Exclusive Interview With Snow Lake Capital Ma Ziming: Good Company Can Withstand The Market Test And Has Continued To Increase Positions To Support YY

"It's also very good for the company's management to be short of 100% of the company's management." On the morning of November 19, Ma Ziming, founder and CEO of Xuehu capital, said in an exclusive interview with the 21st century economic report.

In the early morning of November 19, Hunshui, a well-known short seller, released a short report on the happy gathering era (YY) of China general stock company. According to the report, through the analysis of nearly 150 million transactions, it is expected that nearly 90% of the revenue reported for YY's live broadcast business in the era of happy gathering is forged data. Affected by this, YY shares fell 26.48%. Baidu, which just announced on the 17th that it would acquire YY's domestic business, fell 1.29% in response. The closing date was $136.20.

As YY occupies an important position in the position, Ma Ziming, as the head of hedge fund, was woken up by traders at 3:30 a.m. after knowing the relevant situation, he quickly chose to increase his position YY. He even said that if YY's share price continued to fall, he would not hesitate to buy again. This is not the first time that Ma Ziming has done so. In April this year, when iqiyi was short by muddy water, Xuehu capital, as a shareholder of iqiyi, also chose to increase its position.

"Muddy water in addition to this year rubbed a little lucky heat, short report quality in recent years are very poor." Ma said. From Anta to tal and iqiyi, it has been proved that the good company can withstand the test of the market, and the management does not care about the unreasonable harassment of short selling forces.

Don't pay attention to unreasonable harassment, the acquisition has strategic significance for YY and Baidu

"21st century": as a major shareholder of YY, how to view the muddy water short of YY?

Ma Ziming: first of all, we continued our interview in early April. I think this is another groundless harassment of China capital stock company by shorting forces. Muddy water first released a 36 minute video yesterday, and did not release a report, causing panic selling stocks. Later, the 71 page report was released, and there was no dry goods in it. I understand that it does this on purpose. It is groundless harassment, which the management does not care about or pay attention to.

Second, the quality of short reports in recent years has been very poor, except for the heat of lucky this year. From Anta before to tal last year and iqiyi this year, these companies have been shorted by muddy water, and their stock prices were affected at that time. But it turns out that good companies can withstand the test of the market, muddy water has been repeatedly "slapped in the face.". I think their shorting of YY will end up in the same way. Just as Zhu Xiaohu said in his circle of friends, "muddy water only dares to short YY in the second half of the night, otherwise he will surely be beaten all over the place looking for teeth.".

Third, in the face of short selling, we, as major shareholders of YY, continue to support it in real gold and silver. I was woken up by traders at 3:30 last night, and soon started to increase my holdings of YY shares by US $100 million. We are ready, if its share price continues to fall, we will not hesitate to spend hundreds of millions of dollars. We are very much aware of the value of the company at this stage.

21st century: on November 17th, baidu just announced that it would acquire YY's domestic business. Do you think the short report will affect the transaction?

This time of Baidu's kidnapping is interesting. But from an investor's point of view, I think this acquisition is very strategic for Baidu and YY.

For Baidu, it has a good Internet search mode, forming an Internet advertising ecology. Live selling is also a mode of Internet advertising, so it is entirely reasonable for Baidu to buy the head company of China's live broadcasting market to supplement its own Internet advertising promotion ecology, and the price is not expensive.

For YY, as an independent app, its development in China is facing more and more challenges, and it is reasonable to sell domestic business to Baidu. In fact, the rapid growth of YY's domestic business is mainly from 2012 to 2017, and it can be said that there is not much growth by 2019. Because the live broadcast needs the help of a larger traffic platform. On the premise of delivering traffic to it by the large platform, the live broadcast of Shuo Yin, Kuai Shou and Taobao are all well done. If YY's domestic business is merged into Baidu, it can also enjoy the traffic dividend brought by the big platform.

Meanwhile, YY's overseas business bigo is still developing at a high speed. Compared with the same period last year, YY's overseas business grew by more than 100% in the third quarter of this year. The overseas market it faces is very potential. It is a valuable long-term strategy for YY to convert domestic business into cash and continue to invest heavily in developing overseas high growth business.

In the post epidemic era, we focus on the offline economy, and the future performance may exceed market expectations

21st century: under the influence of Sino US trade frictions, new crown epidemic and short selling, how to evaluate the market performance of China capital stock company this year?

Ma Ziming: in April this year, due to the impact of Sino US trade frictions and auspicious financial fraud, many people in the market said that it was the dark moment for China capital stocks. But now looking back, there is no dark moment at all. Ruixing incident is only a very rare event. Most of the China capital stock companies have not been affected, and their performance is very good, including the newly listed shell and ideal automobile. We also participated in some high-quality IPOs.

Secondly, many high-quality China capital stock companies have been successfully listed in Hong Kong for the second time, and we are deeply involved in it. For example, Huazhu, New Oriental, Netease and Yum (China) have been their shareholders before, and we also participated in a large number of them when they came to Hong Kong for secondary listing. The secondary listing is very good for China capital stock companies, because even if there are big changes in the US stock market, it has already opened up a second channel in Hong Kong, which makes us feel more confident. Therefore, this is a very important step for the market this year.

21st century: from the early spread of the epidemic to the gradual control of the epidemic, whether the investment portfolio of Xuehu capital has been adjusted, and how to predict the investment opportunities of next year?

Ma Ziming: in the first half of this year, the stock trend of Companies in the digital economy was very good, which was warmly welcomed by the market. At first, the traditional economy was still greatly affected by the epidemic, but in fact, the epidemic situation in China has been controlled very quickly, and the traditional economy has been well recovered.

Therefore, we did not blindly pursue the online economy. Instead, after July and August, we increased investment in the traditional economy, including consumption, offline education and Macao's gambling industry. For example, we are already the third largest shareholder of MGM China (Stock Code: 02282). We are optimistic about these offline economies for a long time and feel that its business will recover.

Looking forward to 2021, we believe that the performance of the offline economy is more likely to exceed market expectations. For example, we invested in Huazhu. In September, its single room income has exceeded that of the same period last year. This is very difficult. No hotel in any country in the world can achieve the current business data surpassing the same period last year. However, Huazhu has achieved it, which is the potential of offline growth.

China's market is optimistic for a long time, which may attract more international capital in the future

21st century: in an interview in April this year, you thought that the global economy would be greatly "drained" under the influence of the epidemic, and it was true later. Now, what are your predictions on the future trend of the global economy, and what will be the impact of fiscal and monetary policies of various countries on the capital market?

Ma Ziming: I will be more cautious, because now, a large part of the flood discharge wave has been completed. We are still buying some good companies, but we will be more cautious and slow down the pace of investment. But that doesn't change our long-term optimism about China for three to five years. We are also looking at some new tracks recently, including new infrastructure and health care.

At present, the uncertainty of global capital market is still on the high side, and the impact of the epidemic situation in Europe and the United States on the real economy continues. Now everyone is looking forward to the vaccine, but there is still a lot of uncertainty about the actual large-scale use.

At the same time, due to the significant anti epidemic effect, China's online and offline recovery is very good, China's capital market is the most certain, we will long-term optimistic, long-term heavy positions. I think there may also be more international capital pouring into the mainland and Hong Kong markets.

21st century: what are your latest promising long-term investment targets in the Chinese market?

Ma Ziming: We recently jointly invested with Tencent in the primary market of xinruipeng pet hospital. Tencent invested 100 million US dollars and we invested 50 million US dollars. This is also the first time in five years that we have invested in the primary market and we are very optimistic about it.

21st century: we can see that Xuehu has completed the investment in simpcare ximuyuan, a domestic skin care brand, this year. Will the expansion of investment into the primary market be the normal situation of Xuehu?

Ma Ziming: it's not normal. The standard for us to invest in the secondary market is already very high, and the standard for the company to invest in the primary market will be higher. We think we are very lucky to meet once in three or five years.

The track of pet market is optimistic for a long time, but we found that there is no special good target for us to invest in listed companies, so we invested in xinruipeng in the primary market. Even if xinruipeng is listed next year, we will not sell it, which is different from the mentality of ordinary primary market institutions. When we invest in a company in the primary market, we may also be the cornerstone investor when it goes public, and then carry out long-term holding for five or ten years. I just moved the term of long-term holding forward by 6-9 months.

We will continue to focus on our secondary market investment, just want to expand the region from China to Korea and Japan, and Southeast Asia will also actively look at it. Snow lake set up the Pan Asia Fund in 2018, and its performance is also very good, with an annualized return rate of more than 25%, and its scale is now close to US $1 billion.

21st century: in the new infrastructure, medical and health track, what is the current layout of Xuehu capital?

Ma Ziming: in the field of new infrastructure, we have built a very large position in the company of data center. In the medical and health field, we are still actively studying. We think the overall valuation is a little expensive, but we are very optimistic about the trend.

In addition, the property management sector is also our long-term very optimistic. Although the market sentiment has been a bit stressful recently, we are not worried at all. We have made four cornerstone of property management in a short month. In particular, we have made the cornerstone of rongchuang. We agree with the management team of rongchuang. This time, the lineup of cornerstone investors is also very luxurious. It is very difficult for you to see Tencent and IDG capital