As one of the most determined institutional investors in China's A-share market, the shift in the style of private equity funds provides a reference for other investors, especially in the context of BABA's listing in Hong Kong, China. Mainland investors seem to be warming up again.

Smart funds have entered the market at the bottom.

Since the beginning of this year, volatility and horizontal trading are the norm of A shares, but generally speaking, the A share market has provided a lot of opportunities for investors, and the major indexes have increased significantly. Up to nowThe CSI 300 index has risen nearly 30% this year, second only to 2009 and 2014 in the last 10 years.At the same time, as a representative of the growth stockThe gem index has also risen by nearly 35% so far this year, which is second only to 2015 and 2013 since the gem was launched 10 years ago.. In addition, the performance of Hong Kong stocks in the same period is not satisfactory.The Hang Seng index is up just 1.86% this year.

In the most recent week, Hong Kong stocks have fallen 4.79% in the week. At the same time, the weekly decline of Hong Kong stocks so far this year has remained between 5% and 6%.From a historical point of view, the adjustment since 2018 has brought Hong Kong stock valuations close to historic lows. Yingfeng Capital said that due to historical reasons, high-quality Chinese companies have chosen to list in other markets, causing mainland investors to miss a lot of opportunities. At present, there is "overcrowding" in some blue chip transactions in the A-share market, which makes it necessary to allocate multiple assets properly.

As a matter of fact, the current low-valued investment value of Hong Kong stocks is generally recognized in the industry, especially in the near future when BABA will be listed on the Hong Kong Stock Exchange, which will further attract funds from China's new economy and the Internet to invest in Hong Kong stocks.As to whether it is a good opportunity for Hong Kong stocks to buy the bottom, most private placements have given an affirmative answer.

According to the survey results of the private placement network, 76.35% of the private equity companies believe that in this round of adjustment, many high-quality targets of Hong Kong stocks have been mistakenly killed, and the opportunity for a "golden pit" of Hong Kong stocks is rare, and the interviewed private equity companies have actively increased their positions and "copied the bottom" of Hong Kong stocks. At the same time, 23.65% of private equity companies believe that although Hong Kong stocks with low valuations have investment value, there is still a lot of uncertainty in Hong Kong stocks. It is suggested that caution should be given priority to, and that we should not blindly "copy the bottom".

People related to Bao Yin's investment said that a large number of listed companies in Hong Kong stocks are closely related to economic performance. Under the current circumstances, the opportunities of Hong Kong stocks outweigh the risks, which is based on the analysis from the perspectives of capital, valuation and expectation.

• First, since the opening of the Hong Kong Stock Connect, Hong Kong stocks have continued to undertake funds from the mainland to the south. Since the beginning of this year, the cumulative net inflow of the overall Hong Kong Stock Connect has been 178.3 billion yuan, an increase of 110.08% over the 84.872 billion yuan in the same period last year, and a net inflow of 19.04 billion yuan in October alone.Hong Kong stocks, which continue to flow into Hong Kong this year, are bound to see a rise in share prices.

• Second, cheap is the last word.At present, the price-to-earnings ratio of the Hang Seng Index is only 9.7 times, and the price-to-earnings ratio of the Hang Seng National Index is even as low as 8.4 times, which is similar to that of the financial crisis in 2008.However, over the past decade, the size and profits of companies listed in Hong Kong stocks have increased. From historical experience, whenever the price-to-earnings ratio of Hong Kong stocks reaches this stage, it will usher in a big uptrend.

• Third, with the improvement of the external environment, investment opportunities in Hong Kong will also come.Hong Kong stocks are currently in a low stage, at this time the layout opportunity is rare.

BABA ignites investment enthusiasm

As a matter of fact, the industry has been optimistic about Hong Kong stocks recently, which is directly related to the listing of BABA in Hong Kong, which has injected the blood of the new economy into the Hong Kong market, and at the same time, has enhanced the active atmosphere of the recent listing of Hong Kong stocks.

BABA's subscription for new shares is very hot, and the international placement has been closed ahead of schedule. According to the latest data, the subscription for public offerings is more than 40 times, the frozen funds are more than HK $96.3 billion, and the HK $70.949 billion for medium-sized mobile games is higher than that of medium-sized mobile games, making it the frozen capital king of new shares this year. "Wu Biwei, president of financial and corporate services at Forto Securities, told Securities Daily that BABA will also launch a callback mechanism and increase the proportion of public offerings from 2.5% to 10%. Among them, the total amount of subscriptions for BABA through Futu Securities exceeded HK $5.1 billion, accounting for 218% of the public subscription amount, including HK $3.3 billion of the total financing subscription. The winning result of BABA's subscription will be announced by the Hong Kong Stock Exchange on November 25, and dark market trading is expected to be very popular.

Wu Biwei said that at present, BABA has set the offering price of the HKEx IPO at HK $176a share, a discount of nearly two percentage points to the closing price of US stocks in recent days, which also shows that the overall subscription situation of BABA is very good, which cannot be compared with other new shares. "this is the second time that BABA has been listed in Hong Kong. Previously, it has been listed and traded in the US stock market, supporting the conversion of one US share into eight Hong Kong shares in the two markets.It is ideal for BABA to have such a good subscription in the Hong Kong market.Wu Biwei said.

At the same time, he believes that long-term investors will allocate stocks like BABA. At the same time, after listing, BABA will inevitably enter the target of Shenzhen-Hong Kong Stock Connect and Shanghai-Hong Kong Stock Connect, become a constituent stock of the Hang Seng Index, and will be popular in international placement and public subscription. International placement is dominated by institutional investors, while public subscription is dominated by retail investors.While retail investors, especially those in Hong Kong, China, have relatively little participation in US stock trading, the listing of China's leading technology companies such as BABA is bound to be highly sought after.

Liu Zhenghua, general manager of Zhiyuan Investment, also thinksAt present, Hong Kong stocks have a very large investment value, and the valuation has reached an all-time low.

Zhang Lichong, a founding partner of US-Hong Kong Capital, saidEvery undervalued state caused by non-corporate fundamentals is the best opportunity for bottom reading.The decline in liquidity this year has led to a big drop in many high-quality H-share listed companies, while the main operating income of most Hong Kong listed companies comes from the mainland market, and changes in the local operating environment have not changed the operating basis of these companies. Therefore, short-term capital outflows give a very good opportunity to increase positions.

Waiting for recovery.

The adjustment in the Hong Kong stock market continued, with the Hang Seng Index falling 1.57 per cent on November 21, but a net purchase of HK $3.012 billion from southbound funds on that day, with a net inflow of more than HK $2 billion for the seventh consecutive trading day. Industry insiders pointed out that southbound funds bought Hong Kong stocks on the basis of medium-and long-term investment opportunities. Hong Kong stocks' unique high-quality companies and low valuations are important reasons favored by many investors. Investment sentiment in Hong Kong stocks is beginning to recover, and the market is waiting for recovery.

As a fund manager at the new starting point of Guangfa, Shanghai, Hong Kong and Shenzhen, Li Yaozhu has been paying attention to the investment opportunities of Hong Kong stocks since the second half of the year. By horizontal comparison, Hong Kong stocks are valued at a low level in the global capital markets, he said. There are many outstanding enterprises in Hong Kong, such as innovative drugs, biopharmaceuticals and technology sectors, which are excellent growth stocks in the medium to long term. There are not only Internet giants represented by BABA, Tencent and Meituan, but also leading companies in semiconductors, mobile phone parts, pharmaceuticals and other industries worthy of attention. In addition, he is also optimistic that the consumer sector of Hong Kong stocks, such as sportswear, catering and other segments of the leading companies, are also scarce high-quality stocks.

Pay attention to the three major plates

Compared with the structural situation of the A-share market, the Hong Kong stock market fluctuated and adjusted this year, with a smaller increase in the mainstream index. From the institutional point of view, BABA's return to Hong Kong shares and the full circulation reform of H shares will continue to boost the Hong Kong stock market.

Chuancai Securities pointed out that BABA's return to Hong Kong stocks has not only played an exemplary role in the return of more US Chinese stocks, but also brought capital vitality to the Hong Kong stock market, and more US Chinese stocks are expected to return in the future.

Talking about the future, Li Yaozhu believes that the upgrading of corporate ROE will lead to an increase in the valuation of Hong Kong stocks, and the Hong Kong market is expected to usher in both ROE and valuation next year. There are three sectors worth watching next year:

• The first is the high dividend sector of the Hong Kong market. High dividend stocks in the Hong Kong market are much cheaper than those in the mainland, and these companies are very attractive in terms of valuation and dividend ratio.

• Second, the Internet giants listed in Hong Kong will have better investment opportunities next year, and the long-term competitiveness of these companies is constantly strengthening, which is worth holding by investors for a long time.

• The third is Hong Kong's innovative and bio-pharmaceutical sectors. Because many bio-pharmaceutical companies in Hong Kong can be listed without making a profit, these enterprises are in a stage of rapid growth and currently have better allocation opportunities.