Source: Brokerage China Author: Qu Hongyan Recently, China Yangtze Power hit a historical high and once again showed the slow bull stock trend of "tripling in ten years". The slow bull market has left behind many passers-by and brought good returns to the steadfast investors. It is "rare for those who triple in one year to be like carp jumping over the dragon gate, while those who double in three years are few and far between." On the other end of the investment world, however, violent collapses are also deafening, with many financial products suspected of "Ponzi schemes" ceasing payments, leaving investors with no hope of recovering their investments. Both positive and negative cases illustrate the importance of forming a suitable mentality towards money in one's lifetime; otherwise, sooner or later, you will divorce yourself from your money. "I call this the money mind, a person's IQ can reach 120, 140, or even higher levels, and perhaps some people's minds are good at doing one thing, while others are good at doing another. They can do things that most ordinary people can't do. But I know some very smart people who make very foolish decisions because they lack the money mind." Buffett once said so. The so-called money mind refers to believing in common sense, believing in compound interest, being cautious and rational, thinking independently, prioritizing security over return, not dealing with people with questionable character, not easily guaranteeing for others, not believing in windfall profits, and not trying to cross legal norms for extra benefits. In today's world of ubiquitous information, everyone's wealth may become the "prey" of those with ulterior motives. Only with the money mind, can one form good behavior habits and shield oneself from separating from one's wealth. Do not entrust your wealth easily. Wealth is easy to lose but hard to accumulate, and trust is a vital reason leading to the rapid loss of wealth. "Do not allow anyone else to manage your business unless you can watch their every move closely and understand their behavior; or you have strong reasons to believe in their character and ability. For investors, this criterion determines when you can let someone else make investment decisions for you." Graham's criterion written eighty years ago is so clear. Almost all the investors who lost their wealth in the financial products have violated the above two criteria. They did not have the ability to closely supervise the whereabouts of their funds, nor did they have sufficient reasons to believe in the character of the product issuers. They easily invested their own wealth solely based on others' glib tongue and a piece of commitment paper. They did not act as gatekeepers of their own wealth and ended up with nothing left even if the government punished the wrongdoers. "An ounce of prevention is worth a pound of cure." This is a phrase Munger often says. Destiny must be in one's own hands, and investors with a suitable money mind will try their best to find suspicious points in their investments to protect the safety of their principal. For example, whether the manager is trustworthy, whether the underlying assets are profitable, whether oneself can timely monitor the risks in the investment process, and whether the sales staff is obtaining large commissions. As long as any unreliable signs are found, these investors firmly will not invest their money. Do not desire to get rich quick. As in the capital market and anywhere else, making money is not easy, and desiring to get rich quick will lead to quick loss of wealth. In the capital market, the desire to get rich quickly often leads to investors over-allocating specific stocks, industries, or assets at the worst time. For example, buying high-risk stocks that can gain huge returns once an adventure succeeds, but the chance of success is very small, also known as "whispering stocks" by legendary fund manager Peter Lynch. "They often tell investors a story with explosive effects. These 'whispering stocks' have a hypnotic effect on people, and it is easy for you to believe that the story the company tells has an emotional appeal that can easily confuse you." This is like hearing a very tempting "sizzling" sound, making you salivate, but you did not notice that there is no steak on the grill. In the eyes of investors who lack the money mind, stable yield provided by blue chips such as China Yangtze Power cannot meet their demands. However, historical experience clearly shows that buying stocks lacking in safety solely based on imagined high yields is unwise. The long-term average investment return of general stocks is 9%-10%, which is also the average investment return of stock indexes in history, a benchmark to measure one's investment performance and the benchmark to measure fund investment performance.
Author: Shi Qian

Overnight, Tencent's ADR listed in the USA $Tencent (TCEHY.US)$ fell over 7%. This morning, the Hong Kong stock market $TENCENT (00700.HK)$ opened down 7%, reported at 380.6 Hong Kong dollars.

The U.S. Department of Defense announced on Monday that it has added Chinese technology giants including TENCENT to the 1260H list.$Contemporary Amperex Technology (300750.SZ)$The list also includes semiconductor manufacturer Changxin Storage,$Quectel Wireless Solutions (603236.SH)$and drone manufacturer$Autel Intelligent Technology Corp.,Ltd. (688208.SH)$。

It is worth noting that the U.S. Department of Defense has also removed six companies that are allegedly no longer meeting the designated requirements, including the AI company Megvii Technology.$CHINA RAIL CONS (01186.HK)$ 、$China State Construction Engineering Corporation (601668.SH)$and$CHINA TELECOM (00728.HK)$。

In response to this situation, TENCENT stated in a declaration on the 7th, "Being listed on this list is clearly a mistake, we are not a Military Industry company or a Military Industry supplier. Unlike export controls or others, this list does not affect our Business. Nevertheless, we will still work with the relevant departments in the USA to resolve the misunderstanding." According to public reports, those included in the 1260H list together with us are $Contemporary Amperex Technology (300750.SZ)$ It was also responded that "this is an error, the company has not participated in any military-related activities."

Sudden news.

Just like Trump’s issues regarding tariffs, there was a surprising piece of news last night. The USA Department of Defense announced on Monday that Chinese tech giants, including TENCENT and Battery manufacturer Contemporary Amperex Technology, have been added to the 1260H list. According to official documents, the list also includes chip manufacturer Changxin Memory, Internet of Things solution provider Quectel Wireless Solutions, and Drone manufacturer Autel Intelligent Technology Corp.,Ltd. The USA Department of Defense also removed six companies that are reportedly no longer meeting the designated requirements, including AI company Megvii Technology.$China Railway Construction Corporation (601186.SH)$, China State Construction Engineering Corporation and $China Telecom Corporation (601728.SH)$the group.

So, how significant is the impact? According to the notice published in the Federal Register, the annually updated "Section 1260H list" specifies 134 companies. Although the designation does not involve immediate government prohibitions, it may harm the reputation of the affected companies and serve as a stern warning to US entities and companies, reminding them of the risks in conducting business with them. Additionally, it may increase the pressure from the US Treasury to sanction these companies.

The list in the Federal Register does not provide specific details about the impact on Tencent or other mentioned companies. However, historically, companies listed in this category often face stricter scrutiny and potential restrictions from the USA government, which may affect their Business Operations and investor sentiment.

After the above news was released, Tencent's ADR listed in the USA $Tencent (TCEHY.US)$ plummeted rapidly, with a drop extending to nearly 10% at one point, ultimately closing down over 7%. Prosus NV, which Hold about a quarter of Tencent's shares, fell by 7.2% during trading in the USA.

As of December 31, 2024, Tencent has repurchased a total of 0.307 billion shares throughout the year, with a total amount reaching 112 billion Hong Kong dollars, having conducted 129 sales, with an average daily repurchase amount of 0.868 billion Hong Kong dollars. Driven by continuous repurchases, Tencent's total share capital further declined to 9.22 billion Hong Kong dollars, reaching the lowest level in ten years. Tencent's share price also increased by 43.7% over the year 2024.

Latest Response

On the morning of the 7th, Tencent responded that it was clearly a mistake to list Tencent on this list, as we are not a Military Industry company or supplier. Unlike export controls or others, this list does not affect our Business. Nonetheless, we will still work with relevant US departments to resolve this misunderstanding.

According to public reports, Contemporary Amperex Technology, the world's largest Battery manufacturer also listed on the list, stated, "Contemporary Amperex Technology does not engage in any military-related activities." "We welcome responsible discussions about our Business Operations and take concerns regarding our Business seriously." Contemporary Amperex Technology holds about 38% share in the global electric vehicle Battery market and has always been in collaboration with$Tesla (TSLA.US)$and $Ford Motor (F.US)$ Cooperation, authorizing it to provide Battery manufacturing technology for USA factories. Contemporary Amperex Technology also stated that being placed on the list was a "mistake."

A spokesperson for Quectel Wireless Solutions also responded, stating that the company has "not cooperated with the military of any country" and will request the Pentagon to reconsider.

DJI, which was placed on the list in 2022, stated that USA Customs is blocking its Drone imports, ultimately leading the company to file a lawsuit, claiming that the designation resulted in "losses in business Trade" and the stigma of "National Security threats."

Editor/Rocky