Rebirth of the Capital Legend

"That's right." Zhang Wei nodded and said, "A pause in the trend and a re-consolidation of the chip structure may indeed be more conducive to the subsequent market trend. On the contrary, continuing to resist the selling pressure of profit-taking and continuing to attack aggressively will over-consume market expectations and sentiment. This will lead to a serious lack of buying power after expectations and sentiment are overdrawn. Therefore... being pessimistic about today's trend does not mean being pessimistic about the subsequent market trend. In fact... I am still relatively optimistic about the subsequent market trend."

"As long as the industry fundamentals are turning around and there's support from underlying logic, a breakout in the trend should be inevitable sooner or later," Liang Jiucheng said. "Currently, with support from the three core sectors of major infrastructure, the new energy industry chain, and the smartphone industry chain, as well as the expected long-term recovery of the liquor and white goods industries on the main board's weighted stocks, it feels like the market's most difficult times are indeed over."

"Of these three core themes, the 'big infrastructure' theme should be the one that's reaching the performance realization period of a reversal in industry fundamentals, right?" Zhao Zhiyuan said. "It seems that the other two main sectors are currently anticipating a reversal in industry fundamentals, but the actual situation of the entire industry reversal has not yet reached a clear turning point, let alone the performance realization period. Relatively speaking... the certainty is not as strong as that of the big infrastructure theme.

Of course, the liquor, white goods, and petrochemical sectors.

It is true that with the recovery of consumption, a long-term breakthrough trend has emerged.

The liquor sector, in particular, seems to have completely emerged from the quagmire of the past few years. No wonder Huayi Capital, headed by President Su, has invested tens of billions of yuan in the liquor sector. This sector, now facing a general reversal within the industry, does seem to be on a long, steep slope.

"Indeed, Qianzhou Moutai, a core weighted stock in the market, has now become the valuation and pricing anchor for all consumer stocks and other weighted stocks with a consumer-oriented nature in the two markets," said Zhang Wei. "The performance of this stock is extremely important to the overall market trend."

Zhao Zhiyuan said, "Based on future expectations, it's probably still a good idea to buy Qianzhou Moutai stock, right?"

Liang Jiucheng responded, "Of course you can continue buying. The current valuation of Qianzhou Moutai is still within a relatively reasonable range. However, I think it's unlikely to achieve any excess returns from this stock. Most likely, you'll only earn from performance driving up the valuation, and then the valuation driving up the stock price. However, this investment method is more like an institutional approach. We don't need to emulate it, right?"

"Lao Liang..." Zhang Wei said, "Didn't you say before that the overall investment trend in the current market has completely changed? Has it shifted from the previous market speculation dominated by hot money to value investment dominated by institutional funds? If we consider this trend change, there shouldn't be any problem in emulating the investment ideas of institutions, right?"

"I did say that the overall investment approach in the current market has changed significantly compared to before," Liang Jiucheng said. "But it's not a shift from short-term concept speculation to value investing. Rather, current market speculation requires a relatively certain anchor, namely the expectation of a reversal in industry fundamentals and earnings growth. The current market... is more inclined towards growth stocks."

"Well, the preference for growth stocks is quite obvious," Zhao Zhiyuan said. "The core leading companies that have emerged recently have shown strong performance, and the stocks with strong combined support from institutional investors and speculators are indeed dominated by growth stocks, such as Oriental Yuhong and Lixun Precision."

"That's true." Zhang Wei nodded slightly, paused, and then continued, "Lao Liang, Lao Zhao, do you think the current trend of 'Lixun Precision' stock is somewhat similar to that of Oriental Yuhong? Moreover, the trend of this stock is more stable and more obvious than that of Oriental Yuhong, and it is somewhat independent of the trend of other Apple industry chain stocks.

As for the chip structure of this stock, it seems to have been locked in quite well.

Even in previous rounds of stock market crashes, there has never been such a large-scale extreme increase in volume.

It seems that there has been a large institutional fund locking up this stock, and the holding trend is long-term.

Moreover, looking at its recent K-line trend, it feels too similar to the aforementioned Oriental Yuhong. I always feel that Mr. Su's "Huayi Capital" has also increased its holdings in this stock.

Of course, there was no Dragon and Tiger List data for this stock before.

Therefore, there is no definite evidence to prove that Mr. Su's "Huayi Capital" institution has intervened.

There are also two stocks: Dahua Technology and Hikvision.

The market popularity of these two stocks has not been very high, but this does not prevent them from quietly rising by nearly 60% in recent months.

Moreover, the K-line trends of these two stocks are somewhat similar to those of Lixun Precision and Oriental Yuhong.

Moreover, there is no trend of increasing volume, and the internal chips are also very well locked.

The similar market trends of so many stocks make people think more.

If it's as I expected...

Mr. Su's Huayi Capital has indeed invested heavily in these stocks, so the subsequent market trends, overall market trends, and the direction of the core stocks that lead the market are worth studying.

"Old Zhang, I think your guess is reasonable," Zhao Zhiyuan said. "The trends of these stocks are indeed very similar. And have you noticed that these stocks are basically concentrated in the major infrastructure, new energy industry chain, smartphone industry chain, and the two major sectors of liquor and white goods? Basically, they encompass the core themes with the strongest current market trends and the best future prospects."

Liang Jiucheng nodded slightly, pondered for a moment, and said, "That's right. I have to say, Mr. Su's investment vision is really accurate. He saw at a glance the first few core themes of the market reversal."

"That's not the case," Zhao Zhiyuan said. "Look at Huayi Capital's massive buying spree and increased holdings in the new energy industry chain over the past two days. Mr. Su didn't completely anticipate the market. I remember that Huayi Capital, previously headed by Mr. Su, had always held heavy positions in a number of leading stocks in the new energy industry chain, right? Until the first quarter, when this firm began to reduce its holdings.

If you look at it now...

In fact, the institution "Huayi Capital" is headed by Mr. Su.

There should not be many chips in the new energy industry chain, and the holding costs are basically relatively consistent with the large amount of funds that intervened after the sudden good news was announced last Friday.

In other words, Mr. Su also made mistakes in his judgment of the trend of the new energy industry chain and its subsequent expectations.

He probably didn't think about the subsidy policy for the new energy industry chain next year.

It will come out so early.

I didn't expect it to be announced so suddenly in this form.

As a result, the institution he headed, Huayi Capital, did not have sufficient time to react and increase its holdings on a large scale.

Of course, Huayi Capital, as an institution, currently does not have a large-scale holding in the new energy industry chain, or rather, it has a serious shortage of shares.

I think it is actually beneficial to the new energy industry chain, and the subsequent market trend will further ferment and even reach higher heights.

After all, in the subsequent market trends.

It can be said with certainty that the institution "Huayi Capital" headed by Mr. Su will most likely continue to increase its holdings on a large scale in the new energy industry chain and take back the chips that were previously sold off.

Everyone should be able to see the overall influence of this institution in the market.

This organization is deeply involved.

And in terms of holding costs, there is no general difference with everyone else.

The group of funds willing to follow this institution and follow the trend to go long is likely to be much larger than the previous major infrastructure main line, as well as the liquor and white appliance sectors.

Moreover, after the sudden announcement of favorable policies.

In fact, the new energy industry chain is basically open.

Everyone should have anticipated that the expectations and performance of the new energy industry chain will reverse next year, and the scale of industry demand will increase significantly.

Therefore, at the current stage, no matter what the short-term trend of the new energy industry chain is.

Expectations are certainly sufficient.

Certainty, and certainly sufficient.

Considering these factors, I think that the new energy industry chain has already occupied a position in the main line of large-scale infrastructure and has become the strongest core line in the current market.

In addition, the related stocks along this line have obviously greater room for flexibility.

No matter how much housing prices rise, as they are already at a high level, there will always be a limit and a ceiling.

But what about the current new energy industry chain? Everything is still in its initial stages, and everything is still nascent. No one can accurately predict the future industry space, but everyone knows that the future industry space is extremely large, and it is certain that this is a trillion-dollar market with demand.

With such expectations...

Then, the industry valuation level of its related stocks will be raised very high.

And if the subsequent performance can be delivered.

"It's very easy to see a Davis double-click scenario, whereby valuations rise while performance also improves. When this happens... the stock price doesn't just double, it could easily increase by 10 times or even dozens of times."

"Ten times, or even dozens of times?" Zhang Wei was surprised and said, "Old Zhao, you're really bold. Based on the current market capitalization of Ganfeng Lithium and Tianqi Lithium, a tenfold increase would mean they would be worth around 10 billion, right? Does that seem realistic?"

Liang Jiucheng chuckled and said, "If market liquidity is sufficient in the future and the market can form a bull market trend, I think it is entirely possible. In terms of the expected output value and growth potential of the entire new energy industry chain in the future, there will definitely be many companies with a scale of hundreds of billions, or even trillions of yuan. However, at present... it is hard to say which companies will truly emerge in the future."

"Even if we can achieve this, the time span is quite long, isn't it?" Zhang Wei said, "Do we really need to study such a long market cycle and the time span of performance industry development?"

Liang Jiucheng said, "It never hurts to have some understanding and take a long-term view. However, when it comes to trading, it definitely depends on the specific market feedback and the actual market trends of the corresponding individual stocks."

"That makes sense." Zhao Zhiyuan nodded slightly.

Liang Jiucheng paused and continued, "Judging from the current market trends and market feedback, even though the new energy industry chain has seen significant divergence today and needs to withstand significant short-term profit-taking selling pressure, it should still be the strongest main trend sector in today's market trends. If you want to trade, I think you should first choose this sector and the corresponding stocks in this sector."

"I don't think there's much doubt about this," Zhao Zhiyuan said. "Right now, it's a question of target selection. Should we lean more towards small and mid-cap stocks, like Tianci Materials and Do-Fluoride, or towards Ganfeng Lithium and Tianqi Lithium, the two stocks in which President Su has explicitly invested? Or should we focus on the complete vehicle sector or the auto parts sector? Which of these related new energy industry chain sectors do you think has the greatest potential for explosive growth? Which ones can most consistently form consistent expectations and generate higher levels of hype?"

Zhang Wei said, "Overall, if you want certainty and flexibility, I think it's safer to follow Mr. Su's stock holdings. After all, not to mention Mr. Su's influence and guidance on other groups of follow-up funds in the market, his stock selection ability is naturally top-notch. Generally speaking, there are rarely any pitfalls in the target stocks selected by Mr. Su, not to mention the current market capitalizations of Ganfeng Lithium and Tianqi Lithium. "

"Okay," Zhao Zhiyuan said, "Then let's do as you say, Old Zhao. Let's buy Ganfeng Lithium and Tianqi Lithium first."

After saying that, Zhao Zhiyuan turned his attention back to the two market charts.

At this time, the market trading time had reached 9:25.

After ten minutes of continuous call auction, the market officially opened.

After a sustained pre-market auction, the major themes and related industry sectors in both Shanghai and Shenzhen stock exchanges now appear completely different from those at 9:20 AM and 9:15 AM. (End of Chapter)