Ma Lei, Head Of Fidelity International Greater China Fund, "Big Data +5G" Breeds More Investment Opportunities In China

Along with more foreign investment institutions in the layout of A shares increased, some foreign investment style is further clear.

As an internationally renowned information management organization, Fidelity International is moving more and more in China. Recently, Fidelity International appointed He Huifen as chairman of the China region. This is also the first time that he has established the position of chairman in China. The A share market is becoming the focus of the layout and focus of fidelity.

Ma Lei, the fund manager of Fidelity International Greater China fund and the fund manager of Fidelity's several China and greater China theme funds, has recently accepted an exclusive interview with the economic news reporters in twenty-first Century. He has introduced in detail the focus and investment logic of fidelity international investing in A shares in recent years.

In Ma Lei's view, the continuous influx of long-term funds from foreign institutions and pensions will, to a certain extent, correct the phenomenon of short-term investment in the past, and guide more market participants to practise long-term value investment.

Grasp the trend of "big consumption"

Twenty-first Century: Fidelity's layout of China's big consumption concept was earlier. In recent years, consumer stocks have performed well. How can this opportunity be grasped?

Ma Lei: before I joined fidelity, I was in Peregrine, Paris, France. In 2004, we made a big report called The Power of One. The generation of the only child in China will have a great impact on the consumption of China as a whole.

After joining fidelity in 2006, I will first look at consumption and then look at other industries. In 2011, I told the company that I think there was a big change in China's consumption, because the proportion of China's consumption in GDP was declining. I think there will be a change from 2011 to that of consumption. Our company also felt quite reasonable, and became a consumer fund in China. In February, it started from February, from 1 million dollars to about three billion dollars now.

Twenty-first Century: Why did this node start in 2011 and think that China's consumption sector has sustained opportunities?

Ma Lei: 2008, 2009, 2010, these three years are high investment in fixed assets, but I think the fixed assets itself has little returns, but consumption as a follow-up result, including the growth of the company, will certainly improve. The subsequent market changes also support that 2011 is the turning point of consumption.

Twenty-first Century: how can we understand the Growth Logic of the consumer industry in a longer period?

Ma Lei: since 2011, many companies in the consumer industry have performed well. Consumption itself is also an endogenous demand, and it will not be interfered by many periodic factors.

This is the development of urbanization, population structure and consumption habits. Just as young people tend to consume more than the middle and old age, it will bring a significant pulling effect. The consumption industry has increased by 10% in the past and 7% this year, but in this context, you choose to grow more than 10% annually.

You can find some companies that exceed the average growth rate of the industry, or which industries have more penetration space, which can further gain more market share. This is also the reason why some companies can continue to win.

Twenty-first Century: for the consumer industries such as white electricity, there is also a discussion of the gradual saturation of permeability in the market.

Ma Lei: Taking Bai electric industry as an example, it is actually continuously infiltrating, but there is a process of penetration. For example, refrigerators lag behind washing machines and air conditioners lag behind refrigerators, but there are still some growth in higher penetration categories, because on these vertical brands, the company can still achieve consumption upgrading through brand and product innovation.

So we also need to see whether enterprises can maintain continuous innovation, and the market space is always there. People will be willing to pay higher prices for better products.

Automated China Opportunities

Twenty-first Century: you also mentioned how to understand investment opportunities in the field of automation.

Ma Lei: in the history of mankind, there have been four automatic revolutions. The first time is based on the power transformation represented by the steam engine, the second is electricity, the third is silicon, the foundation of the fourth time may be "data", and at the same time, it is based on 5G and other communication technologies.

In the previous revolutions, China has a gap with the rest of the world, but in the fourth revolution, China can lead the world.

First of all, China's consumption and manufacturing data are very sufficient. Secondly, China's 5G development speed is also ahead of the rest of the world. Combining 5G with data will generate many new investment opportunities and bring more space for production value. In the future, robots in industry, logistics and other fields will have larger opportunities for development.

Twenty-first Century: there are also some short boards of the underlying technology in China, such as the chip area. How to solve this problem?

Ma Lei: chip technology is really important, because we need to solve the problem of computing, and we need more advanced nanoscale process. But in the era of 5G, we may not need to do so many operations on the cell phone. We can put it in cloud and background to solve the actual demand. And the chips needed in the background may not necessarily require the 5nm or 7Nm level. The shortage of hardware side can be supplemented by improving software capability.

Back to investment, every branch of automation will have good companies. Once these companies are listed, they will enter our research vision. We will compare and analyze their production patterns, data and profits.

Twenty-first Century: foreign institutions usually practice the concept of long-term investment. What is your shareholding cycle?

Ma Lei: let's buy a company. Of course, the longer the shareholding cycle is, the better. But there will always be special circumstances, one is the wrong judgment; the two is the industry has changed; the three is the company has changed. The four is that the stock price changes, so there will be another business, because the original logic may change.

On this basis, our turnover rate is about 30%-40% in one year. The average holding period is about two years or more. I think the long cycle of holding is normal and short is not normal. Of course, if some stock prices suddenly grow too fast and reflect the growth of the next few years, we will consider selling them.

Twenty-first Century: there are some short periods of public investment in A share market.

Ma Lei: this may be related to the assessment mechanism, because different institutional arrangements determine the behavior of investors. Why some domestic funds have a high turnover rate? They may be because they are not compared with the index, but compare with other competitors. If they pay too much attention to the short-term ranking, they will often lead to short-term investment behavior.

The entry of long-term capital will impose some changes on the short-term investment inertia, because the original strategy may further fail. (Editor: Zheng Shifeng)