Overseas tycoons focus on A-share new generation

 Overseas tycoons focus on A-share new generation

On October 30, Jianlang hardware, a construction hardware enterprise in South China, organized a telephone conference with 24 institutional investors. According to the information disclosed by Jianlang hardware, the participants of the meeting on the same day included people named point72 asset management. Behind the name is the family investment fund of Wall Street magnate Steve Cohen. Steve Cohen is the prototype of the protagonist of the well-known American TV series hundreds of millions. He can be called a famous figure on Wall Street.

For Yin Jianzhong, the director of Jianlang hardware, 72 point asset management is just one of the many foreign-funded institutions he has received recently. He believes that the change will take place in May 2020. Mingsheng MSCI released the index evaluation results on May 13, and Jianlang hardware was newly included in MSCI China A-share onshore index. Although there is not much overseas funds to track the index directly, the move of Mingsheng MSCI was caught by some foreign institutions.

He said that some of the foreign-funded institutions that came to the research had a certain deviation in their understanding of the company and its industry at the beginning, after all, the industry classification of different countries is not the same. However, it is obvious that the foreign institutions participating in the research are constantly changing. For example, some organizations have participated in several surveys in succession, and each time they have a deeper understanding of the company than the last one. Because they usually do a lot of homework before they come. Before the first visit, some organizations have conducted background checks on customers and competitors of Kinglong hardware. This impressed Yin Jianzhong. In addition, he also found that foreign institutions are more interested in the companys development plan, including: the companys long-term development goals, whether there are overseas benchmarking enterprises, etc.

Mr Yin said the company would not target foreign ownership. The main task of the company is to do a good job in the operation of the company and realize steady development. However, it is also an important responsibility of the company to fully and accurately disclose information to the institutions participating in the research.

Pay attention to the financial quality of the company

Like Yin Jianzhong, in 2020, directors and secretaries of many A-share listed companies have added a new task - responding to the investigation of foreign institutions.

According to wind data, from January 1 to November 26, 2020, A-share companies received 2253 surveys from foreign institutions, an increase of more than 40% compared with 1600 in the same period last year. Foreign institutions are constantly expanding the coverage of A-share listed companies. According to Fuda international, there have been hundreds of investigations on A-share listed companies this year. Compared with last year, the research is increasing. On the one hand, the company has increased the number of A-share analysts; on the other hand, the number of research fields participated by individual analysts has also increased significantly.

According to the Investor Relations Department of a growing TMT listed company, foreign institutions generally pay close attention to the companys financial quality, which usually includes the companys assets and liabilities, cash flow, etc. Some organizations will ask very detailed questions, such as the statistical caliber of the companys financial data. It is understood that this year, the companys northbound capital shareholding ratio has doubled. The Secretary of the listed company believes that it is necessary to pay more attention to the research of foreign institutions, because long-term capital is helpful to the development of the company.

Increase research coverage of small and medium sized companies

With the opening of asset management market in China, it is more and more convenient for foreign institutions to invest in A-share market. In order to make money, we must enhance our research ability. In recent years, the research on A-shares by foreign institutions has gradually changed from white horse value shares to growth companies, and the geographical location of the research has also transited from northbound Shenzhen to second tier cities, even to third, fourth and fifth tier cities.

As a foreign institution with the largest number of shares in Chinas A-share market, Lian Peikun, director of Securities Research Department of UBS, said that the number of A-share companies that the company has participated in this years research has increased by about 15% compared with the same period last year. The sectors concerned this year include consumption, science and technology, and medical treatment. In particular, with the maturity of the science and technology innovation board, UBS has more and more research on it. In response to the changes in the tastes of foreign-funded institutions, Lian Peikun said that investors are not only concerned about Baima shares, but also interested in small and medium-sized companies. Therefore, investment in research is also increased to help investors make better investment decisions.

Source: Ren Hui, editor in charge of China Securities Journal_ NBJ9607