Good Companies Always Put Shareholder Interests First

Weekly Thoughts

I often see some companies introduce themselves as customer first, employee second, shareholder third. All companies that advertise this way are suspected of deception. The first to be deceived is the customer, and the second is the employee.

According to Article 57 of the Civil Code, a company is a for-profit legal person established for the purpose of obtaining profits and distributing them to shareholders and other investors. In layman’s terms, a company provides products or services to customers through employees and earns reasonable profits for shareholders. A company that always puts the interests of shareholders first is a good company.

Why are customers willing to pay the company? Because the company’s products or services meet their needs. Why are employees willing to work for the company? Because the company pays employees wages. The role of the company is to use the capital of the investors to organize employees to carry out labor and provide products or services externally.

In addition to customers, employees, and shareholders, there are also regulatory agencies associated with enterprises. Regulatory agencies are part of the state machine, exercising power on behalf of the state and levying mandatory taxes on companies.

For a company, providing products and services requires capital costs, raw material costs, employee wages, taxes, and other costs. The reason why there are still profits distributed to shareholders is that the company organizes individual individuals, exerts organizational effectiveness, and produces a wonderful reaction of 1+1>2. Therefore, to see if a company is a high-quality company, on the surface it depends on the dividend ability, but in essence it is the organizational ability, that is, the ability to achieve 1+1>2.

The company’s organizational ability is limited by the company’s decision-making bodies, namely the highest authority, the shareholders’ meeting, the highest decision-making body, the board of directors, the executive body, the management, and the supervisory body, the board of supervisors. Among them, the most important is the shareholders’ meeting. The shareholders’ meeting organizes the company’s operations by transferring shareholder interests to customers, employees, and public power.

Weekly Events

The Shenzhou 12 manned spacecraft was successfully launched, and China’s aerospace entered the space station era.

Weekly Market

Period: 2021-06-14——2021-06-19

4-week review: The three major indices all rose this week, mainly due to the surge in the whole market on Friday. It will still be in a volatile market in the short term. The top three wind industry gainers were shipping, soft drinks, and automobiles; the top three losers were chemical fiber, motorcycles, and petrochemicals. The top three wind concept gainers were participating in finance, Chengdu-Chongqing Special Zone, and smart grid; the top three losers were PTA, steel, and rare earth.

3-week review: The three major indices all rose this week, mainly due to the surge in the whole market on Friday. It will still be in a volatile market in the short term. The top three wind industry gainers were beverages, trade, and securities firms; the top three losers were office supplies, agriculture, and shipping. The top three wind concept gainers were photoresist, sodium-ion batteries, and yellow rice wine; the top three losers were shale gas, bicycles, and planting industry indices.

2-week review: The three major indices were stable this week. The top three wind industry gainers were beverages, fine chemicals, and trade; the top three losers were catering, power generation equipment, and shipping. The top three wind concept gainers were lithium battery electrolyte, lithium battery anode, and mobile phone battery; the top three losers were cement, gold, and Tibet revitalization.

1-week review: The three major indices were stable this week. The top three wind industry gainers were shipping, automobiles, and software; the top three losers were construction machinery, liquor, and forestry. The top three wind concept gainers were HarmonyOS Index, HMS Index, and Kunpeng Index; the top three losers were yellow rice wine, liquor, and OLE materials.

This week’s review: The three major indices were stable this week. The top three wind industry gainers were beverages, leisure, and automobiles; the top three losers were precious metals, oil, and chemical fiber. The top three wind concept gainers were third-generation semiconductors, IGBT, and semiconductor silicon wafers; the top three losers were PTA, animal health, and gold index.

Market (%)	Index	This Week	1 Week Ago	2 Weeks Ago	3 Weeks Ago
Shanghai Composite Index	3525.1	-2.38	-0.06	-0.25	3.28
Shenzhen Component Index	14583.67	-2.08	-0.47	0.12	3.02
ChiNext Index	3239.23	-1.41	1.72	0.32	3.82
Hang Seng Index	28801.27	0.22	-0.26	-0.71	2.34
HSCEI	1097.47	-1.92	1.0	-0.14	1.96
Hang Seng HK Chinese Companies	4048.17	-2.51	1.45	-1.61	1.37
Dow Jones Index	33290.08	-3.45	0.85	0.94	-0.51
Nasdaq	14030.38	-0.28	0.57	2.06	0.3
S&P 500 Index	4166.45	-1.91	0.69	1.16	-0.43

Market (CNY, Billion)	This Week	Previous Week	2 Weeks Ago	3 Weeks Ago
Shanghai Stock Connect	-50.05	24.04	45.46	300.9
Shenzhen Stock Connect	-89.79	5.27	43.41	167.24
Hong Kong Stock Connect	-24.16	-25.6	43.78	76.87

Positions

Code	Name	Dynamics of this Period
LKCO	Luokung Technology	Flat
F002083	Xinhua Xin Dongli Flexible Allocation	Increase
F166301	Huashang New Trend Flexible Allocation	Increase
F000978	Invesco Great Wall Quantitative Selection	Increase
F000311	Invesco Great Wall CSI 300 Index Enhanced	Increase
F005449	Huaxia Industry Leader Hybrid	Increase
F163406	Xingquan Herun Hybrid (LOF)	Increase
F001475	E Fund National Defense Industry Hybrid	New