Source: time Weekly author: Zhou Mengmei
In just two months, JPMorgan Chase & Co, a well-known investment bank, has made a big reversal in its attitude towards US-listed stocks.
JPMorgan Chase & Co released the latest research report on May 16, comprehensively raising the rating and target price of Chinese Internet companies. Its analysis believes that, driven by short-term and long-term fundamentals, the share price of the head Internet company may rise higher than expected. JPMorgan Chase & Co upgraded the stock ratings of Meituan (03690.HK), BABA (09988.Hong Kong BABA.NYSE), NetEase, Inc (09999.Hong Kong NTES.NASDAQ), Tencent (00700) and other high-tech Internet companies to "overweight".
Earlier, in mid-March, JPMorgan Chase & Co published a controversial research report, which downgraded the rating and selling price of US-listed stocks in large numbers. Since then, Meituan, Pinduoduo (PDD. NASDAQ), JD.com (09618.HK; JD.NASDAQ) and many other Chinese stocks hit bottom and rebounded, and their stock prices rebounded to varying degrees. From March 15 to May 17, Meituan's share price rose 54%, Pinduoduo's stock rose more than 48%, and JD.com 's share price rose more than 20%, according to Wind.
JPMorgan Chase & Co is to take out real gold and silver to add positions in Chinese Internet concept stocks.
Data show that as of the first quarter of this year, JPMorgan Chase & Co's flagship China fund "JPMorgan Funds-China Fund A (acc)-USD" increased its positions in JD.com, Tencent, as well as Meituan and JD.com. Among them, JD.com received a 12.54-fold increase in the fund, ranking the fourth largest, while Tencent and Meituan received a small increase of 3.38 per cent and 2.12 per cent, respectively.
JPMorgan Chase & Co is not the only one to increase the position, a number of international asset management giants have also copied the bottom of Chinese-listed stocks.
On May 13, a number of head investors disclosed their holdings in U. S. stocks as of the end of the first quarter of this year. Qiaoshui Fund, the world's largest hedge fund, launched a strong attack, increasing its positions in US-listed stocks, BABA, Pinduoduo, Baidu, Inc. (BIDU. NASDAQ) and other Internet companies have significantly increased their holdings.
According to 13F data platform Whalewisdom, in the first quarter of this year, the Qiaoshui Fund increased its holdings of BABA by 3.2122 million shares, an increase of 75%, the number of shares increased to 7.4805 million shares, and the market value of the position reached $814 million, ranking the sixth largest. Pinduoduo received an increase of 2.2775 million shares, an increase of 85%, and the number of shares increased to 4.9394 million shares, with a market value of $198 million. Baidu, Inc. increased his holdings by 376600 shares, or 50%, with a market capitalization of US $149 million.
Fidelity International, a global asset management giant, is also stepping in. According to position data disclosed by China consumption Power Fund, a Fidelity China equity fund, as of March 31, the first, sixth and tenth largest positions in China consumption Power Fund were Tencent, Meituan and JD.com, respectively, with a market capitalization of $402 million, $180 million and $138 million respectively at the end of the period. In the quarter, the China Consumer Power Fund's stake in Tencent, Meituan and JD.com increased by 4.26%, 20.27% and 10.22%, respectively.
Since the peak in 2021, US-listed stocks have not been bullish by the market, and the overall performance has continued to decline. Now, whether it is increasing positions or upgrading ratings, it shows that big international banks are re-examining Chinese stocks. At present, the international capital is bullish, increasing the position of Chinese stocks, and the signals of winter to spring appear.
"Global asset management giants have increased their positions in Chinese stocks, which first of all shows that these international asset management giants are still optimistic about Chinese assets, the Chinese economy and the future of China." Fu Lichun, an economist and founding partner of Yuntai Capital, said.
The policy side also continues to release positive results. The CPPCC National Committee held a special consultation on "promoting the sustained and healthy Development of the Digital economy" on May 17, emphasizing that the digital economy will continue to be stronger, better and bigger, so that it can better serve and integrate into the new development pattern, and promote high-quality development. Prior to this, the high-level meeting also proposed to promote the healthy development of the platform economy, complete the special rectification and reform of the platform economy, implement regular supervision, and introduce specific measures to support the standardized and healthy development of the platform economy.
Wang Hui, an international analyst at Zhejiang Merchants, pointed out that at present, the share prices of most Internet technology companies have long fallen into the value range, and even some company valuations have fallen to historical extremes. Andrew Mccaffrey, Fidelity's global chief investment officer, said valuations in the Chinese market would be more attractive perhaps thanks to further monetary and fiscal easing.
The attitude of the international market towards Chinese-listed stocks has improved, but the return trend of Chinese-listed stocks will continue.
As overseas companies, Chinese stocks can seek major listings (primary listing), dual major listings (dual primary listing) or secondary listings (secondary listing) on the Hong Kong main board and gem. For the return of Chinese stocks to Hong Kong stocks, it is mainly through the three paths of privatization and delisting, double listing and secondary listing. According to the Hong Kong Stock Exchange and Mande Information, at present, 27 Chinese-listed stocks have returned to Hong Kong stocks in different forms, including China Feihe Limited, Wuxi Apptec, E-House China, Sansheng Pharmaceutical and Letiao Games; 6 dual listings (BeiGene, Ltd., Li Auto Inc., etc.) and 16 secondary listings (BABA, JD.com, etc.).
Statistics from China International Capital Corporation's research report show that 42 companies are expected to meet the conditions for returning to Hong Kong stocks in the next 3-5 years. China International Capital Corporation also estimated that if secondary listed companies are allowed to be included in the Hong Kong Stock Connect in the future, it may theoretically bring a potential capital inflow of about HK $45 billion to 16 secondary listed companies.