Love Those Who Benefit the Country, Hate Those Who Harm It

Weekly Thoughts

During the lunch break on Friday, the Ministry of Foreign Affairs officially responded to the US imperialism closing our Consulate General in Houston. A-shares plummeted after the opening in the afternoon, but from a medium to long-term perspective, after 2 weeks of policy and technical adjustments, A-shares are returning from a “mad bull” to a slow bull. Short-term external interference will not change the slow bull trend. Just as A-shares were volatile at the beginning of the Sino-US trade war and were immune in the later stages, this wave of conflict between the two sides will also calm down soon.

This week, high-level officials presided over an entrepreneur symposium, reiterating that facing the future, we must gradually form a new development pattern with the domestic cycle as the mainstay and the domestic and international dual cycles promoting each other. And explained in detail why it is necessary to build a dual-cycle pattern “In the current external environment of rising protectionism, global economic downturn, and shrinking global markets, we must give full play to the advantages of the domestic super-large-scale market, add driving force to our economic development by prospering the domestic economy and smoothing the domestic cycle, and drive the recovery of the world economy. We must improve the modernization level of the industrial chain and supply chain, vigorously promote technological innovation, accelerate breakthroughs in key core technologies, and create new advantages for future development.” In addition, the speech revealed a lot of important information.

By the end of 2019, the total number of enterprises in the country was 38.58 million, while there were only 3,777 listed companies. The listing ratio of enterprises is one in ten thousand, and the scale of listed enterprises still needs to be further improved. Future IPO issuance will be the norm, and of course, delisting will also be the new norm. Only organic renewal can living organisms grow healthily.
Market entities are the main force for creating social value and solving employment. As long as the green hills remain, there is no need to worry about no firewood. Through the implementation of the Civil Code, the market entity status of enterprises and the status of entrepreneurs will be further established. The general tone of tasks in 2020 is “six stabilities” and “six guarantees”. Hangzhou and other places have begun to provide 10,000 yuan of free subsidies to small and micro enterprises and individual industrial and commercial households. It is expected that nationwide inclusive subsidies are about to begin.
Encourage the establishment of a cordial and clean relationship between government and business. We will wait and see if the bidding for new and old infrastructure To G businesses is fairer. Encourage entrepreneurs to start permanent businesses with perseverance, and make money domestically. Businessmen who transfer wealth abroad and are high-profile and unscrupulous should be careful. “Love those who benefit the country, hate those who harm it”. Of course, entrepreneurs running first-class enterprises well is patriotism, and there is no need to do superficial things like a certain waste recycling company in Jiangsu.
Encourage entrepreneurs to be explorers, organizers, and leaders of innovative development, be brave in promoting production organization innovation, technological innovation, and market innovation, attach importance to technological R&D and human capital investment, effectively mobilize employee creativity, and strive to build the enterprise into a strong innovation entity, and achieve rebirth from the ashes in adversity. Future financial subsidies are expected to be distributed more in the form of R&D subsidies.
Sincerity is the way of heaven; thinking of sincerity is the way of man. Euphemistically criticizing the entrepreneur group for being dishonest, and requiring enterprises to assume more social responsibilities.
Goertek, which participated in the symposium this time, is a smart acoustics foundry enterprise. In 2018, in order to solve labor and trade disputes, it transferred some of its companies to Vietnam. The company’s practices were affirmed, and the high-level horizons have gradually widened.
2021 is the first five years of the new journey of building a modern socialist country in an all-round way, which is of great significance. It is worth looking forward to whether the well-off bull will be upgraded to a socialist bull.

Weekly Events

Ant Technology announced the simultaneous listing of A+H, and the various capitals behind it began the road to cash out. The sudden wealth of the management brought about by equity incentives will also create a hundred billionaires in Hangzhou at one time.

Weekly Market

Period: 2020720-20200726

China and the United States closed each other’s embassies, and the Chinese and US stock markets fell generally. A-shares were imposing in early July, but faltered in late July. Although the market faces multiple uncertain disturbances, domestic policy fundamentals and liquidity will have downward support, and short-term disturbances will not change the upward trend.

Hot Industry Concept Board

From the perspective of Wind Level 4 industries, office supplies, real estate services, agricultural machinery, and auto retail were among the top gainers, while hotels, consumer goods distributors, and life sciences services and tools were among the top losers. This week, gold, north-south ship merger, and drones were among the top gainers, while stock trading software, OLED screens, Yangtze Memory, and lithium battery anodes were among the top losers.

Market (%)	Index	This Week	1 Week Ago	2 Weeks Ago	3 Weeks Ago
Shanghai Composite	3196.77	-0.54	-5	7.31	5.82
Shenzhen Component	12935.70	-1.37	-4.07	9.96	5.25
ChiNext Index	2627.84	-1.3	-4.18	12.83	3.36
Hang Seng Index	24705.33	-1.53	-2.48	1.4	2.39
HSCEI	982.32	-1.59	2.82	3.22	3.48
Red Chip Index	3957.15	-2.07	-4.76	4.37	5
Dow Jones	26469.89	-0.76	2.29	0.96	0.32
Nasdaq	10363.18	-1.33	-1.08	4.01	1.9
S&P 500	3215.63	-0.28	1.25	1.76	1.5

Shanghai-Shenzhen-Hong Kong Stock Connect

Market (CNY, Billion)	This Week	Previous Week	2 Weeks Ago	3 Weeks Ago
Shanghai Connect	-156.05	-51.01	137.32	177.38
Shenzhen Connect	-91.43	-140.15	144.76	111.24
Hong Kong Connect	139.13	154.41	292.06	130.36

Positions

Type	Code	Name	This Period Dynamic
Stock	SZ002241	Goertek	Open Position
Stock	ONTX	ONTX	Clear
Stock	OEG	OEG	Open Position
Fund	F210008	Golden Eagle Strategy Allocation Mixed	Open Position
Fund	F001351	Nuoan CSI 500 Index Enhanced	Open Position
Fund	F163115	Shenwan Lingxin CSI Military Industry Index	Open Position
Fund	F270010	Guangfa CSI 300 Index	Open Position
Fund	F260104	Invesco Great Wall Domestic Demand Growth Mixed	Open Position
Fund	F000566	Huatai-PineBridge Innovation Upgrade	Open Position
Fund	F320022	Nuoan Research Selected Stock	Open Position
Fund	F001692	Southern National Policy Power Stock	Open Position
Fund	F163415	Xingquan Commercial Front-end Load	Open Position
Fund	F519674	Galaxy Innovation Growth Mixed	Open Position