Financial Services Association, July 19 (Reporter Wu Yuqi) Self-purchased 8 times during the year, and I have to say that the private equity Hainan Shiva set a record for high-frequency self-purchases.

The latest subscription was on July 19. Hainan Shiva issued an announcement stating that the company's Shiva Maverick Series and Shiva Alchemy Series fund managers and their immediate family members used their own funds to purchase a total share of 5.2 million yuan of Shiva Mavericks series and Shiva Alchemy series fund products. On July 17, Hainan Hiva only issued a self-purchase announcement to purchase the Shiva Mavericks Series and Shiva Alchemy Series funds with 8.5 million yuan of its own capital.

Self-purchase announcements are posted twice a week, creating a buzz in the market. “Basically, I buy my own as soon as I have free money.” A relevant person confessed to the Financial Federation reporter.

A CFA reporter also noticed that CNOOC, the largest stock in Hainan Shiva products, fell 4.87% today, with a cumulative decline of more than 10% this week. The market also ridiculed this, “As soon as Liang Hong increased his position, it plummeted.”

Despite this, the relevant person mentioned above also told reporters, “The market is panicking, investors are panicking; Hainan Shiva and Liang Hong are not panicking.” Liang Hong's recent remarks also supported this view, showing his calm attitude and firm confidence in the face of market fluctuations. He said, “Having an excellent company for a long time has been the best for me since I entered the market for 20 years, and it is also the best investment strategy in my opinion. But how difficult are excellent and long-term keywords. Great companies are hard to find, and how difficult is it to keep them for a long time.”

“Although it has risen a lot, it can still be held within the value range, and major stock price adjustments can still be held. Many people have gone up too much and can't hold it; there are also many people who have fallen too much and can't hold it. To be able to hold it for a long time is to be pampered without being surprised and hold it firmly. I have always tried to own an excellent company for a long time, even though there is a lot of noise, even though there is a lot of distrust or disdain everywhere. But I still only stick to what's right.”

Purchased eight times during the year

In addition to the two self-purchases mentioned above, Hainan Shiva issued self-purchase announcements on January 22, January 31, May 17, June 21, June 27, and July 11, respectively. During the year, Hainan Shiva has purchased eight times, and the cumulative amount has exceeded 60 million yuan.

Specifically, with the exception of the self-purchase announcement issued on January 31 where Hainan Shiva's affiliate Shanghai Shiva used its own funds to purchase the company's private equity products, the fund manager made his own purchases, including Liang Hong himself. A relevant source said, “This also shows Liang Hong's optimism about the future market.”

According to the official website of the China Securities Investment Fund Industry Association, Hainan Shiva was founded on December 25, 2014, with a fund management scale of more than 10 billion yuan. The business type is private equity investment funds and private equity investment FOF (funds in funds) funds. The actual controller is Liang Hong.

In addition to Hainan Hiva, a number of private equity firms have purchased their own products during the year. According to the data, as of July 19, 8 private equity institutions had issued a total of 18 self-purchase announcements during the year, with a cumulative self-purchase amount of nearly 0.5 billion yuan. The 10 billion private equity fund also has evolutionist assets. The agency announced self-purchases 3 times during the year, on January 26, March 1, and March 29, respectively. The cumulative amount of self-purchase amounts reached 50 million yuan. Magic Square also announced on February 6 that it will use 0.25 billion yuan of its own capital to purchase the company's products.

Hong Kong stocks account for up to 80% of positions

In the first half of the year, Hainan Shiva finished runner-up in 10 billion private equity for half a year with a performance of 29.37%. The performance in June of this year also reached a record high. Since showing results in April 2015, the private equity's annualized yield has exceeded 26%.

Judging from the positions in the monthly report, as of the end of June, Hainan Shiva products accounted for the vast majority of stock positions in terms of major asset classes. At over 95%, options and cash accounted for relatively few, 4% and 0.9%, respectively. In terms of stock market distribution, Hainan Shiva's main battleground is Hong Kong stocks, accounting for more than 80%. US stocks account for about 16%, and A-shares account for only 2.1%.

Looking at the market value of the stock industry, Hainan Shiva's products account for more than 50% of the petroleum and petrochemical industry, trade and retail sales account for more than 10%, and the utilities, social services, communications, non-ferrous metals, coal, real estate, media and other industries all hold positions. The relevant person mentioned above said, “Basically, one industry holds one vote.”

Regarding the reason for not disclosing specific individual stocks, he also said, “Many investors will pay close attention to the fund's holdings and often worry about whether certain stocks are about to fall or whether there are potential risks. However, I think investors choose not only the fund manager's current shareholding portfolio, but more importantly, evaluate whether the fund manager's investment strategy is consistent and effective. Once investors understand this, they won't be anxious about short-term market fluctuations.”

Pessimistic expectations are fully interpreted, and there are good reasons to remain optimistic

In the latest monthly report, Hainan Shiva and Liang Hong not only conducted an in-depth review and analysis of market performance in June, but also proposed future market trends.

Hainan Shiva said that the June market continued the adjustment trend at the end of last month. At the end of the month, the Shanghai index fell below the 3,000 mark, and the overall market showed significant structural differentiation. The positive correlation between market capitalization size and stock performance is becoming more and more obvious. In particular, the implementation of the “one yuan delisting” rule has brought about a massive avalanche of low-priced stocks.

Hainan Shiva pointed out that the product yield in the first half of the year was around 30%, mainly benefiting from heavy holdings in petroleum, petrochemical and utility stocks. At the other end of the dumbbell position strategy, hotel stocks were constrained by a weak macroeconomy, but their own alpha was very strong. Looking at half a year, they still received positive returns, far exceeding the performance of similar companies in the industry. Among heavy stocks, the only ones that recorded negative returns for half a year were e-commerce stocks. The decline mainly came from the last week of June. Part of the reason was that Amazon launched a low price channel, and financial concerns posed a major threat to other e-commerce businesses.

The market's further adjustments since late May certainly highlight the market's pessimistic expectations for economic recovery, but at a time when it has been falling continuously for three years and valuations are at the bottom of history, it is still somewhat out of place.

In recent years, Hainan Shiwa has responded to market changes with a dumbbell-shaped holding structure. On the one hand, it has stabilized its net worth through high-certainty upstream resource stocks, and on the other hand, it has stuck to some highly competitive consumer companies. Although this part of the position puts some pressure on stock prices when economic expectations are pessimistic, it also allows the entire portfolio to calmly respond to market changes in a relatively balanced state. In the current market environment, they will also be more active in searching for high-quality companies that have been drastically mistaken as reserves, and will dare to lay out ahead of schedule at the right time.

Looking ahead to the second half of the year, Hainan Shiva will maintain its previous view. The economy will gradually decline and stabilize. The intensive real estate relaxation policy introduced earlier has already begun to show some results. Real estate sales picked up in June, although sustainability remains to be seen. And as the Federal Reserve's austerity monetary policy comes to an end, the domestic and foreign funding environment is also expected to improve. All in all, pessimistic expectations have been fully interpreted. The market is still undervalued. There are good reasons to remain optimistic and have positive expectations for the market's medium- to long-term performance.