Snowball Special Issue 050: "12 Ways to Make Money"

Chapter 13 Across the Seven Markets, Buying Undervalued Targets
He Chun in Nanguo, individual investor, published time: 2014-12-30, Xueqiu APP download: http://xueqiu.com/r/2YviQn; published time:
http://xueqiu.com/2657407918/34663782
Last year, I wrote the annual summary four or five days ahead of schedule. Let’s make it one day ahead of schedule today. There will probably be too many heavyweight reports coming out on Snowball tomorrow.

Let’s talk about A shares first.

A-shares have been my shortcoming in the past few years, and the yield is not high.

This year is regarded as a turnaround for salted fish, mainly relying on two types of convertible bonds, ICBC convertible bonds and BOC convertible bonds.

I placed 80% of the heavy positions on these two, and basically invested all the funds in the domestic account. Not only that, but the leverage at the highest point was more than 160%, mainly because ICBC and Bank of China would not rise even if the holding expired. That is to say, the annualized repurchase interest is about 3.5%.There is no decline, and the maturity is more than 100 yuan.

Here I would like to thank @DAVID Freedom Road. Before, I only thought that there would be a bottom guarantee under the convertible bond and no cap on the top, but I hadn’t thought about opening a regular repurchase.After reading his blog and a series of articles on Xueqiu, I finally opened the buyback late last year and have been using this leverage until now.

I would also like to thank @东博老股民 and many other professionals on Xueqiu for their in-depth analysis of the bank.

Most of the funds obtained from the repurchase bought ICBC convertible bonds and BOC convertible bonds, and some bought a batch of bonds such as Sinovel, Xiang'eqing, Zhengbang Technology, Dehao Runda, and Baotailong around the Spring Festival this year. Basically, buy whatever bond has a high interest rate.

Later, Sinovel’s performance was astonishing, and many unexpected things happened, which once made me suspect that Sinovel’s bonds might default.

After much deliberation, clear all other junk bonds that have already made profits, and increase all positions to buy BOC convertible bonds and ICBC convertible bonds.

However, the bigger mistake is that the Bank of China Convertible Bonds and ICBC Convertible Bonds lowered their leverage a little earlier. Now the leverage has dropped to zero, but after the end of the leverage, the two companies still rose by nearly 10%.

In addition to ICBC convertible bonds and BOC convertible bonds, the holdings are Industrial Bank and a small amount of Wuliangye.

Industrial Bank's performance is remarkable.

Wuliangye is really unsatisfactory, far underperforming the market, which also reflects that my analysis before buying this company is clearly not in place, and I lack sufficient foresight for the industry's plight.At that time, there were still many people singing Maotai and Wuliangye on Xueqiu, but now there are very few voices.

The overall performance of A-shares has not been carefully calculated, and it is estimated to be similar to the broader market, because ICBC convertible bonds and BOC convertible bonds underperformed the broader market, but I added leverage, and in the first half of the year, all bonds bought through positive repurchase leverage also made profits. The balance between the two should be close to the broader market.

In addition to stocks, bonds and convertible bonds, new funds were repurchased, two tiered fund arbitrages and three stock index futures arbitrages.Classified fund arbitrage profit 9%, IPO profit 3% - 4%, stock index futures arbitrage profit 2%.This month, I re-purchased the bonds of Xiang'eqing, and my personal analysis shows that the risk of default is very low.

Tiered fund arbitrage is relatively timid, and then too many people did not dare to continue to do it, and missed the meat behind.Here I would like to thank @维草仙郎, he is the number one swordsman of grading funds on Xueqiu.

Overall, I am satisfied with the performance of A shares this year.

Looking forward to next year, if the most undervalued bank stocks in A-shares also perform crazy, only consider arbitrage and fixed-income products or completely withdraw from the A-share market.The bank I set for myself holding A shares is more than 1.5 times PB and more than 8 times PE.

回顾2007——2014年的反映A股全部市场表现的$中证全指（SH000985）$，2007年最高峰是5550点，现在的点位是4150点，离当年的泡沫最顶峰已经不远了。

To measure the premium index between A shares and H shares, there are currently only 6 companies whose A share prices are lower than those of Hong Kong stocks. It can be seen that most investors in the international market do not agree with the valuation level of A shares.

Let's talk about Hong Kong stocks.

The main account of Hong Kong stocks has entered Hong Kong stocks from the end of December last year until now, with a yield of 12%.No money comes in or out of this part, so it's easy to figure out the rate of return.The rate of return last year was 94.6%, and the rate of return this year is 35%.

Hold positions now:

$Chongqing Rural Commercial Bank (03618)$
$ Minsheng Bank (01988) $
$ CITIC Bank (SH601998) $
There is nothing to say about bank stocks. The reason for buying is simple. These three companies have lower valuations than A shares.

$Xinhua Wenxuan (00811)$
It has been two years since I bought it, and it has not moved, and the valuation is not high. I have been waiting for the catalyst for the A-share listing, but it has fallen a lot from the previous high.

$高力集团（01118）$$伟仕控股（00856）$2300澳科控股0032港通控股1888建滔积层板

The valuation is low, the dividends are good, and the holdings do not move. Let's see what catalysts will emerge in the future.

00912 SUGA INTERNATIONAL
This company has excellent performance, but under the background of the decline of the entire foreign trade processing industry, it may be difficult to perform well.

00336 Huabao International
Some holdings have been reduced, and the dividend yield is higher, but the valuation is already reasonable. If it rises in the future, it will reduce its holdings, and if it falls, it will increase its holdings.

1292 Changan Minsheng Logistics
The stock price of this company has not performed well, but I think the performance should not continue to decline, the oil price has fallen, and the logistics cost should be reduced.At the same time, Changan Automobile's sales are good, and it should not only have the current valuation.

350 warp and weft textile machinery
This is an arbitrage transaction, waiting for the final result of the privatization of the major shareholder.It's been half a year, and I think it's almost here.

2341 Zhongyi Fine Chemicals

The valuation is low, and the dividend is acceptable.Bearing the overall bad reputation of private enterprises in Fujian, the valuation has not been high.There are currently no obvious signs of cheating.

623 China Television Golden Bridge; 382 Welling Holdings
It is a pity for these two companies. They have already made huge profits, but only part of them have been sold, and now there are still some left in their hands.Since it has become an undervalued company again, continue to hold it.

0032 Dali Group
Low PB, high management integrity.If the land in Dongjiaotou, Shekou is successfully revitalized, it is expected that the PB will only be around 0.15 by then.

1189 Rosedale Hotel

The PB is low, and there may be stories in the follow-up.

133 China Merchants China Fund
I need to thank @黄建平哥哥 for buying this company. After his recommendation, I think it makes sense, which is equivalent to holding Industrial Bank and China Merchants Bank at a very low price.So buy, profit more than 40%.

1122 Qingling Motors
Buying this company is a little hot-headed. Although the PB is relatively low, it is not absolutely low. After all, the PE is relatively high. If there is a good price in the future, consider selling it.

367 Chuang's Institution International
Low PB, reasonable dividend
Several holdings have been emptied this year, including:
Anyu Asia
This arbitrage is relatively lucky, with a short-term return of 30%.

Canton Transportation

The valuation is relatively low when buying, and the valuation is reasonable when selling.

These two would like to thank @燕回来 for his recommendation. He is very good at researching undervalued varieties of Hong Kong stocks and digging out the value of shells.

Shijie Group Qinmeida Group

Although these two companies made huge profits, they did not grasp the timing of their sales and sold them a little later.When the valuation is relatively high, it should be withdrawn in time.It is difficult for such companies to have any special stories to tell, and it is unrealistic to expect to maintain a high valuation.

CNOOC
Although the company has a profit of 20%, it is quite thrilling.When analyzing the commodity market, seeing that coal prices have fallen sharply, and many domestic companies have launched large-scale coal-to-oil projects, they vaguely felt that the oil price was not good, and they all sold and cleared their positions at 15.8, avoiding disaster.

Anhui Expressway and Sichuan Chengdu-Chongqing Expressway

The Shanghai-Hong Kong Stock Connect has no expected effect, and the expressway companies can’t expect too much, so they are all cleared. Unfortunately, there is a slight increase after the clearing.

Lianda Technology Holdings
I don't know when the low PB will be cashed out, I don't want to wait any longer, and I will make a profit of about 15%.

Generally speaking, if Hong Kong stocks clear some stocks this year when the relative valuation is high, the return rate this year should be better.Remind yourself repeatedly in the future.

Hong Kong bonds
I bought the bonds of Hengsheng Real Estate with an annualized yield of 24% upon maturity, but unfortunately missed the bonds of Hengding Industrial with an annualized yield of 50%.

international market
Singapore

Sell ​​the Valuetronics holdings ltd. This company helps Philips and other big brands to do OEM. When you buy it, the valuation is only 3 times PE, and the PB is less than 0.6 times. It maintains a good return on equity for a long time.

Although listed in Singapore, it is actually a Hong Kong-funded enterprise.

Exited after a 50% profit, and now the price has dropped again.

Buy TAT SENG Packing group ltd.
Valuation is cheap, PE 4.2 times, PB 0.6 times, dividends are good.The disadvantage is that paper-making enterprises have a high debt ratio and unstable performance.

Korea
Empty all Korean stocks, because the valuation of Korean stocks is already high, and there is currently no suitable target.

All Korean stocks have achieved satisfactory positive returns, and I have mentioned all of these stocks on Snowball.

Japan
DENA underperformed with a 30% loss cleared.

Buying a technology company does take a lot of risk. Although the price-earnings ratio was less than 6 times when I bought it, the decline in the performance of game companies exceeded expectations.Looking at the high price-earnings ratio of the mobile Internet that was booming in A shares at the time, I felt that the valuation of my funds was so low at the time, and the companies with performance support felt that they had picked up a big bargain, but it turned out to be a tragedy.

Fortunately, other Japanese stocks are doing well.

Here are the Japanese stocks that are widely held:

7939Kensoh Co Ltd
There is no allotment of shares and no financing for the production of signal lights. The performance has been steadily increasing, and dividends have been paid for 4 consecutive years. The ROE is also not bad, and the debt ratio is slightly higher, but it is understandable in Japan's low interest rate environment.

The company performed well and doubled after buying it.

I don't know why it rose, but when I bought it, the price-earnings ratio was only 4.6 times, and the PB was 0.89 times.

7444Harima-kyowa Co Ltd
Dividends are paid every year, and the performance is very stable. It is mainly engaged in the wholesale and sales of daily necessities, and its performance expectations for this year are relatively positive.

When buying, PE is 5.8 times, and PB is 0.5 times.

5644 Metalart
An auto parts company with a low valuation at the time of purchase

4093
Slow growth, dividends in the last 2 years, gas production, cash flow is acceptable.

PE 5.8 times when buying.

In order to avoid the risk of a sharp depreciation of the yen, when buying, the yen is borrowed to buy, with an annual interest rate of 2%, which can hedge the risk of the rise and fall of the yen.

Australia
Briety Ltd.
This company has been on a rollercoaster ride, with a 50% rise that didn't give up, and now it's back to where it was.

Fortunately, its profit is still stable. Although Australia is severely affected by the downturn in mines, its municipal projects and other construction projects have good returns, and more importantly, the dividend return rate is 9%.

The current PE is 4.3 times.

马来西亚
Reinsurance company

MNRB holdings ltd.
The buying time is relatively short, the current PE is 5.1 times, and the PB is 0.6 times. The yield has risen steadily in recent years.However, due to the impact of the drop in international oil prices in the future, the valuation may further decline.

My personal situation is similar to @管我财兄, but not as rich as him.

A few years ago, I opened a factory in Shenzhen to export USB flash drives and MP3 players, and realized a little accumulation. Later, I found that companies with low valuations in the stock market were everywhere. Shut down money-losing businesses and invest directly in undervalued companies.So buying stocks is like investing in a company. Be cautious, beware of the other party being a liar, pay attention to the company's dividends and valuations, and don't chase concepts.In addition to arbitrage, only buy companies with low valuations, good dividends, and good performance.I have seen many listed companies acquire other companies, often with 5 times or 6 times PE acquisitions. What reason is there to buy companies with high valuations?Therefore, except for a very small number of companies with extremely low PB, the absolute upper limit of PE set for yourself is 8 times.

If I can achieve a steady growth in assets at a rate of 15% per year, I will be very happy.

(End of this chapter)