Several explanations for the decline of Core assets

From the analysis of the situation of listed companies with substantial adjustment this time, it is mainly divided into several types.

The first typeTo Vanke, Anhui Conch Cement, Poly Real Estate as the representative of the traditional blue chip. Although this kind of traditional blue chip is the core asset of the A-share market, it is highly related to the real estate industry. Under the background of housing speculation, there may be great variables in the profit growth rate of enterprises in the future. From this round of adjustment, the cumulative decline of some core assets has exceeded 30%, basically releasing the expectation of a decline in performance growth in the next few years. However, at this stage, the market is more sensitive to the real estate industry and related industries, so the valuation and pricing of these industries will also be very conservative.

The second typeThe core assets represented by Guizhou Moutai and Wuliangye, although these core assets are not closely related to the real estate industry, and have a certain pricing power and moat, but from the perspective of the largest cumulative decline, Maotai has a cumulative decline of more than 30%, and Wuliangye has declined a lot. The adjustment of such core assets can be defined as the behavior of institutional warehouse adjustment, or it can be vividly described as the phenomenon of institutional disintegration.

The third typeThe Internet new economy enterprises represented by Tencent and Meituan are also recognized as the core assets in the market. Judging from the cumulative decline, there is also a decline of more than 40 per cent. Even Tencent, whose market capitalization is trillions, has lost trillions of dollars in market value this round, and the stock price has accelerated to its position around March last year. The decline in this category of core assets is more likely to be related to policy regulatory factors. However, what the market is worried about at this stage is that the policy regulatory signal does not have a clear inflection point, and when the core assets will be sold out is still a variable.

Is it necessary to reevaluate the value investment?

Whether they are core assets that are highly related to real estate, or core assets with a wide moat, or Internet giants, their average decline in this round of adjustment is more than 30%, and some are down more than 40%. In the current volatile market environment, it is obviously not a normal and healthy phenomenon.

For an excellent enterprise in the real sense, it should have strong anti-cyclical characteristics, and at the same time, with its own risk defense ability, it can show a strong anti-falling trend in the volatile market and downtrend environment. However, in this round of adjustment, the relevant core assets do not seem to show this anti-falling, anti-cyclical advantage, but the decline is much larger than the performance of the market index in the same period.

Excluding the influencing factors of corporate fundamentals, it has something to do with the loose and tight factors of policy supervision. In addition, it is basically inseparable from the influence of large funds and large institutions that have the right to say the price.If from the comprehensive influence analysis, the impact of policy supervision is greater than that of large funds and large institutions, and then consider the impact of corporate fundamentals.

It is undeniable that after the accelerated institutionalization of the A-share market in recent years, the degree of institutionalization of the stock market has been significantly improved. However, behind the fact that institutional investors have a greater say in price, the trend of stock prices of listed companies is largely affected by institutional funds.

From the market situation in the past six months, any industry track under the care of institutional funds can basically rise against the trend, but assets abandoned by institutional funds may stage a falling market. In the final analysis, the highly institutionalized market itself is a double-edged sword, which helps rise when it rises and helps rise when it falls, and the investment trend of institutional investors is inextricably linked with the policy regulatory environment.

From the high degree of institutional agglomeration to the disintegration of institutional agglomeration, this may be the trigger for the accelerated decline in the share prices of some core assets. Under the influence of the tightening of the policy and regulatory environment, it has accelerated the disintegration of institutions, and with the emergence of irrational centralized selling in the market, emotional selling has occupied a dominant position. and accelerate the reconstruction of the stock valuation system of listed companies.

To make value investment in the A-share market, it is obviously not enough to focus on the development prospects of the industry and listed companies, but also need to pay more attention to the trend of policy supervision and the investment behavior of large funds and large institutions. However, when the market is controlled by some speculative institutional funds, it is easy to affect the normal operation order of the market, which is not conducive to the long-term healthy development of the stock market. To some extent, some institutional investors are more speculative than ordinary retail investors, and their self-discipline may not be as good as ordinary retail investors.