After the A-share market entered July, I first wrote an article "Review of the 15-year comprehensive bull market and response strategies", which comprehensively reviewed the process of the 15-year comprehensive bull market of the A-share market.

The 15-year bull market was a leveraged bull market, and it was all done by our own people. At that time, foreign capital had not yet entered the A-share market.

But foreign capital is deeply involved in the market in 2020? It has completely different characteristics from the 15-year bull market.

Based on the new characteristics of the market, I proposed a layout of three major long-term bull funds + four major logics. The advantage of this layout is that regardless of whether there is a comprehensive bull market or not, the intrinsic value improvement brought about by industrial development and performance growth is certain.

1. Looking at the market in the past two days, performance-driven is the main theme. Yesterday, A-share building materials stocks led the market's rise. Conch Cement, which is heavily owned by Hillhouse Capital, is close to the daily limit. The market is not rising for no reason. The main reason is that the industry's

The company, Beixin Building Materials, released a revised performance announcement for the first half of the year last Wednesday, exceeding market analysts' expectations.

The valuation of BNBM Building Materials is relatively low, just like that of Conch Cement. Due to the impact of the epidemic and heavy rains in the first half of the year, the construction industry needs to rush to work in the second half of the year. There is a huge demand for building materials, and there are expectations for substantial growth in performance.

In addition to Conch Cement held by Hillhouse Capital, the market value of China Building Materials in Hong Kong stocks is only 1/4 of Conch Cement, which deserves investors' attention.

If we only look at the cash flow from operating activities, Conch Cement and China National Building Materials are almost the same. This is just because China National Building Materials has a large amount of depreciation due to historical reasons, and its financial expenses are relatively high, resulting in lower reported profits.

A-share pharmaceutical stocks led the market in gains today, mainly because WuXi AppTec, the leading domestic CRO, released its semi-annual report. Net profit increased by 62%. The first-quarter performance was affected by the profit, and the second-quarter performance increased significantly.

Fast,? It exceeded market expectations, so as soon as the market opened? Pharmaceutical stocks were driven by positive performance, driving the stock price of the entire sector to rise.

Judging from yesterday's and today's market performance, it is still sector performance that drives the stock price rise, and it is still based on performance. It is not the random rise like in 2015, where the sharp rise was followed by a sharp fall.

2.? Yi Nuoqing, who is responsible for Hillhouse Capital’s biomedical investment, has a view on the future pharmaceutical market. The current valuation of pharmaceutical stocks is generally relatively high. Yi Nuoqing, who is responsible for Hillhouse Capital’s biomedical investment, said something about the current pharmaceutical market in the A-share market.

Overall view on valuation: From the first day we invested in Chinese biopharmaceuticals, we probably had such an expectation. On the one hand, like the Internet 15 or 20 years ago, countless scientists returned to China to start businesses and develop this industry, like

The Internet is also gradually going global.

We also believe that China's biomedicine will be similar to Huawei's 15 or 20 years ago, and can benefit billions of other people in developing countries with a very high cost performance.

Adding up these aspects, this wave of biopharmaceutical market conditions, if everyone looks a little further, gradually extends the future time, and discounts come back, it can support the current wave of market performance.

Hillhouse has been adding positions in the pharmaceutical field and has almost never withdrawn.

Can you share with you your experience with exit?

Yi Nuoqing: We have a lot of investments in China's A-shares, the Hong Kong market, and the US market. However, in the field of biomedicine, we have been constantly increasing our positions and have almost never withdrawn.

My view on medicine and consumption in the future is that even if the valuation is slightly high, there is a high probability that it will not plummet. Performance growth will drive down the valuation. Just like WuXi AppTec’s TTM PE dropped as soon as its results were announced and entered the next downward trend.

It’s time to watch Forward PE in half a year.

3. Tomorrow, the Science and Technology Innovation Board will usher in a wave of lifting of bans, which will have a certain impact on the Growth Enterprise Market. Tomorrow (July 22) the Science and Technology Innovation Board will celebrate the first anniversary of its opening, and the biggest wave of A-share lifting of bans in the second half of the year will also come at the same time.

The scale of the lifting of the ban in the week of July 22 to July 26 will reach the weekly lifting peak of 264.4 billion yuan, and the market value of the lifting of the ban in July will hit the fourth level in the past 10 years.

At the same time, the valuation of the Science and Technology Innovation Board is very high, which will have a relatively large impact on the A-share market. Western Superconducting, Three Squirrels, Vail, Microwave, Montage and other stocks need to be most vigilant about risks.

If the Sci-Tech Innovation Board stocks experience a price drop due to reductions in holdings, the GEM may also be implicated: the Sci-Tech Innovation Board implements a registration system, and the scale of future financing is expected to increase significantly. If the Sci-Tech Innovation Board faces the pressure of large-scale selling this time, the Sci-Tech Innovation Board will

The board index has declined, and investors are expected to be worried that the GEM, which will also implement a registration system for large-scale financing in the future, will also affect the performance of the GEM.

4.? Missed a high-quality fund. Although the overall performance of the three long-term bull industry funds I recommended was not bad, I missed a good fund, and it was off-market. This fund includes: Hong Kong Stock Exchange, Tencent, Wuliangye, Kweichow Moutai,

Meituan-Dianping, WuXi Biologics, and AIER Ophthalmology have positions as high as 72%. The companies here are basically companies in the Hillhouse Capital track layout.

?The content described in this article is for reference only and does not constitute investment advice.