Duan Yongping, a native of Jiangxi, founded BBK at the age of 34, worth 100 billion at the age of 38, bravely retired to the United States, obtained a green card in the United States in 2001, and began to invest while enjoying life in the United States. He is the investment boss behind OPPO, vivo, BBK, Little Genius, J&T, Pinduoduo, Temu, and after entering 2024, he has interacted with netizens many times on Xueqiu (ID: Avenue Invisible I Have Style), sharing his latest views on business models, luxury goods, new energy vehicles, Apple Vision Pro, etc.
Reflections on the company's long-term profits.
When: January 29, 2024.
Duan Yongping asked: Among companies with annual profits of more than 1 billion US dollars or annual profits of more than 5 billion yuan, who will have a higher total profit in the next 10 years than in the past 10 years? Who of these companies will have a higher total profit in the next 10-20 years than in the next 10 years combined?
Netizen 1 replied: After thinking about it, I still choose Hermes and LVMH. This can be achieved by a moderate increase in the price of luxury goods in line with inflation. The value retention rate and value-added rate of these two products are quite strong, and the core products will not be inferior to Moutai.
Duan Yongping Interactive: I haven't seen a luxury company yet, so I don't think it's easy to understand. I have bought Hermes products, and the things are really good, but I haven't bought the donkey brand.
Data supplement:
1) In the first nine months of 2023, the Hermès Group's sales growth rate reached 217%, exceeding the 10 billion euro mark for the first time in the first three quarters.
2) On January 25, local time, LVMH, the world's largest luxury goods company, released its 2023 annual report. According to the financial report, LVMH's annual revenue in 2023 will be 86.2 billion euros, a year-on-year increase of 9%; Net income was 15.2 billion euros, up 8% year-on-year.
Netizen 2 interaction: Dadao can take a look at the ideal car again. Although I see you saying that cars are not a good business model, there are some differentiations that can be made. We can't be sure which company will win the smart car. It is because I saw the investment philosophy of your avenue that I moved from the first to the ideal of investment.
Duan Yongping replied: Electric vehicle companies are likely to be living a hard life in 20 years, if they are still living.
Data supplement: In the past 10 years, Lao Duan seems to have a cautious attitude towards the development of new energy vehicles (in his words, I can't understand it).
Here's an example of his views on BYD and Tesla.
To BYD. March 16, 2010. I haven't bought PetroChina, and I've never bought BYD. However, if PetroChina goes back to the price that Buffett bought back then, I will not hesitate to jump in, because I will understand it later. If BYD goes back to the price that Warren Buffett bought back then, I still won't buy it, because I still don't understand.
June 16, 2020. BYD Semiconductor? BYD masks? It seems that cars are not very profitable, and the business model is not so good? (The background is a news report: BYD Semiconductor has invested another 800 million yuan BYD (01211.)HK) shareholding diluted to 723%）
To Tesla. In 2013, Duan Yongping bought a top-of-the-line version of Tesla Model S, and after driving for a while, Duan Yongping posted on the Internet to evaluate his experience with the car, put forward several advantages and disadvantages, and fed back to Tesla, but Tesla said that it did not want to improve at present, Duan thought that Tesla's products were garbage, and the company would not be valuable, and he also sold his Model S soon after.
In 2023, Duan Yongping said that he still thinks that Tesla's future is a hard business, and the business model is not so good, although it is already remarkable that they have done this. Intuitively, it is difficult for the car (including electric vehicle) business to have a particularly good business model, and it is difficult for the current electric vehicle company to survive in 10 years**.
Netizen 3 asked: Nongfu Spring.
Duan Yongping replied 1: It is not easy to understand the differentiation of bottled water.
Duan Yongping replied 2: There are very few companies I know, and among the companies I know better (with an annual profit of more than $1 billion), I think the companies with a higher total profit in the next ten years than the total profit in the past 10 years may include Apple, Moutai, BRK, Microsoft, and Google. Pinduoduo should be counted as one, but that's because Pinduoduo hasn't made much money in the past 10 years. Companies like McDonald's and Coca-Cola should have a high probability of beating inflation, so they should also be counted. I was a little embarrassed, and I found that I knew so little about the company. That's my way of thinking, and that's probably how I see the company. When you look at a company this way, it's natural to value the business model.
For the long-term optimism of the company**.
When: January 28, 2024.
Duan Yongping asked himself: Who do you think will be in the company that will still be there after 10 years? The definition is that the turnover and profit are not lower than today in 10 years, and it can be considered that it is still there. I think Apple, Moutai, and Tencent should still be there; Google, Microsoft, BRK should also be there. I hope the OV is still there, but not 100% sure. 20 years: I think Apple, Moutai should still be there, Google, Microsoft, BRK should also be there, Tencent 90% is still there, and OV should be 75% still there. What about 30 years? ...It's really a brain game, and thinking about it might help you with your investment. Nintendo's current position is obviously far less than it was 30 years ago, and it should not be as good as it was 20 years ago.
Data supplement: Nintendo's financial report (April 1 to September 30, 2023) shows that Nintendo's sales in the first half of the fiscal year were 796.2 billion yen, a year-on-year increase of 21.2%.2%；Operating profit was 279.9 billion yen, up 27% year-on-year, while Nintendo's cumulative global sales of the Switch have reached 132.46 million units, and Nintendo has raised its revenue forecast for FY23-24 due to revenue growth.
Well, let the bullets fly a little longer.
About Apple's new Vision Pro experience.
When: January 27, 2024.
Duan Yongping asked and answered: I went to see the demo of Vision Pro the day before yesterday, because it was only 20 minutes, so I didn't see anything beyond what was shown in the ** I saw before. To put it simply, it's amazing indeed, and it's worth trying for insensitive users. The 3D part is also amazing, and I didn't think there was anything wrong with watching it, but I still felt a little uncomfortable afterwards. My eyes are completely fine, but there is a slight feeling of motion sickness, probably less than 10%, maybe I am oversensitive. The Vision Pro had to be bought by yourself, because it had to match the shape of the face and wear glasses. It may not be appropriate to buy from scalpers.
About the margin of safety.
When: January 24, 2024.
Duan Yongping replied: To quote Warren Buffett, if you fully understand a business and the future of the business, you only need a very small margin of safety. So, assuming you still want to invest, the more fragile the business, the greater the margin of safety you need. If you're driving a 9,800-pound truck across a 10,000-ton bridge that's only 6 feet above the ground, you'll probably feel fine. However, if the bridge sits on top of the Grand Canyon, you might want to have a larger margin of safety.