Only 20 days after the official report of the first public offering product, Blackrock once again increased her position in a Chinese company.

Blackrock's technology opportunity portfolio increased its investment in JD Health in June while reducing its position in Netflix, according to analytical data, which revealed a 9.6 per cent increase in the value of its position to $8.56 billion.

This also confirmed the outside world's speculation about Blackrock's determination to formally enter the Chinese investment market.

Pan Zhongning, director of the investment department of Huaxia Fund, once said: "Foreign investors believe that investing in Chinese companies is equivalent to investing in the world leader in the future." with the sustained growth of China's economy, the investment advantages of Chinese enterprises will gradually expand, and more foreign enterprises and investment banks will continue to reinvest in Chinese enterprises.

It's not just Blackstone Group Inc.Black Rock also likes "Chinese enterprises".

When it comes to Blackrock, we have to mention Blackstone Group Inc. As "two brothers born in the same womb", the two companies have taken a completely different route.

In 1985, Blackstone Group Inc founder Su Shimin spent 400000 US dollars to founded Blackstone Group Inc, then Blackrock founder, Larry Fink founded the "Blackstone Group Inc Financial Management" department. In 1995, due to the irreconcilable contradiction between the two, they finally decided to go their separate ways. Blackrock took the route of public offering, while Blackstone Group Inc preferred the route of private placement.

If we say that Blackrock and Blackstone Group Inc were not separated, there may not be the first brother of global asset management now.

Today, Blackrock has grown into the largest listed investment management group in the United States, with operations in 60 countries and regions, including important markets in North America, Europe, Asia Pacific and the Middle East.

As an asset management agency, the scale of management is naturally the core business indicator. The latest financial report shows that in the second quarter of this year, the company's assets reached 9.49 trillion US dollars, equivalent to 61.4544 trillion yuan, while all domestic public offerings add up to only about 23 trillion. You can see how large Blackrock's asset management is.

However, what is interesting is that as a global asset management agency, Blackrock loves the Chinese market. Apart from the previous report on public fund products and the signal that he is officially entering the Chinese public fund market, Blackrock has said that he is optimistic about China's opportunities more than once.

In April this year, Blackrock founder Larry Fink said in an interview: "Blackrock focuses on long-term investment and achieving long-term development goals, so Blackrock has always focused on high-growth markets." The Chinese market provides an important investment opportunity to achieve the long-term goals of domestic and foreign investors, as well as an opportunity for Blackrock to help solve the retirement challenges facing millions of people in China. "

In fact, Blackrock has always attached importance to the Chinese market and has been working in the domestic market for a long time. In 2006, Blackrock merged with Merrill Lynch to become a joint venture shareholder in Bank of China International Fund (now Bank of China Fund).

Not only that, Blackrock has also been investing in China through QFII, RQFII Shanghai / Shenzhen Stock Connect, Bond Stock Connect and domestic interbank bond market. Blackrock's US official website shows that at present, the company's equity funds investing in China include iShares MSCI China ETF, iShares China Market ETF and Blackrock China An opportunity Fund and other funds.

Blackrock can also be seen in the ownership structure of China's star enterprises, including JD.com, Ningde era and Mindray Medical, which are concerned by the capital market.

It can be said that, as a foreign investor, Blackrock loves the Chinese market no less than Hillhouse and other domestic investment banks.

Reduce Netflix Inc's holding and increase JD Health's holdingsDoes the "uncrowned king" investment also pick people?

However, the market for Blackrock to reduce Netflix Inc this matter, but there is a dispute, as the world's more popular "king of streaming media", why it will be reduced by investment institutions.

In fact, these have long been revealed in Netflix Inc's past development. On April 21, Netflix Inc released its financial results for the first quarter of this year. In terms of core data, the growth of new paying users in the first quarter was only 3.98 million subscribers, which was lower than Wall Street's forecast of 6.29 million and his own forecast of 6 million, not to mention 15.77 million in the same period last year, which also caused Nai Frisbee's share price to plummet by more than 11%.

In addition, with the rise of new players such as Disney+ and HBO Max, Netflix Inc is still facing the situation of double pursuit between new and old players. In early March, Disney+ announced that the number of global subscribers had exceeded 100m, compared with only 94 million at the end of last year, meaning that Disney+ had added 6 million users in less than three months, far surpassing Netflix Inc's 3.98 million, less than a year after Disney+ was launched.

The announcement of the Q2 financial report in 2021 also proves this conclusion that the net profit is lower than expected, the growth rate of new paying users has dropped sharply, and the membership model has appeared on the ceiling, all of which appear in Netflix Inc's financial report.

The logic of Blackrock's reduction of Netflix Inc's holdings is already obvious. On the one hand, the rise of new and old players in the streaming media market is eroding Netflix Inc's market share; on the other hand, Netflix Inc's own business and core users began to appear the ceiling, and the growth trend gradually slowed down. On the contrary, JD.com has become the object of Blackrock's increased holdings, which is worthy of market taste.

At present, the domestic Internet medical market has attracted much attention from the capital market, and many capital giants and investment banking institutions have entered the bureau one after another, which makes the development potential of domestic Internet health care gradually highlighted. In the existing market pattern, JD Health, Alibaba Health Information Technology and Ping An Healthcare And Technology occupy more than half of the country.

Through the comparison of financial statements, it can be found that the performance of the three head enterprises shows a different growth trend.

In terms of revenue volume, the 2020 financial report shows that JD Health continues to take the lead among the three enterprises with 19.4 billion yuan. Alibaba Health Information Technology also crossed the 10 billion mark for the first time, with revenue reaching 15.518 billion yuan, while Ping An Healthcare And Technology is still hovering around 6 billion.

In terms of profitability, JD Health is also the most profitable of the three enterprises. Financial report data show that JD Health made a profit of 749 million yuan in 2020. Although Alibaba Health Information Technology made a profit for the first time, it is still not as good as JD Health in volume, and Ping An Healthcare And Technology has been in the process of losing money, with a net loss of 949 million yuan.

Standing in these two dimensions, JD Health seems to have a lead in the domestic Internet medical industry. The reason behind this may be JD Health's mode of operation. At the beginning of its establishment, the parent company JD.com attached great importance to the construction of its own supply chain and logistics system, and JD Health also adopted a consistent self-management approach. The prescription drug market can be said to be JD Health's greatest strength. Compared with other players, JD.com has set up a medical team composed of free doctors and external medical experts to help users use drugs safely.

Relying on JD.com, the supply chain capacity is also reflected in JD Health. By the end of 2020, with cooperation with JD.com Group, JD Health has set up 14 special drug warehouses and more than 300 non-drug warehouses nationwide, and the advantage of "heavy assets" is indeed difficult for other competitors to catch up with in a short period of time. This may also be the place that Blackrock is optimistic about.

It is worth mentioning that before JD Health went public, six cornerstone investors jointly subscribed for shares worth as much as 1.35 billion US dollars. Among them, there were bigwigs such as Hillhouse and Blackrock, thinking that Blackrock had already placed a heavy position in JD Health. The logic of this increase is not difficult to understand.

The frenzied influx of foreign capitalDoes the Chinese market welcome the investment boom?

In fact, it is not only Blackrock, but also well-known investment banks such as IDG Capital and Sequoia Capital, who will invest much more in China in 2021 than ever before.

In May this year, Changdian Technology completed a fixed increase of 5 billion yuan, more than half of which came from domestic and foreign leading investment banks, such as JP Morgan and Abu Dhabi sovereign wealth fund. Not only that, both domestic and foreign investment institutions, investment eyes are significantly turning to the Chinese market. By the end of June this year, Sequoia Capital China, Matrix Partners China and IEG Capital had invested in 159,95,71 projects respectively, an increase of 96,66 and 44 projects over the same period last year.

The crazy influx of capital has aroused the torture of investors. Is the Chinese market really worthy of capital injection?

At present, China's focus of economic development to improve the quality of economic growth, from the perspective of long-term development, is conducive to the cultivation of more high-quality companies, especially some companies with a longer development cycle, will get a round of development.

In addition, China has great ambitions in achieving climate goals, and many related industries will benefit from climate policies. at present, China has set positive goals to improve the market sales of new energy vehicles, which also makes new energy, semiconductors, photovoltaic plates and other related industrial chains on fire.

In the secondary market, a few days ago, it was reported that the relevant state departments may be exempted from the data security examination of enterprises going to Hong Kong, which also means that the qualification examination process of companies listed in Hong Kong in the future will be easier, and more high-quality companies or enterprises will enter the stock market.

Blackrock has said that China's share in the global index is still low, and its share in the MSCI "all countries world index" (including offshore stocks) is still low, but it also shows that the Chinese stock market will have great growth potential in the internationalization and capital markets.

In addition, the central bank has implemented the reserve reduction policy, which has accelerated the flow of funds in the market, and the cumulative amount of funds released will significantly ease the funds in the stock market. Spurred by the good news, the FTSE A50 futures index skyrocketed on July 9, rising nearly 1 per cent at 22:00 on the day.

China and the US are the two best-growing markets in both fixed income and equity markets, which is one of the most important reasons why foreign institutions continue to increase their positions in the Chinese market, said one professional.

Abe Standard Investment once pointed out in an interview, "China is the first country to detect and control the COVID-19 epidemic, and the long-term growth potential of the consumer and technology industries has not been seriously affected." With provisions for credit losses already above its peak, China's financial sector is also likely to be the next engine of growth, including a growing number of Chinese technology companies listed in Hong Kong. Positive changes are taking place. "

It is not difficult to understand Blackrock's logic of increasing JD Health's holdings. Under the situation of COVID-19 's continuous vaccination, China's economy has led to a full recovery, coupled with the return of Chinese stocks one after another, and the investment value of the Chinese market has been gradually excavated. Schroeder, Fidelity, Lubermai and other foreign investors are all on the way to the Chinese market, which has become the best proof.

Larry Fink, founder of Blackrock, once said frankly: "Great changes are taking place in China, and the cost of ignoring this emerging opportunity is too high, especially in the long run." "