China's 1.3 billion population, the future of China's entire society aging is the most certain, now at this point in time is nothing uncertain, real estate can be the best, banks can always be high profits, foreign trade is not in our hands, infrastructure investment is related to the first, high-tech is good, but you don't know which of the A shares in the future can become the next Tencent, more are some uncertainties, Tencent in the whole growth process, there are also a lot of coincidences to make it invincible. At that time, Sina and Sohu were not less famous and core competitiveness than Tencent, but they were not good later.
So technology stocks are good, who can rise and who can't, it has a lot of risk, my so-called risk is a permanent loss, for example, you didn't buy Tencent more than ten years ago, bought Sohu, then you are a permanent loss and you can't come back. Therefore, the current aging is determined, and in the next few decades, people will get older and older, and they will have to take medicine when they are old, and they will have to eat less than before, but they will eat more medicine than before, such as health care products Liuwei Dihuang Pill, Angong Niuhuang Pill, Yunnan Baiyao, Ejiao, Pien Tze Huang can only eat more and more people. That's not what I expected, and that's how the data shows now.
Another is that the traditional Chinese medicine industry has been in a period of adjustment in recent years, and each company has its own problems. Each company also has its own digestion problems and the problems of the whole industry, the industry problem is that the entire pharmaceutical industry has not been good in recent years, the main reason is that the national centralized procurement, with the purchase of volume to the industry expectations have undergone some changes. But each company has different characteristics, I try my best to think of some of the Chinese medicine companies I can think of, but we are not to make recommendations, nor to do business basis, is to know, track, know these Chinese medicine companies, whether I am optimistic or not, all of them are unified combing, what are their current problems, advantages and disadvantages.
The current trend of the Chinese medicine index is somewhat similar to the trend of Yiling Pharmaceutical, especially after 2015. This also shows that Yiling Pharmaceutical is ahead, this form of Yiling Pharmaceutical is the form of traditional Chinese medicine in the future, and traditional Chinese medicine will also be in this form in the next one or two years. It's just that some varieties got up first in advance, just like liquor, Moutai started first and Moutai hit a new high, and at this time, Wuliangye may still be lying on its stomach at the bottom and not moving. Yiling Pharmaceutical cannot be said to be the best company in the traditional Chinese medicine industry, it is a traditional Chinese medicine innovation company, recently just caught up with the wind and rose first, but it has actually set a benchmark out, and it is really rising very quickly. Yiling Pharmaceutical fell from more than 30 yuan to 9 yuan, and it returned to more than 30 yuan in a month.
Traditional Chinese medicine stocks and liquor stocks are the cradles of the two largest since the establishment of China. Medicine, like consumption, is subdivided into a variety of categories, including colds, cardiovascular and cerebrovascular, and bruises. We have been focusing on some varieties recently, such as Yiling Pharmaceutical Co., Ltd. has risen recently, in fact, I don't want to say it, I said that ** has a characteristic, I like to say it at a low level, and I don't like to say it after it rises, it makes no sense. As for the short-term market behavior, if you ask Warren Buffett which day it will fall, he can't tell you. If you make money with it, but you feel uncomfortable if you are too heavy, then you will reduce it until you feel that you can sleep, and everyone's risk tolerance is different.
I have been taking Pien Tze Huang for more than ten years, and after it has risen several times, I have been cut in half, because I feel that after I sell it, I have no better choice. In the long run, as long as you hold the final result, it will not be bad, but if you use high to sell high and suck low in the short term, the result may not be good. At that time, I just thought that it would not be wrong to hold it for a long time, but if you throw high and suck low, you can earn more if you win, but if you can't win, you will be wrong, and there is a chance of being wrong. Yiling Pharmaceutical is not the same as Pien Tze Huang, Yiling Pharmaceutical does rise in the short term because of short-term factors, and the cumulative increase is larger, and we also reduce it.
Pien Tze Huang is also long-term, with the continuous expansion of indications and the continuous improvement of scientific and technological content, the company's long-term performance has grown steadily, and the risk is that the valuation is not expensive, and then hold it for a long time. So there is no big problem with this kind of company, Pien Tze Huang grasps two points, one is the quantity and the other is the price. If there is no problem with the volume and price in the future, the only risk for this company is the level of valuation. But many people say that Pien Tze Huang's valuation has been high for a long time, when will it come down. But when the valuation does come down, it's actually a missed time, and it's past the high growth period, and the valuation will come down. I think Pien Tze Huang has risen to a market value of four or five hundred billion, which can still be seen, and this is also our largest heavy position.
Then there is Yunnan Baiyao. I started to take a fancy to Yunnan Baiyao in 2005 and started buying it in 2006. Tong Ren Tang was bought in 2002. Yunnan Baiyao, this kind of **, is also bought to have been held, in recent years on the dip has also increased positions, although the stock price has been resting in recent years, it is mainly due to a mixed reform, he has a company's mechanism, the main reason is that its main business has reached a bottleneck. For example, toothpaste and pharmaceuticals have reached a growth bottleneck, and it has been pushing new products, but new products have not yet been able to promote the company's high growth. Because it has risen too much in the past few years, like toothpaste has reached the top three in China, it has achieved the extreme, of course, to the extreme is not optimistic. Just like when Warren Buffett bought Coca-Cola, it had already achieved the ultimate in the market, and when he bought Geely blades, Geely blades were already the absolute leader in the American market at that time.
Warren Buffett said that I buy Geely blades, and I think every night that hundreds of millions of people will shave with this, and he can't sleep with excitement, and its position in the industry is already very solid. Like Colgate in the United States, its long-term stock price trend is a punch, it has been rising since 1979, and it is still rising, including this wave of the epidemic, its stock price fell back to less than 20%, far less than **. In fact, it was still rising in the past few decades, but we can't see it. Yunnan Baiyao is similar to Colgate, Colgate is made of toothpaste, a toothpaste to win the world, 95% of the profits are derived from toothpaste, this is a trend of Colgate. Yunnan Baiyao will also have such a trend in the future, because its product power is very strong, and the top secret formula in Chinese traditional medicine, one is Pien Tze Huang, and the other is Yunnan Baiyao, which are all national treasure-level top secrets. That is, its products are unique and no one can compete with them.
There is also Tong Ren Tang, Tong Ren Tang has three companies, one is A shares, one is Tong Ren Tang Technology, and the other is Tong Ren Tang Chinese Medicine. Tong Ren Tang is a company, I am second to it, but I can't ignore it, just because of these three words, Tong Ren Tang. Because in the traditional Chinese medicine industry, the representative of the industry's status, history and culture is Tong Ren Tang, and no one can replace it, and Yunnan Baiyao and Pien Tze Huang cannot replace it, because they can only represent one product. Tong Ren Tang is a large group, it is the representative of traditional Chinese medicine, so if the Chinese medicine industry develops in the future, there is no reason for Tong Ren Tang to weaken.
The brand of Tong Ren Tang is very valuable, if in terms of Chinese history and the value of China's industry market position and brand value, the brand power that can be comparable to Moutai in China's traditional industry is Tong Ren Tang if it can stand on the same level as Moutai. Its value is at the same level as Moutai, a trillion-dollar market value enterprise, but its current stock price corresponds to only 1% of Moutai's market value. These three words will be auctioned on the market tomorrow and can be sold for 50 billion, this is my judgment, behind these three words is not only hundreds of years of culture, not only on behalf of a country, the cultural heritage of a nation. Behind these three words are dozens of good fist products and blockbuster products.
There may be other brands of Angong, but some of the Angong materials are bi-natural and have strong uniqueness. Therefore, it is also this logic, because the number of cardiovascular and cerebrovascular and stroke cases is increasing with the aging society. In case the elderly at home are at risk of stroke, they have to prepare this medicine if they have some conditions. Ejiao is the same, many people say what is the use of Ejiao? Isn't it just a donkey's skin? But don't forget that donkey skin is more than 2,000 years old, if it is useless, it has long been eliminated, it must be useful, I have consulted many doctors, including Western medicine, I asked him, half of the people in China are women, women are prone to ischemia, lack of gas. Although this kind of enterprise has encountered many problems in the past, such as the backward management of management, which has led to the downturn of the company's stock price. But why do I think these companies are worth collecting in the future? Because it is unique in this exclusive field, and its market value is not large, it will rise again one day.
We know that Li Ka-shing has a Watsons in Guangdong, which was incomparable with Tong Ren Tang in the past, but under Li Ka-shing's excellent management, it has achieved a market value of hundreds of billions, but it has not worked in recent years, because it is a commercial chain, it is a chain that sells cosmetics, and what we want is the old brand of Watsons. If Tongrentang manages well in the future, I think it may be 500 billion out, and bird's nest can be the first in China.
1. Cordyceps is the first in China.
1. Ejiao is the first in China.
Second, Angong Niuhuang Pill is the first in China.
1. Liuwei Dihuang Pill is the first in China, and many medicines should be the first in China, because you are the most authentic, you are the representative of authenticity, the representative of orthodoxy, and the representative of national treasures.
When we look at a company, whether it is consumer-centric and whether it is product-centric, this culture is very important. Including many companies we have seen, I think the quality is absolutely passable, such as Pien Tze Huang and Yunnan Baiyao, Yunnan Baiyao is to win by quality, whether it is to make toothpaste, shampoo or ** are more expensive than similar products. But behind the expensive is high quality, high quality, so you will feel that its product texture is very good. Including Dong'e Ejiao, which has encountered a crisis in the past two years, we found that although Dong'e Ejiao has encountered some problems at the marketing level and business strategy, its quality has not been broken, so I think it can still rise. Therefore, when consumers choose Ejiao, they still feel that the quality of Dong'e Ejiao is the root of the enterprise. For example, some liquors in history were on the verge of bankruptcy due to product quality problems, so quality is very important. Moutai has always had a guaranteed quality, and I think its business model is strong, but I think Moutai has a high percentage of historical executives who have problems, and in the long term, I think it's better to address this as well.
I haven't followed the company much for a long time, and we are relatively more optimistic about Dong'e Ejiao, which is similar to it, because Ejiao has regional characteristics, in other words, it can't be produced without Dong'e Water and Dong'e County. Therefore, there is a certain degree of uncertainty about how wide the moat of Tomson Beijian is, and whether a new brand will appear to replace it in the future. Of course, the best ones are like Yunnan Baiyao and Pien Tze Huang, whose own products have their own secrets, and others can't produce them. Like Dong'e Ejiao, including many products of Tong Ren Tang, it has a historical status of hundreds of years and thousands of years, so this historical status has established that it is difficult for anyone to surpass it within a few decades.
I think that if you want to achieve long-term success, you must first have a family culture and feelings, followed by a business model, such as an enterprise with exclusive products, monopoly management, oligopolistic competition or engineer culture. Different businesses have different business models, and different industries have different industry models, and it is best to find one with a unique business model. For example, Yunnan Baiyao and Pien Tze Huang are national secret formulas, and the products are unique, which is unique. Like BYD, the R&D team is very strong, and the enterprise has an engineer culture in its bones. The best business model is one in which the demand can continue to amplify over a long period of time, and the supply side is not fiercely competitive.
Including many people ask Mr. Ma, mass consumer goods are not exclusive, but why are they also optimistic about beer, milk, and food condiments. Just like Warren Buffett buys Xishi candy, there are many chocolate brands abroad, but this brand has its own unique brand advantages. Tsingtao Beer also has its own unique brand advantages, it has a history of more than 100 years and the quality has been maintained very well. Yili milk has a sales radius and a milk source base, located in Inner Mongolia has a unique resource advantage, so it is difficult for the southern dairy products to compete with the dairy industry in Inner Mongolia, to undertake the consumption of 1.3 billion people need to have a huge supply of raw materials, at the same time, Yili after so many years of development has slowly formed an industry oligopoly pattern.
Medical care has been very good in recent years, and the prosperity is very high. For example, ophthalmology, dentistry, including pharmaceutical R&D outsourcing. One is not to be suppressed by the policy of centralized procurement. The other is just in the midst of consumption upgrades, such as ophthalmology outbreaks or stomatological outbreaks. But at this point in time, we are cautious about this sector, where the opportunities are rotating. The past few years have been a period of adjustment for pharmaceutical brands such as traditional Chinese medicine and innovative drugs, and the good ones are this kind of medical services, R&D outsourcing, and ophthalmology and dentistry. But from now to the next five or six years, I think it's the opposite, the pharmaceutical industry will slowly recover from the trough to boom, and these ophthalmic dentistry and R&D outsourcing will go from boom to adjustment and eventually to recession. One is that these companies have experienced high growth for many years, for example, the annual performance is a high growth rate of 30% or 40%.
If any industry continues to grow at a high rate of 30 or 40 percent for many years, you should pay attention to the fact that it may enter a bottleneck of growth. For a 100x P/E valuation, then they are facing a double kill, so I think we should be cautious next year. If you have made a lot of money by holding this piece in the past few years, it is better to moderate it and change to some leading enterprises of Chinese medicine brands with sufficient adjustment and low valuation. It is also optimistic about consumer medicine and technology. But in the process of optimism, the adjustment of ** is very important, which requires you to have an understanding of each subdivision, and their respective subdivision cycles are different steps and different rhythms, so everyone should pay attention. For sectors with large cumulative gains in the past, once they face a performance stall, then you have to be careful that they may enter a long-term correction in the future.
Since the listing of these two, Yunnan Baiyao and Pien Tze Huang are both "evergreens" in A-shares, but in recent years, the fundamentals of Yunnan Baiyao have not been as good as Pien Tze Huang, which may only be a matter of short-term rhythm. Therefore, it does not mean that the fundamentals of Yunnan Baiyao are not good in the next few years, and the ceiling for their growth is far from being reached. Ten years from now, the stock prices of these companies will rise 10 times to dozens of times higher than they are now. He is not only good in the industry, but also has excellent management skills. Like Coca-Cola in the United States, they have an exclusive secret formula that is unrepeatable and unique. Firm a concept, such enterprises will not disappear in the future and the consumer population will gradually increase, do not care, the long-term holding rate of return will not be bad, including some undervalued enterprises such as Dong'e Ejiao and so on (do not make ** recommendation). For example, whether Moutai is worth 1.4 trillion depends on whether Moutai can earn 70 billion yuan a year in the future, whether Ejiao can be worth 20 billion yuan, and whether it can make 1 billion yuan a year in the future.
I myself am a family of medicine, since I was a child, Pien Tze Huang, Yunnan Baiyao, Tong Ren Tang these companies are no strangers, so we can quickly understand some of the feelings of these companies, more than ten years ago Pien Tze Huang executives came to Beijing Roadshow, many ** managers as soon as they heard about Chonglou, musk, bezoar, I was more clear, knowing these scarce resources, scarce value, ** valuable drugs are priceless, Yunnan Baiyao's executives we are trusting, committed to improving shareholders' rights and interests, the motto is to keep shareholders away from harm, When we invested in Baiyao in 06, the market was also worried that it had encountered a bottleneck in growth and sold it one after another, similar to today, but under the core driving force of an excellent management team and a good track, I believe that the bottleneck of growth will be broken again and again.
BYD has invested for 12 years, Wang Chuanfu was born as a scientist, corporate engineer culture, in the artistic sensibility level, we dare not say how good Wang Chuanfu's aesthetics or marketing are, but he is a scientist, we cannot deny that they have family and country feelings. In addition, these managers are not particularly aggressive, his team is very stable, and when choosing to make decisions, they are small and big, and they have to consider risks when doing business. And the technical foundation is very solid, so we never worry that he will fall behind, and the company that can market itself but does not have a solid technical foundation will not go far. Therefore, any business must have a product quality culture, which is the root of a business, especially in the food and beverage industry, where consumers have a very low tolerance for health-related food fraud on the market. Once there is a quality problem, even the most powerful business model can be reduced to nothingness overnight.
There is also a new energy vehicle, in fact, BYD, the company now has several major changes. I think I am very optimistic about new energy vehicles in the next few years. The main reason is that after the epidemic, the national subsidy policy for new energy vehicles has been extended for two more periods, which is a major benefit, and it was unimaginable so much before, and now it has come out. I used to think that if I regressed, it would be impossible to change anything, but this time it has changed. The national economy is not very good now, to stimulate domestic demand, stimulate consumption, real estate is not allowed to speculate, at this time we will promote the development of new energy vehicles, so new energy vehicles are currently the top priority of China's economy. So I think that after the epidemic, especially in the second half of this year, the entire sales volume of the new energy vehicle industry will rise sharply.
Just like after SARS in 2003, cars also had a steep rise at that time, so from 2003 to 2005, the best increase among the five golden flowers was the car represented by Changan Automobile. Then this time it's not the auto sector, this time it's the new energy vehicle sector. I think this piece is also relatively optimistic, so I am resolutely optimistic about the trend of new energy vehicles in the second half of the year.
In addition to making masks recently, BYD has made a lot of excitement, and there are some microelectronics like it that have introduced strategic investment, including BYD's blade battery in the future, which will be listed independently, and this piece has actually begun to take action. So I think BYD is now also standing at an inflection point, the company is now opening up to the outside world, and all sub-departments and sub-businesses have core technologies, such as BYD Microelectronics, which is a real core chip concept company in China. Therefore, after the introduction of strategic investment in these things, the capital operation will slowly begin, and the next step will be spin-off and listing. Spin-offs and listings are beneficial to the company's valuation. The spin-off and listing means that BYD is not a company that is separated from this company, but is listed independently, but the major shareholders of this company's equity, such as 70% of the equity, still belong to the group company, so the company itself still belongs to the assets of the group company.
Only by separating them can they each form their own core competitiveness, rather than sacrificing themselves for the whole group. In this way, each department will focus on profit growth, which will be conducive to the re-mining, value reconstruction, and value growth of each department. In this way, it is conducive to the improvement of the internal value of BYD's entire group, so from this point of view, I think BYD is now standing at a very good long-term inflection point. This ** has not risen for many years, but I think the company's core competitiveness and core factors have always been there, and I am still very optimistic.