Xiaojie HUANG spoke at the 13th China Capital Market Forum
Hosted by Finance and Securities Institute of Renmin University of China (FSI) and presided by Cheng Siwei, former Vice Chairman of the NPC Standing Committee.
At this forum, Jiuding Capital was the only private equity company invited to give a keynote speech. Jiuding Capital’s President Xiaojie HUANG expressed securities markets were worth to invest in the long run, but equity investment is more valuable currently.
He thought it’s too high when Shanghai Composite Index topped 6000 points, which should fell to a fair value. The value center of China’s stock market should be found out. Benchmarked against the value center, Chinese stock market will go into a state of panicky volatility if stocks fell sharply. After that, spring will eventually come.
He also believed that the securities markets are worth to invest in the long run. Although the inflation, state treasury bonds, long-term treasury bonds and corporate bonds in the US market have been increased tenfold, fifteen-fold, 44-fold and 61-fold respectively from 1925 to 1998, large-cap and small-cap stocks have risen 2351-fold and 5117-fold correspondingly.
There is less competition with respect to the investment on the secondary market. Investors can provide huge spaces for improvement for their companies with a lower equity price. For the above reasons, Jiuding Capital is very keen on equity investment.
Xiaojie HUANG said the investment philosophy of Jiuding Capital included following three parts:
1. Maximize micro investment rather than macro one, and care about corporate business mode and core competitiveness;
2. Realize the stages of development and see the long-term growth potential brought by China’s urbanization;
3. Understand the particularities of China’s economic system and the impossibility to outbreak the collapsing crisis within expected few years.
In general, Jiuding Capital aims to invest those enterprises with core competitiveness and growth potential under the background of China’s economy.