APS Founder And CIO Wong Kok Hoi (Wang Guohui) Is Optimistic About A Share Investment Opportunities And Insists On Long-Term Investment.

Nearly three and a half years have passed since the SFC introduced the registration policy of foreign private equity funds in June 2016. As an important manifestation of China's capital market opening to the outside world, this new foreign force has also made good progress. Wind data show that as of the end of October this year, a total of 22 foreign private placement were completed in China's Fund Industry Association. The number of products issued was 56, and the total management scale was about 6 billion yuan.

The Cci Capital Ltd (hereinafter referred to as "Shanghai investment") is one of the 22 foreign private placement members. Last July, it received the private equity fund manager's license. Its parent company is Singapore based BHP Asset Management Limited.

Speaking of the views on the A share market and the original intention of investing in the Chinese market, Wang Guohui, founder and CIO Wong Kok Hoi (Wang Guohui), said in an exclusive interview with the economic news reporter in twenty-first Century that he is firmly optimistic about the investment opportunities of China's A share market, and also wants to introduce "Bi Sheng"'s long-term investment concept to Chinese investors.

Early arrival in China

Wang Guohui disclosed that as early as the beginning of 1995, when Bi Sheng was founded, he had already cast his eyes on the Chinese market. At that time, he believed that China is the most populous country in the world. China's economy is in a stage of rapid development. For an asset management organization, this means great opportunities and must be prepared early. Therefore, since 2004, Bi Sheng has invested in A shares through QFII.

In Wang Guohui's view, there were two landmark events that promoted Bi Sheng's "Lazi" China: one was the opening of the Chinese market to foreign investors at the beginning of this century, the introduction of QFII and the subsequent RQFII mechanism. Bi Sheng successively obtained QFII and RQFII qualifications in 2012 and 2014, and the other one was the opening of sunshine private placement licence to foreign investment management institutions. Bi Sheng was the sixteenth foreign private placement to get the qualification of private equity fund manager.

"Relatively speaking, Bi Sheng started earlier in China. We set up investment and research teams in China very early and began investing in A shares. The customers of Bi Sheng are also of high quality. There are a lot of long-term investment funds such as pension fund and endowment fund". Wang Guohui emphasized that China is not a licence for Bi Sheng "Lazi". It is also optimistic about China's investment opportunities. On the other hand, it also wants to introduce "long-term investment concept" to Chinese investors.

At the beginning of the registration policy of foreign private equity funds, Zhang Xiaojun, a spokesman for the securities and Futures Commission at that time, put forward three "advantages": it is conducive to enriching the types of institutional investors in the capital market, creating a competitive environment for benign industries, deepening the breadth and depth of China's capital market opening, enhancing the competitiveness and international influence of the private equity industry, and drawing lessons from overseas advanced asset management mode, investment concept, investment strategy and compliance control measures, so as to enhance the standardization level and investment management level of China's private equity industry.

This is the initial conclusion that regulators initially decided to attract foreign capital to enter the Chinese market. In this regard, Wang Guohui also said that asset management agencies need to promote in competition, and there is competition to make progress.

He also believes that since the beginning of this year, the pace of opening up China's financial sector has continued to stride forward. There are a number of policies, including the abolition or cancellation of Futures Company, fund companies, and foreign capital stock ratio restrictions, which will help foreign financial institutions to participate more deeply in the Chinese market.

Investment philosophy

Since the establishment of Bi Sheng management in Singapore in 1995, Wang Guohui has identified two development goals for the company: one is to focus on investment in the Asian market; the two is to adhere to the concept of long-term investment and adhere to basic research methods.

He has attached great importance to the Chinese market. He has been working in Singapore for one to two weeks from Singapore every year for many years.

"Focus and accumulation is very important for asset management institutions and investment itself", Wang Guohui said. The core of the philosophy of biheng investment is to continue to get the best quality of Alfa, through the unique and original selection, in-depth investigation and evidence collection and professional financial accounting analysis, and rigorous valuation, build clear investment logic and continuous verification, accurately grasp investment and understand downside risks.

"We will not change the stock position because of the short-term stock price rise and fall, but look at whether the company's own value matches the current stock price. In the three case, we will sell: the first is that the valuation is high, and the valuation depends on the next three to five years, not the present and the short term; the second is the deterioration of the fundamentals of the company; the third is the assumption of an industry and a company, if the investment logic is fundamentally changed, Wang Guohui said.

He disclosed that the average stock holding cycle of biheng was two years, and the longest holding time was held in 2004. "The confidence of investment comes from our in-depth understanding of every company in the portfolio, as well as the long-term view of investment targets, like business owners. We have built a diversified Alfa and low degree of investment portfolio, but not simply for diversification.

Investment process

"Fundamentally speaking, our investment process reflects our investment philosophy". According to Wang Guohui, in the aspect of acquiring investment targets, their practice is to grasp the long-term trend, to play the team's insightful insight, to dig out more valuable information, and strive to obtain long-term strategic investment direction through economic, social, geopolitical and industrial policy studies, and then to select investment targets. It is worth mentioning that they insist on reverse thinking to find rewards that are far greater than risks.

Regarding the company's research, Bi Sheng has his own way. Besides the traditional Benjamin Graham's basic analysis, he also wears "two caps" - detective Holmes and businessman Guo Henian. Using Holmes like in-depth investigation and analysis of financial accounting to determine the investment information obtained is true. From the perspective of businessmen, it is really a long-term operator's attitude to analyze the selected investment targets.

After a thorough study, we build portfolios. "Our fund managers will build diversified Alfa portfolios. They belong to structural, cyclical, economic and opportunistic Alfa. And the portfolio contains more than 10 investment themes, and the correlation between them is very low." Wang Guohui said that the risk management of Bi Sheng is mainly on downside risks, as mentioned above, which is reflected in the deterioration of the fundamentals of the industry and the company, overvaluation and weakening of investment logic. He believes that volatility or tracking error theory can not really measure and control investment risks.