I've blocked him. ”
On June 28, Zhang Xiaolong, CEO of Chalk.com, who often scares about the sky, went crazy in the circle of friends again.
At that time, he complained that a certain bigwig who claimed to be a value investor said that investing in education was for public welfare, and at the same time he was selling **.
"Stay away from people who pay lip service to value investing, especially those with the surname Zhang. ”
Although it is not named, the picture accompanying this passage is a book called "Value", and the author of this book is Zhang Lei, the founder of Hillhouse Capital.
So, is Zhang Lei really like Zhang Xiaolong said, saying one thing and doing another?
Is the concept of value investing that he insists on "pseudo-value"?
This time, Zhang Lei, known as the "godfather of investment", really fell off the altar?
In 1972, Zhang Lei was born in a dual-income family in Zhumadian, Henan Province, his father worked for the local foreign trade bureau, and his mother was a lawyer.
A good family environment has allowed Zhang Lei to have enough freedom and independence since he was a child.
China in the early eighties was full of openness, romance and liberalism.
And Zhang Lei in his childhood, the most important thing in his mind was how to play.
In primary school, Zhang Lei's academic Xi grades were mediocre, and when he graduated from primary school, he was only 1 point higher than the admission line and was barely admitted to junior high school.
After entering middle school, Zhang Lei still didn't like school work, but he loved to read all kinds of books, which also made him gradually realize that deep thinking, logical reasoning, and careful decision-making are so interesting.
Zhang Lei's home is next to the Zhumadian Railway Station, and he often sees passengers waiting for trains or stranded on the platform doing nothing to pass the time.
Zhang Lei, who had a keen mind, began to think about business in his heart.
He thought that if books and magazines were borrowed or sold to passengers waiting at the train station for a fee, it would be very popular.
So, he pulled up a team from his classmates, and even started a "mobile service" on the Beijing-Guangzhou line, which also made a lot of money.
But using his spare time to make a small fuss at the train station is not a destination after all, Zhang Lei, who is well-read, finally woke up one day:
He wants to get a better education, he wants to go to a bigger world, he wants to live a more rewarding life.
So, he decided to start studying hard in his last year of high school.
Once he recognized the reality, he did not hesitate, and since he was a child, he was gifted and intelligent, and he was always a blockbuster if he didn't make a sound.
In the fall of 1990, Zhang Lei was finally admitted to the International Finance Department of Chinese University with the top results in liberal arts in Henan Province.
After entering the university, Zhang Lei especially likes to participate in various practical activities, and his first practical activity is to do market research for Beijing Television Factory.
In order to obtain more core and authentic information, Zhang Lei went deep into rural areas and third- and fourth-tier cities to understand consumers' purchase motivations.
In the end, this "down-to-earth, distinctive, and realistic" research report won the "special prize" of the school's practical activities.
Graduation is approaching in the blink of an eye. In those days, finance students mostly favored bank jobs after graduation.
Zhang Lei was also confused, but with his unique vision, he finally bypassed all financial institutions and chose to join China Minmetals Group.
He hopes to go to the real economy to find the most fundamental things that support financial activities.
During that time, he often traveled to various mining areas in the north and south of the river, and in the first year of work, he went to more than a dozen provinces.
A hard errand in the eyes of others is an opportunity in Zhang Lei's eyes.
He took out the energy to participate in research activities in the university, visited the grassroots, observed the society, and felt the customs, and it was this experience that made Zhang Lei understand that China has too vast territory and the most complex society.
This also makes him spend a lot of time studying the real consumption demands of ordinary people at the grassroots level in his future investment decisions.
Because he often deals with foreign customers, Zhang Lei also had the opportunity to come into contact with the Western world, which gave him the idea of going further afield.
So, after working at Minmetals for four years, Zhang Lei quit his job and went to Yale University in the United States to study for an MBA.
Since Yale only offered first-year scholarships, in order to earn tuition, Zhang Lei, who was not wealthy, had to apply everywhere.
But every time he went in high spirits and returned dejectedly.
Once, he was interviewed by a Boston management consulting firm, which was a good recognition of his past studies and abilities.
In the face of this excellent opportunity, while rejoicing, Zhang Lei had words of suffering.
In the past, it was common practice for job seekers to pay for their own transportation expenses and then find a recruitment company for reimbursement.
But Zhang Lei was shy in his pocket, and he couldn't even get the round-trip travel fee.
So he found another way and applied to the other company for an advance of the round-trip fare.
This idea actually made the interviewer a little curious, and they also wanted to see how the young man with this strange idea would finally show his strength in the interview.
But the interviewer was disappointed.
When asked about how many gas stations should be in a given area, Zhang did not follow the conventional way of thinking.
Another question on his mind was, "Why do you need a gas station?"”
So, Zhang Lei told the interviewer his rhetorical questions and analysis. As a result, Zhang Lei was rejected again
Although he missed out on job opportunities and did not embark on the typical career path of an MBA student, this honesty and courage from the bottom of his heart later helped Zhang Lei open the door to enter the investment world.
On the eve of graduating in 2000, in search of practical Xi opportunities, he stood outside the Yale investment office.
The interviewer at the time was David Svensson, chief investment officer at Yale University, a legendary investment giant on a par with Warren Buffett.
In that interview, Zhang Lei couldn't answer most of the questions, and the sentence "I don't know" made him lose confidence, and he knew that he was likely to be politely kicked out again.
Unexpectedly, he was hired as a Xi student donated by Yale University, officially stepping into the threshold of the investment community.
Years later, Zhang Lei asked David Svensson why he was admitted to be his **, and Svensson gave the answer - very simple and honest.
And Zhang Lei, who has a "simple" mind, only recognizes one thing on the road of investment: as long as you have investment value, I will not hesitate to spend money.
The first thing Zhang Lei did at any cost was to invest in Tencent.
In 2001, "Little Superman" Li Zekai saw the prospect of Tencent, so he urgently withdrew his capital and sold his 20% stake in Tencent.
This move also aroused the concerns of other investors, which directly led to a heavy setback in Tencent's capital chain, and Tencent was once on the verge of bankruptcy.
Ma Huateng wants to sell the company, 3 million, which is his psychological floor price.
But after looking for investors in the industry, no one took over, and those people either bid too little or are not interested at all.
Ma Huateng continued to work hard and struggled to support, but until 2004, after Tencent was listed in Hong Kong, its profitability was still very weak, and the stock price was at a low level of about 5 Hong Kong dollars for a long time.
At this moment, Ma Huateng has come up with a new profit model, but it takes a lot of money to start a new business, and with the current profitability of Tencent, it is impossible to raise capital at all.
Ma Huateng was at a loss, and Tencent once again fell into the quagmire of operation.
However, Zhang Lei's visit brought a turnaround to Tencent.
At that time, Zhang Lei was still unknown in the capital world, and the start-up capital he brought back to China from his mentor David Swenson was only 30 million US dollars.
So when Ma Huateng saw Zhang Lei, he thought he would invest at most $1 million.
But Ma Huateng never dreamed that Zhang Lei listened to his idea and made an extremely bold decision: to invest all the $30 million in his hand in Tencent!
For a time, doubts and ridicule were overwhelming, and everyone said that he was too risky.
But Zhang Lei has his own ideas.
When he inspected the Yiwu Small Commodities Market, the business cards handed by those small merchants and vendors were printed with the QQ number on an equal footing with the ** number.
He understands what these numbers mean.
Just when the salty sea breeze on the Internet was blowing, Zhang Lei had already smelled the waves behind the sea breeze.
Zhang Lei's investment in Tencent has proved to be very successful, and Hillhouse Capital has received at least more than 200 times the return.
This battle also made Zhang Lei famous in the investment world.
If it is said that investing in Tencent is the luck of the fledgling Zhang Lei who made a bet before the big wave of the Internet, then investing in JD.com really made Zhang Lei famous.
In 2010, JD.com lost money for seven consecutive years.
In order to recover the decline, Liu Qiangdong, the head of JD.com, found Zhang Lei, who is also an alumnus of Renmin University, and hoped that he would invest $75 million to help JD.com build a logistics system.
But Zhang Lei told Liu Qiangdong that $75 million was too little, and that he would either accept Hillhouse's $300 million investment or he would not invest a penny.
Liu Qiangdong opened his mouth to ask for money, but he originally just had the mentality of trying, and he didn't think that Zhang Lei would give three times more than what he wanted to take.
Some people laugh at Zhang Lei for being stupid and having a lot of money, but Zhang Lei thinks that Liu Qiangdong underestimated the challenges and difficulties of building a logistics system.
In fact, Zhang Lei calculated this business in a down-to-earth manner.
He knows very well that with JD's e-commerce status and self-built logistics system, it can form a "moat" core competitiveness, which can help JD stand out from the same competition.
But the process of creating a "moat" from scratch is very expensive.
After all, self-built logistics is an asset-heavy business, and to build a complete first-class chain system, 75 million US dollars is far from enough.
But the $300 million investment, which far exceeded Mr. Liu's $75 million estimate, meant JD.com would have to give more shares and control to Hillhouse Capital.
However, Liu Qiangdong accepted it all.
This investment also became the largest single investment in China's Internet industry in 2010.
With the support of 300 million US dollars, JD.com quickly built a logistics system and developed it into JD.com's most competitive business.
In 2014, JD.com went public, and Zhang Lei's investment of 300 million US dollars has increased 10 times.
If the two large-scale investment operations confirmed Zhang Lei's judgment, then investing in Blue Moon reflects his accurate prediction of the market.
Zhang Lei first met Luo Qiuping, the founder of Blue Moon, in 2006.
At that time, Blue Moon was doing well in China, and its fist product, Blue Moon hand sanitizer, was a household name.
At that time, the giants of daily chemical products, Procter & Gamble and Unilever, focused on laundry detergent and soap, and did not compete with Blue Moon.
Zhang Lei noticed that the laundry detergent he was used to abroad was abandoned by the daily chemical giant, and the shelves of major domestic supermarkets were all laundry detergent and soap.
He keenly grasped this market vacancy and advised Luo Qiuping to put the production line into laundry detergent as soon as possible and be prepared for losses.
Luo Qiuping was surprised, Blue Moon's current profitability level is acceptable, and if you don't make good money, why should you risk making a product that you are not familiar with?What's more, it's still a product that even Procter & Gamble and Unilever haven't made.
But Zhang Lei's analysis immediately changed Luo Qiuping's concept.
Procter & Gamble and Unilever do not produce laundry detergent in China because a survey report shows that the daily chemical market will fundamentally change only when the per capita GDP exceeds $8,000, and China is at least 20 years away from that figure.
However, Zhang Lei believes that foreigners have not seen the huge potential of China's economy, and it will not take 20 years for China's GDP to break through the figures in the report.
Even the existing first-tier cities have already exceeded $10,000 in GDP per capita.
Therefore, he advised Luo Qiuping not to wait until the opponent had already made a move before entering the market.
Luo Qiuping listened to the persuasion and began to produce laundry detergent, but also began the loss journey of Blue Moon.
In 2010, Zhang Lei's Hillhouse Capital officially invested in Blue Moon, and at the same time, it also withstood the test of continuous losses with Blue Moon.
It wasn't until Blue Moon finally made a profit that the depressed Luo Qiuping excitedly found Zhang Lei and told him this hard-won good news.
But Zhang Lei was not satisfied after hearing this, he said, "We must continue to lose money, otherwise I will withdraw all the investment of 45 million US dollars." ”
This decision left many shareholders, including Luo Qiuping, dumbfounded.
Zhang Lei gave his thoughts to Luo Qiuping: Blue Moon is not yet profitable.
Because at the moment, the market share of Blue Moon laundry detergent is still not high enough, and the moat is still not deep enough.
At this time, there is no loss, which can only indicate that product development and marketing efforts are not enough, and the company is satisfied with short-term profits, without considering the long-term market.
He said that whether an enterprise can cooperate with capital does not depend on whether the enterprise is profitable now, but whether it can continue to provide social value and customer value.
Zhang Lei is waiting, waiting for a moment of "quantitative and qualitative transformation" in the blue moon.
Network diagramFacts have once again proved that Zhang Lei's waiting was right.
Despite his insistence on "strategic loss", Blue Moon has achieved great success in the laundry detergent market, with its products having more market share than Procter & Gamble and Unilever combined.
In 2020, after Hillhouse Capital "ran with it for ten years", Blue Moon was listed on the Hong Kong Stock Exchange, and Hillhouse Capital also gained more than 20 times the income as a result.
Now, Zhang Lei has once again been pushed to the forefront because of ** chalk network shares.
In fact, Zhang Xiaolong also understands that the investor's legal ** shares of the invested company are not much controversial in themselves.
It's just that what makes Zhang Xiaolong angry is that a value investor shouts "value" all day long, and as a result, he turned around and sold his own ** that had just been lifted.
In his opinion, Zhang Lei ** is breaking his promise.
In fact, Zhang Lei is smart, and his past Xi learning experience and working methods have made him understand how to discover the most basic things in the connection between things.
This is also the starting point and gateway of his value investing.
After all, value investing isn't about holding for the long term without selling shares.
When a company or an industry no longer meets the value standard, is there still a need to hold it for a long time?
Zhang Lei once said, don't do the value investment of machinery, long-term holding is only the result, not the goal.
No market can be static, and the effectiveness of the market is changing.
After seeing the reality and the essence clearly, whether to make a move and whether to wait depends on whether the market is effective or not.
In value investing, time is a friend and an enemy.
Zhang Lei's ** is just that he did what he thought he should do on the road of value investing.