Chapter 362: Public Funds Take Shape
After the Spring Festival holiday, migrant workers began to leave their hometowns and embark on the road of working. In a sense, being able to work in the city where they were born is also a luxury.
On the first working day of the new year, Junshi Capital seemed very lively. The annual meeting that was not held last year has begun to be prepared this year.
Li Xinyu has begun collecting the annual meeting program in accordance with the planned annual meeting plan. This year it is bound to be lively.
February 15th, Monday, is the first trading day of the Year of the Monkey after a long holiday.
The severe decline in external markets during the long holiday also affected the opening trend of A-shares today. The Shanghai Composite Index jumped sharply downward to 2684.96 points, a drop of 2.92%.
The opening of the first trading session gave investors a warning and indeed a wake-up call, but the market had already expected a low opening.
The expected low opening did not make A-shares appear too panicked. After trading began, the Shanghai Composite Index did not continue to fall. The opening point of the morning session was the lowest position of the day. Non-ferrous metals and gold sectors performed well.
The ChiNext was the first to rebound, boosting market sentiment. From the perspective of the situation, it was relatively ideal. Although it opened severely low due to external factors, it was precisely this bottom opening during the bottom rebound that provided a lot of entry funds with the opportunity to buy at the bottom.
In terms of valuation, after several stock market crashes and de-bubbles, the overall valuation of A-shares is relatively low. The current average price-to-earnings ratio of the Shanghai Composite Index is around 13.5 times, which is still a relatively low figure from a historical perspective.
A low price-to-earnings ratio means that the risk is relatively low. Blue-chip stocks are favored by big funds, and once there is a chance to buy at a bottom, they are often not missed. In addition, the A-share market has already fallen sharply before the periphery.
The probability of a further sharp drop in the short term is not high. Ample room for rebound and undervalued blue chips are also important reasons why A-shares were able to quickly get rid of external influences today. A-shares have rarely developed an independent trend today.
Although the market failed to rise throughout the day, the Shanghai Composite Index still successfully stood above the 10-day line with a false middle-yang line trend, leaving enough room for a subsequent rebound.
It is rare that A-shares today were able to resist the influence of external factors and develop their own independent trend. From a technical point of view, the rebound trend of 2638 points has not been broken.
If the external stock markets continue to improve, A-shares will also rebound as expected, which will be a good thing for Junshi No. 2, which has a heavy position in it.
After all, in March, Junshi No. 2 will open for redemption again, and the rebound will take longer, so the management fee income will naturally be higher. Since the end of the closed period, Junshi No. 2 has become a semi-open fund.
Since 2016, Junshi No. 2 has opened redemption channels four times a year, once every quarter, one week after the last trading day of each quarter. As for the subscription channel, it is opened once a year, one week after the last trading day of the year.
The main purpose of doing this is to prevent the private equity fund from becoming too large. Private equity fund is only the first step in Gu Junhao's career, mainly focusing on accumulating personal connections. The first fund gained due fame, and the second fund also performed quite well.
Nowadays, Gu Junhao has accumulated a certain amount of personal connections in Ningbo and even in the surrounding Zhejiang Province. The last time Junshi No. 2 was subscribed, there were many clients from other places. The expansion of his personal connections has entered a very good stage.
Subsequently, as long as stable fund performance is ensured, this kind of personal connection can be maintained. Even if some clients have already withdrawn from the fund, it does not mean that contact has been lost, and opportunities for cooperation will continue.
As for the management fee charging standards of Junshi No. 2, Gu Junhao did not make any changes and still charged according to the previous charging standards. No management fee will be charged when the net value is lower than 1, 2% will be charged between 1 and 1.2, 3% will be charged between 1.2 and 1.5, and 4% will be charged above 1.5%, and profit sharing will begin to be charged.
The net value of 1 here is not 1 in the absolute sense, but is calculated based on the benchmark net value after the ex-rights, which is 4.196. For new customers who apply for subscription after the ex-rights, the profit generated on the fund with an application amount of 4.196 on that day will be used as the benchmark.
Simply put, for new customers, if they subscribe for 5 million yuan of shares on the day of opening for subscription, when they redeem the fund for the first time in March, if their shares are between 5.01 million yuan and 6 million yuan, a management fee of 2% will be charged. If the shares are less than 5 million yuan, no management fee will be charged, and so on.
Since it is a semi-open fund, the liquidity of fund accounts is relatively larger. Many customers may redeem their shares after redemption is opened due to their own capital needs or because Junshi No. 2's profits do not meet their expectations.
Therefore, taking into account the liquidity issues of customers, Junshi No. 2's performance this year will have to lower its full-year profit expectations accordingly. However, from the current perspective, it is not a big problem to maintain a management fee of more than 2% throughout the year.
Given the continued growth of Junshi No. 2, 2% management expenses is also a considerable amount. There is no problem in maintaining the normal operation of the company. In addition, the current proprietary trading performance is also quite good.
Gu Junhao is not too worried about the company's future profit-making methods. The main task this year is not to make profits, but to enrich the investment categories of Junshi Group and strive to take the company to a new level.
…
On Tuesday, when Gu Junhao was working in the office, Shen Boyu knocked on the door of Gu Junhao's office with a smile.
"Director Shen, is there any good news?" Gu Junhao couldn't help but ask when he saw Shen Boyu's happy expression.
"There is indeed good news. How about you guess what it is, Mr. Gu?" Shen Boyu replied.
"How would I know that? Is your wife pregnant with her second child?"
"Tsk, having a second child is not a happy event, it's the company's business."
What happy event in the company was there that he didn't know about? Gu Junhao couldn't help but be stunned, and then he reacted: "It's about the public offering fund?"
"Ah! Mr. Gu, you guessed it right. It is indeed a matter of public funds. There are some clues." Seeing that Gu Junhao reacted so quickly, Shen Boyu didn't keep him in suspense any more.
"I am in charge of the primary market myself. As for the fund division, what good news can there be with the A-share market in such a bad state? Apart from this, the only thing left is the public fund license issue that I asked you guys to inquire about last time. Tell me what the situation is."
After asking Li Xinyu to make two cups of coffee, Gu Junhao took Shen Boyu to sit on the sofa, ready to listen to what was going on.
"It's like this. After New Year's Day, there was a stock market crash. It has been falling for almost a month, and public funds have positions again. It just so happened that there was a small fund company whose active fund's net value had fallen below 100 million yuan, with a serious net loss..."
As Shen Boyu slowly explained, Gu Junhao finally understood the whole story. This pure stock investment fund named Small and Medium Cap Investment Mixed Selection had fallen below 100 million yuan in size after the stock market crash caused by this round of circuit breakers.
Moreover, a serious crisis of trust has arisen among investors. With investor redemptions and the halving of net value, unless there is a miracle, it is highly likely that this fund will meet the liquidation conditions required by the regulators.
Just like the forced delisting of stocks, public funds also have their lower limit conditions for liquidation, and it is not possible to fleece investors of management fees endlessly.
According to the operating conditions set by the fund industry regulatory authorities for public fund products, once the net asset value of a fund is less than 50 million yuan for 60 consecutive days, or the number of fund share holders is less than 200 for 60 consecutive days, the fund liquidation conditions will be triggered.
Shen Boyu continued, "This fund was not large to begin with and was established relatively late. Last year's first stock market crash plus redemptions basically wiped out its earnings."
"Although the portfolio was adjusted in a timely manner during the subsequent stock market crashes, the returns have recovered to a certain extent, but it can no longer withstand the various redemptions of fund holders. Coupled with the market crash, ordinary investors are avoiding funds even more."
"So the circuit breaker has helped us. Are they planning to sell it?" Gu Junhao said with a smile.
"Yes, although the stock market rebounded in February, the external environment is still unstable. Although their fund managers are optimistic about this rebound, the actual controller of the company is a little lacking in confidence and doesn't know if he can withstand it."
"That's true. The returns have been cut in half. No matter what the fund manager says, the actual controllers and investors will not buy it. If there is a rebound, their scale will not increase much. During the rebound, a large number of investors will definitely redeem their shares, so they will be forced to liquidate their positions."
"That's the truth. That's why the actual controller thinks that instead of passively waiting for liquidation, it's better to take advantage of the fact that someone wants to acquire it and sell it at a good price, so as not to suffer too much loss." Shen Boyu nodded.
"It's a rare opportunity. Director Shen, please continue the negotiation with them. You don't have to be too strict about the price. Anything under 200 million yuan is acceptable. Anyone who can get a fund license must have some connections. We can be considered to have made a good relationship."
"Okay, no problem, I'll arrange it right away." Shen Boyu nodded. Mr. Gu still has a broad mind. He did not think of lowering the price when the other party was in trouble, but instead acquired the company at a normal valuation.
This would be a better option for him. Gu Junhao did not ask Shen Boyu where he got the information. This was his personal connection and there was no need to inquire about it. It was already very rare to be able to use personal connections to contribute to the company.
It was originally thought that the acquisition of public funds would have to wait until the stock market really hit bottom in 2018, when investors in the entire market would have almost lost confidence.
There are many cases of individual stocks being cut in half at normal valuations. Most of the stocks in the Shanghai and Shenzhen stock markets with excellent performance and very high industry sectors are almost priced at rock-bottom prices.
The year 2018 can be described as the darkest time for A-shares since 2015. The Shanghai Composite Index once fell below 2,500 points. Many stocks could be bought with eyes closed, and it would be easy to double their value if held for one or two years.
In his previous life, Gu Junhao truly achieved his transformation in 2018. In the second half of 2018, market sentiment was low and stock prices deviated from normal valuations and were extremely low. At that time, Gu Junhao believed that an epic opportunity to buy at the bottom had arrived.
That year, except for not selling the house, Gu Junhao almost put all of his liquid cash into buying the A-share market at a cost that nearly bankrupted him. The best stock he bought was Zhongguo Software, which Gu Junhao bought at around 13 yuan that year.
Due to the almost crazy bottom-fishing, Gu Junhao had only more than 10,000 yuan in cash left during the Chinese New Year of 2018. He even had no money to pay for a new share he bought, and had to borrow money from others.
At that time, whether people were stock traders or not, when they learned about Gu Junhao's crazy behavior, they all seemed a little unbelievable. They thought he was playing with fire and that A-shares would continue to fall. Let's see how he would end up.
The trends in the following years also confirmed Gu Junhao's judgment at the time. 2018 was also the first year that Gu Junhao appeared on the Dragon and Tiger List as a retail investor. It can be said that this year was of great significance to Gu Junhao.
I didn't expect to get such good news on the second working day after the Spring Festival. After Shen Boyu left, Gu Junhao seemed a little excited.
As for whether the acquisition can be successful, Gu Junhao believes that it should not be a big problem. He has given a reasonable valuation and has no intention of taking advantage of the other party, while the other party also has the idea of selling actively. It can be said that this is a perfect match.
Even if a competitor appears and raises the price proactively, offering a price beyond the reasonable range, it doesn't matter, just give it to him.
For example, this fund, a mixed selection of small and medium-cap investments, will have the first one in the market after the circuit breaker, and there will definitely be a second one, and the Nth one. It is impossible that there is only this one. It doesn’t matter if the price is reasonable, but you can’t be a sucker.
"Small and medium-cap mixed selection? Haha!" From the name of the fund, Gu Junhao knew the reason for his loss.
It must be a misjudgment. People thought that small and medium-sized start-ups had fallen severely, so they wanted to buy at the bottom and then sell at a high price during the rebound. They changed stocks around the end of the first quarter or the beginning of the second quarter and took advantage of the rebound without anyone noticing.
This judgment based on the market is not a big mistake, but the fund manager obviously underestimated the significant impact of the circuit breaker on the market. Even if he had reacted quickly on the first trading day after New Year's Day and adjusted his portfolio and changed stocks, he would not have ended up in the current situation.
Although this time the fund manager judged that small and medium-sized enterprises would take precedence over the market rebound, and Gu Junhao also thought it would be so, based on his fatal operational error, which put a fund at risk of liquidation, it is understandable that the actual controller no longer trusts him.
If I were in his place, I would also stop trusting him. It doesn't matter whether he is right or wrong. If nothing unexpected happens, this fund manager has basically reached the end of his rope in the public offering industry. He almost single-handedly brought down a fund company. It would be difficult for people to accept him after making such a mistake.
Today's stock market trend seems to confirm the judgment of this fund manager. After rising 0.95% against the market yesterday, the ChiNext Index rose again by 4.02% today, closing at 2,200 points. Small and medium-sized start-up stocks rebounded across the board.
The Shanghai Composite Index also rebounded in retaliation, surging 3.29% to close at 2836.576 points, and successfully stood above the 20-day line. Affected by the US government's plan to spend US$19 billion to strengthen network security, the A-share network security sector rose across the board today.
Gu Junhao looked through the net value curve of this fund in recent trading days. Today's net value has not been updated yet, so it cannot be seen yet. However, both markets rose sharply today, so it should close in the green.
Judging from the past net value curve, the performance of this fund after the new year can be described as very bleak. Even yesterday it underperformed the ChiNext Index and ended in the red. Perhaps today's general rise in individual stocks will be its last glory.
Gu Junhao looked through his past holdings again. Although they were no longer of much reference value, he could still roughly see his stock selection direction. The individual stocks he held made Gu Junhao shake his head, as he actually included Baofeng Technology and Leshi.com.
"What a bunch of rubbish! They can't be the ones taking over, right? They don't deserve sympathy." Gu Junhao shook his head and muttered to himself.
