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  • 07/05/2016

Wang awes investors by sticking to his numbers: muddy Hong Kong, no problem


The Fundamental Principles of Investment with Shenzhen-Hong Kong Link

By Justin Lee
Alan Wang

With over US$3 billion under management, Principal’s Hong Kong Equity Fund has been honored as the “Best-in-Class – Hong Kong Equity” category, outperforming its peers over the one-, three- and five-year period, with returns underpinned by the manager’s fundamental, research-based bottom-up approach to stock selection.

Over the past 12 months, the global macro-economic environment has seen increased market turmoil, especially during the second half of 2016 when events, such as the United Kingdom European Union membership referendum (Brexit), the rapid decline in China’s forex reserves and Donald Trump’s victory in the US presidential election, all served to fuel market volatility.

Alan Wang, portfolio manager and head of Greater China Equity at Principal Global Investors (HK) said while some peers reacted in a knee-jerk manner to this volatility, Principal’s Hong Kong Equity Fund has continued to hold on our three investment principles.

“We focus on stocks with improving fundamentals, positive expectation gaps and attractive valuations. If you look at our investment portfolio profile quarter to quarter, this has never changed. Last year, we saw a global trend of anti-trade or nationalism. Under this situation, it is particularly difficult for China being a world factory and having benefited from global trade. So we have been adjusting the portfolio to adapt to this,” said Wang.

Benefit from Consumption

Wang believed that the Chinese authorities are likely to remain focusing on domestic consumption and fiscal spending to counterbalance a foreseeable fall in exports due to potential tariff change. Moreover, state-owned enterprises and supply-side reform will continue and will be useful in building confidence to deter further capital outflows.

“I believe Trump’s policy on a potential 45% tariff on China’s exports is not doable, at least on a large number of goods – just look at how many iPhones are shipped to the US from China and how many machines, shoes and clothes are made in China. We expect China’s government to promote more value-added services hard to be replaced, such as development in the IT, media sector, mobile games and maybe even domestic retail brands.  I think these will be good segments to focus on,” observed Wang.

Superior Stock Selection

According to Wang, three principles distinguish superior stocks: positive and sustainable fundamental change, investor expectation gaps and attractive relative valuations. Indeed, Wang and his team were able to benefit from market volatility to their advantage and managed to take profit when markets were at their peak and build positions in attractively valued stocks.

“We also continued to accumulate a position in stock within the transportation sector when it was at 0.4x book value, while the stock has already returned up to 40% this year. The result came after it became one of our top over-weighted holdings last year and we have been making these calls facilitated by our very powerful fundamental research tools,” he added.

Preferred Sectors

Among sectors, the Fund got the largest exposures to the stocks in financials, IT and consumer discretionary, all which have added value over the past 12 months. Wang expects Hong Kong financial stocks in banking and insurance to benefit from rising interest rates due to expanding margins, and believes that the IT, auto and retail sectors will take advantage of a rise in consumption. “A lot of investors are underweight in financials because of asset-quality reasons. However, asset quality has improved over the past year as overcapacity in some sectors has been addressed,” noted Wang.

In the IT sector, Wang focuses on the software sector, with robust mobile-game growth at multiples several times that of China’s GDP growth. “The stronger companies took advantage of this growth and invest in other opportunities such as cloud and advertising, and these segments are now growing at a faster pace than gaming revenue. In consumption, we like autos and the retail sector as we think consumption will increase as people spend more to improve their living standards,” concluded Wang.

A Global Research Platform

Wang also credited Principal’s Global Research Platform with playing a key role in the Fund’s out-performance. The platform is a group of 56 proprietary models, using complex fundamental factors and advanced quantitative screening to enhance efficiency in stocks selection. At the same time, the operational efficiency can also be enhanced for stock out-performance versus the benchmark.

“It was the first project I worked on when I joined Principal as an intern more than ten years ago. It works on the weekends and assigns each stock that we cover a rank of 1 to 100. Then every Monday morning the analysts have the tools to focus on companies that tend to outperform. This practice allows us to be more effective in our research and ensures we don’t waste time on companies that may under-perform. Although this doesn’t replace our job of selecting stocks, it arms us with an investment machine gun,” said Wang.

Turning to recent market developments, Wang believed that the launch of the Shenzhen-Hong Kong Stock-Trading Link in December 2016 would also be positive. Foreign investors can now access the Shenzhen market, which is known for its “New Economy” stocks, while Mainland Chinese retail flow into Hong Kong will now provide an additional source of liquidity, thus decreasing transaction costs for larger institutional investors such as Principal.

“Nevertheless, we will continue to focus on fundamentals and strive to deliver out-performance to our investors,” said Wang. BM

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投資的基本原則

Justin Lee 撰文

擁有超過30億美元管理資產的信安香港股票基金今年獲頒「同級最佳 – 香港股票」大獎,表揚基金在過去的1年、3年和5年表現皆領先同儕,優勝表現源自基金經理著重基本面、以數據分析主導的由下而上選股策略。

環球宏觀經濟環境在過去12個月經歷急劇變化,2016年下半年市況尤其不穩,期間英國公投脫歐、中國外匯儲備大幅下降,以及特朗普當選美國總統等均令市況更趨波動。

信安環球投資大中華區(香港)股票投資主管及基金經理王曦指出,雖然部份同業只能隨大市波動亦步亦趨,但信安香港股票基金仍堅守三大投資原則。

王曦解釋:「我們主力投資於經營基調持續改善、投資預期存在正面落差,以及估值吸引的股票。 若仔細觀察每季的投資組合,你會發現這三大原則從未改變。作為世界工廠的中國,過往從環球貿易中得益不少,但去年反全球貿易及種族主義成為全球趨勢,對中國經濟尤其不利。故此,我們正對應此趨勢調整投資組合。」

瞄準中國消費增長的機遇

王曦相信,中國當局將繼續專注在內需及財政支出,以抗衡一旦貿易關稅增加,可以預期的出口下降對經濟造成的影響。此外,國企改革及供應面改革亦將繼續實施,有助穩定投資者信心,防止資本進一步外流。

「我認為特朗普要實施早前提出對中國出口增加的45%關稅並不可行,至少對大部份的貨品行不通──單看由中國運往美國的大量iPhone以及中國製造的機器、鞋履和成衣,就可理解關稅難以實施。我們預期中國政府將鼓勵市場發展更多難以取替的高增值服務,例如資訊科技、媒體、手機遊戲,甚至本地零售品牌,我認為這些都是值得留意的具潛力板塊。」

勝人一籌的選股策略

王曦認為優質股有三個關鍵特徵:正面及可持續的基調改善、與投資者預期存在落差及相對具吸引力的估值。王曦及其團隊成功駕馭市況波動,在股市高位時獲利,並能把握時機買入估值吸引的股票。

他續稱:「我們早前不斷增持一隻運輸板塊股票,當時該股票的市帳率為0.4倍。至今,該持倉已錄得高達40%的升幅。此選股由去年成為我們最重視的持股之一。」他補充:「我們之所以能夠作出此投資決定,實有賴我們強大的研究工具。」

推介板塊

在各板塊中,基金的最大持倉在金融、科技和高檔奢侈品零售三個板塊,這些投資在過去12個月均能為基金賺取回報。在香港的金融股中,王曦預計息差擴闊,可帶動銀行股及保險股回報利率上升。而科技、汽車及零售行業則可受惠於消費增長。」王曦補充:「很多投資者正低配金融股,主要是憂慮資產質素轉差。然而,由於過去一年部份行業的產能過剩問題已得到解決,故資產質素已有所改善。」

科技板塊方面,王曦則看重軟件相關股份。手機遊戲用戶的強勁增長,遠較中國國內生產總值增長高出數倍。王曦總結:「手遊股中,較有實力的企業皆把握此增長趨勢,同時投資於其他機遇,例如雲端服務和廣告收益,目前這些分支業務的增速已超過手遊業務的收入增長。在消費板塊方面,我們偏重汽車和零售行業,因為我們預計人們為提高生活水平,會更樂意消費升級,推動行業增長。」

覆蓋全球的研究平台

王曦亦把出色的基金表現,歸功於信安環球研究平台發揮的關鍵作用。研究平台由56個專有模型組成,透過多種基本因素及高等計量分析的篩選方法,來提高選股效率,幫助分析師辨識能夠跑贏大市的股票,營運效率亦因此提高。

「研究平台是我在十多年前加入信安當實習生時首個參與的項目。在周末休市的時間,我們將涉及的股票以1至100評級。分析師可利用這些工具集中留意有更大機會跑贏大市的股票。 這方式讓我們更有效地進行研究,並確保我們不會浪費時間在可能表現欠佳的公司上。雖然這平台不能取代我們的選股工作,但它猶如為我們配備『投資機關槍』。」王曦說。

談及最近的市場發展,王曦認為2016年12月推行的深港通將起正面刺激。外國投資者現可進入以新經濟產業股為主打的深圳股票市場,而內地投資者進入香港股票市場,帶來額外的資金流,同時有助降低信安等大型機構投資者,如信安的交易成本。

「儘管如此,我們將繼續專注於基本層面,致力為我們的投資者帶來優越的回報。」王曦說。BM

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