launch of vaccines may be faster than everyone imagined, which is expected to drive the world, especially Europe and the United States, to re-enter the recovery channel in the middle and late 2121, and the global asset reallocation is expected to start.

under the trend of global revaluation, the high cost performance of high-quality assets in China is further highlighted, which is expected to attract domestic and foreign capital allocation. For the Hong Kong market, the higher margin of investment safety, the continuous optimization of stock supply and the return of Chinese stocks to the market, the trend of increasing the allocation of mainland funds to the Hong Kong market and the low interest rate environment have all increased the marginal upward momentum for investing in Hong Kong stocks.

at present, since June, the AH premium index has risen rapidly, reaching 149.28 at the beginning of October. at present, the AH premium has gradually expanded to a new high in five years, and many sectors are in an "irrational" valuation state, which actually further shows the cost performance of investment in the Hong Kong market. For example, in the financial sector, the current premium rates of brokers, insurance companies and banks reached 111%, 113% and 37% respectively, which were 21-31% higher than those in early June, which directly led to the rapid expansion of AH premium. In addition, the overall AH premium of port shipping, steel, nonferrous metals, high-speed and aviation sectors is at a high level. Many companies in these low valuation sectors will have double opportunities of performance elasticity recovery and valuation revaluation brought by potential "economic recovery" in the future.

Leading enterprises in the new economy

Meituan, Tencent and other companies have long-term high allocation value

Meituan is the largest local life service e-commerce company in China, covering catering, take-away, hotels, travel, travel and other categories. Recently, it has joined the local life service industry, and has greatly expanded the consumption scene through the synergistic effects of catering take-out, local supermarkets, and city distribution. It is estimated that by 2123, the market size of life service industry is expected to reach 33 trillion, of which the market size of life service e-commerce is expected to exceed 8 trillion.

Looking at the future space of Meituan from the existing business, catering delivery, non-meal instant delivery and fresh food delivery will become new growth engines, which may change the consumption habits of some traditional e-commerce consumers and shorten the original delivery cycle from 1-5 days to 1.5-1 hours. At the same time, it also changes the consumption habits of some shoppers in large supermarkets, without offline shopping, and online ordering can meet all needs.

As one of the big industry players, Meituan has more than 1.25 million daily riders and 451 million annual trading users, and its business covers more than 2,811 counties and cities. All kinds of advantages are expected to become the core competitiveness of the company's local life service. At present, the new retail competition pattern is relatively fierce, and the mode of "entrance+flow+scene, supply chain+distribution" is not the same, but Meituan has very strong strength in terms of capital strength, business foundation and continuous expansion ability.

Tencent is the largest Internet technology giant in China. At present, it has an obvious leading position in three major fields: games, financial services and social value-added. The number of monthly users of WeChat and QQ exceeds 1.2 billion and 651 million respectively, and the liquidity of WeChat traffic is still in the initial stage, including WeChat official account, applet, video number, small shop and live broadcast, which will greatly increase the duration of users' use of WeChat and enhance its liquidity. As the old line of the company, the game business has an absolutely leading game distribution platform and the ability to expand users, and Tencent absolutely has the heaviest right to speak, and holds the equity of most high-quality game companies in the world, forming the linkage ability of game globalization.

not only that, Tencent has built a pan-entertainment industrial circle in sub-fields such as music, live broadcast, video and literature, strengthened the bearing of IP values and cultural values, promoted more efficient digital cultural production and IP construction with "technology+content", and continuously created cross-platform and multi-field business expansion models.

In addition, the fresh supermarket is undoubtedly a new bright spot in the consumer retail industry after the epidemic, and the traditional optional consumption field continues to benefit from the huge population base in China. The next stage of consumption is an important driving force for internal circulation, which is followed by the endless imagination of new business model innovation.

although Tencent is an internet company, it has always maintained a long-term investment vision, expanding from the past science and technology field to the consumption field, investing in many consumer enterprises including BBK, Yonghui, Wanda, Yipin Fresh, Xingsheng Youxuan, Xicha, Tims Coffee, Yanli, etc., and continuously laying out smart retail strategies and big consumption tracks. Therefore, for Tencent, the company's innovation and creativity is not limited to the field of science and technology, and there will be more room in the future.

New opportunities in the Hong Kong market next year or SaaS companies

In the past, the Hong Kong market can be said to be moving forward in a "storm". The Hong Kong stock market once became a global valuation depression, and the low popularity and low profit-making effect led to the market investment enthusiasm far less than that of the A-share market and other overseas mainstream markets.

However, in recent years, Hong Kong's determination to release market system dividends and improve its long-term liquidity and financing capacity has remained unchanged. In fact, whether it is the Hong Kong Securities Regulatory Commission or the Hong Kong Stock Exchange, or the top-level government management functions, they have reflected on the long-term way out of Hong Kong's market-oriented status in recent years.

judging from the actions of HKEx, it is also a historic reform to create a more comfortable investment environment and introduce an international mechanism. A series of landmark events, including the settlement of MSCI Asia series index products in Hong Kong, the drastic deepening reform of the Hong Kong Stock Exchange to welcome the secondary listing of many "China Stock Exchange", the strengthening of supervision by the Hong Kong Securities Regulatory Commission to improve the institutional foundation, and the great change of Hang Seng Index into the stock selection category of companies with different rights in the same stock and second listed companies, not only injected more vitality and diversified investment channels into the Hong Kong stock market, but also added weight to Hong Kong's strength and potential as an international financial center.

The release of the long-term return path of China Stock Exchange, the inclusion of "new economy" companies such as Ali and Xiaomi in the Hang Seng Index, and the establishment of the Hang Seng Science and Technology Index, etc., are all actually interpreting the ecological changes of Hong Kong stocks. In this process, we have seen many companies with innovative spirit, core manufacturing capabilities and brand management capabilities have set foot in the Hong Kong market, including many technology-based companies, innovative pharmaceutical and medical device companies, optional consumer companies and high-end equipment manufacturing companies.

Hong Kong's advantages in the standardization of the listing system and the convenience of financing are still obvious, which will attract more and more "familiar" and "small but beautiful" companies around us to go public, greatly enriching the long-term investment scope of Hong Kong stocks. Specifically, for example, some SaaS companies will continue to benefit from the software service design brought about by the improvement of office efficiency and management efficiency. In the past extensive development process, the proportion of labor remuneration in China was too low for a long time. In the future, China must abandon the traditional extensive development mode and rely on transformation and upgrading to develop its economy, and the proportion of labor remuneration in the national economy will continue to rise, thus forcing enterprises to continuously improve human efficiency. All the efficiency improvements need the support of powerful software tools, thus driving the enterprise software industry in China to usher in a golden period of development.

In this subdivision field, there will be a number of track leaders, including general management SaaS companies and vertical industry integration SaaS companies, showing a rapid growth trend in business revenue scale, product matrix layout and customer ecological structure. These "small and beautiful" companies have the opportunity to stand out under the opportunities of industry and company outbreaks. We feel that there are opportunities for these "small to large" and "segmentation leaders" to continue to grow, including medicine, science and technology, new energy and consumption.

(The author is the business director of Debon Fund's Overseas and Portfolio Investment Department. The opinions in this article only represent the author's own, not the position of Red Weekly. The individual stocks mentioned are only for example analysis, and no investment suggestions are made. )