Rebirth of the Capital Legend

"Why does it feel like the Hong Kong stock market is much stronger than the A-share market?"

Noting that after the A-share market closed, the Hong Kong stock market continued to rise and break through the pattern trend, in the domestic market that has already closed, countless retail investors gathered on major stock investment exchange platforms across the Internet, as well as in major internal investment exchange groups, some people couldn't help but sigh.

"There's nothing we can do about it. The Hong Kong stock market is clearly fluctuating in line with the US stock market."

"It's true that the Hong Kong stock market is much more proactive than the A-share market."

"Are domestic real estate stocks going crazy? Why are they experiencing such a series of sharp increases? I don't think there's any significant good news worth noting lately!"

"It has nothing to do with the so-called good news, right? It looks more like a valuation correction."

"I think it's a complete reshaping of value after the fundamental logic reversed."

"Well, you could say that. The underlying logic of the real estate industry chain is indeed different from before. Many of the corresponding core leading stocks will definitely see valuation repair and value reshaping driven by continued performance. What's it called? A Davis double-click, right?"

"Yes, that's the Davis double-click."

"It seems that whether it's the A-share market or the Hong Kong stock market, the real estate industry chain is the most core market leader."

"That's certain. Is there anything more certain than this line?"

"Then why are the performance of leading stocks in core sectors of the real estate industry chain in the A-share market so much weaker than that of their counterparts in the Hong Kong stock market? Isn't the logic behind both the same? Could it be that domestic institutions are not as sophisticated as their foreign counterparts?"

"The funds investing in Hong Kong-listed Chinese real estate stocks may not necessarily come from foreign institutions."

"I agree. I feel that in the Hong Kong stock market, the main capital groups active in the main areas of the real estate industry chain are most likely domestic institutions heading south."

"Not really? Then why are the trends so different?"

"The big difference in trends is normal, right? It's mainly due to the different valuations of the two markets. Previously, the valuations of real estate stocks in the mainland market were much higher than those in the Hong Kong stock market. Of course... they are still much higher now."

"Wasn't the higher valuation explained previously as a liquidity premium?"

"That's right. Speaking of the difference in real estate valuations between the two markets, it's not just within the core real estate industry chain. Within other sectors, the valuations of the same stocks vary significantly. Relatively speaking, valuations in the Hong Kong stock market are generally lower. I think the previous explanation that this is a liquidity premium is valid."

"But the liquidity of the Hong Kong stock market isn't as bad as it was before. Is there still a liquidity premium? Besides... A-shares in the mainland market are also in a bear market."

"That being said, there's nothing wrong with that."

“So, I think it’s not a liquidity issue, but a valuation correction after a shift in fundamental logic.”

"So, as expectations become clearer and the certainty of explosive performance increases, the core real estate stocks in the A-share market should also generally experience valuation recovery, right?"

"In theory, that's true."

"In fact, the entire real estate industry chain and the major infrastructure projects are already on the path of valuation repair and value reshaping, right?"

"Well, actually, the major infrastructure stocks in the A-share market have risen quite a bit, but compared to the recent performance of related stocks in the Hong Kong stock market, I clearly feel a little bit lacking. I feel a bit unbalanced, especially since I also hold Kewan Real Estate, and the Hong Kong stock market is obviously much stronger."

"For the same stock, even if its growth temporarily lags behind the Hong Kong stock market, it will recover later, right?"

"I hope so, but I'm afraid the situation will turn out like Conch Cement, where the Hong Kong stock market's share price is higher than the A-share market."

"Speaking of Conch Cement, what's going on?"

"I don't understand. I don't know why foreign institutions are so enthusiastic about this stock and have been flocking to it."

"Is the market trend and underlying logic of this stock so strong? I feel that the price elasticity of cement and other construction commodities is relatively limited."

"I also feel that the room for price flexibility is quite limited, but the funds agree. What can be done about it?"

"Yes, we can only follow the trend."

"In the A-share market, the building decoration and construction materials sectors are clearly outperforming the real estate sector. However, in the Hong Kong stock market, the situation is the opposite. The main investors are mainly long in the real estate sector, especially in the domestic real estate sector. I don't know what caused this difference between the two markets."

"I think it's mainly due to the lower valuations of mainland real estate stocks in the Hong Kong stock market."

"I think so too. Also, in the A-share market, the real estate sector saw a wave of speculation at the end of last year. For example, Kewan Real Estate's stock, even if future expectations are optimistic, the current price doesn't offer a very good value for money investment."

"So, is this the case that funds are concentrated in the construction materials and building decoration sectors?"

"Mainly compared to many stocks in the real estate sector, some leading stocks in the core industries of the construction and decoration and building materials sectors have more hype and investment value, right?"

"Indeed, the logic should be exactly the same."

"The logic behind the entire infrastructure investment strategy is exactly the same. In fact, aside from some core leading stocks that are the focus of some investors, all other stocks follow the sector index. As long as the fundamentals aren't particularly bad, buying any one of them will feel pretty much the same."

"The stock trend of Anhui Conch Cement is still more stable."

"Isn't Oriental Yuhong the most stable stock? With President Su's Fuxing Road seat, it's always been a hot topic among major investors, and its performance is incredibly strong. It's been rising all this time, and if it adjusts, it's bound to rebound the next day."

"But the price of Oriental Yuhong's stock seems to have risen a lot, so it's hard to buy it."

"Which of the good core leading stocks hasn't risen a lot? Those that are still flat are destined to not have much attention from major capital groups. Without the attention of major capital, it is basically impossible for them to strengthen independently, or even far exceed the performance of the sector index."

“So, do you still have to buy hot stocks?”

"That's for sure. Why would you ignore popular stocks and buy unpopular ones? What's the plan?"

"Well, it's just that the hot stocks have risen too high, making it hard to buy. I really don't want to chase them, but I keep waiting... and there's no sign of a significant pullback, which is really excruciating."

"As long as the general direction is correct, just buy heavily and don't overthink it."

"Yes, I originally thought Oriental Yuhong's stock had risen too much. I watched it rise earlier, but I just didn't dare to buy it. But two days ago, I closed my eyes and finally decided to invest heavily. Now... I've already made over 10% in profit on this stock. With enough profit, I can hold on to the stock. As long as I don't lose money later, I'll hold on to it. I want to see how high this stock will rise in the end."

"As long as the main line of the infrastructure market continues to rise, I feel that Oriental Yuhong's stock will continue to rise, right?"

"I feel that as long as Mr. Su's Fuxing Road stock remains in the market, this stock will remain a popular holding for major institutional investors, and its share price will naturally continue to rise. Furthermore, the stock hasn't yet reached the stage where any positive earnings news will materialize. I think this stock is still a long way from reaching its peak."

"Sigh, compared to the gains of stocks like Conch Cement and Oriental Yuhong... the gains of this heavyweight stock, China Construction, are really nothing to write home about. This stock is clearly the core leader of the entire building and decoration sector, and the absolute leader of the entire major infrastructure sector. Why is its stock price performance simply not outperforming the sector index? It's even barely outperforming the overall market index."

"Isn't the market really too big? China Construction's circulating market capitalization exceeds 1500 billion. Who can pull it off?"

"I also feel that the market cap of this stock is too large. You have to know that the current market liquidity is actually very average, and it is not at the point of being flooded with liquidity."

"China Construction, China Railway Construction, China Communications Construction, China Railway Group... To be honest, these infrastructure stocks with "Hua" in their names just aren't going anywhere. My advice is to sell these mega-cap stocks and invest in small and medium-cap growth stocks within the infrastructure sector. This way, you won't have to worry about holding these mega-cap stocks. If you choose the right market trend but buy the wrong stocks, you won't make any money at all, which will inevitably lead to frustration."

"Okay, I'll do as you say. I'll sell these large-cap stocks this afternoon and buy small- and medium-cap growth stocks."

"As long as market sentiment improves, the main capital groups in the market will inevitably converge on small and medium-cap stocks with greater flexibility. So at this time, there is really no need to hold these super-large-cap stocks. It is not time for the market to start dancing."

"There's no such thing as an elephant dancing. That's something that happens in a bull market."

"Yes, but the overall market trend now is obviously much more optimistic than it was six months ago."

"That's for sure. We are gradually getting out of the bottom."

"Speaking of which, with the stimulus from the Hong Kong stock market, the market trend this afternoon should be more optimistic, right? Do you think the Shanghai Composite Index can regain 3100 points today?"

"I think there shouldn't be any problem. In fact, the Shanghai Composite Index is very close to 3100 points. If it wants to break through, it shouldn't face much resistance."

"After such a long period of volatility, any resistance should have been absorbed by now."

"Haha, that's true."

"So, will the market trend this afternoon still be focused on major infrastructure projects?"

"I think we still need to focus on the major infrastructure sector. After all, the new energy industry chain and the smartphone industry chain... I feel that today's trend is not as strong as yesterday's. There are still relatively large divergences. Moreover, in this morning's trend, the leading stock with the strongest capital consistency is Beijiang Communications Construction, which is from the major infrastructure sector. If we don't focus on this core theme this afternoon, what else can we focus on?"

"That makes sense, but it seems like the good stocks have almost all risen in the morning, so it's not a good idea to buy them in the afternoon."

"You can focus on buying second-tier real estate stocks this afternoon. I feel that the continued volatility of mainland real estate stocks in the Hong Kong stock market will definitely lead to a restructuring of the valuations of a number of second- and third-tier real estate stocks in the A-share market."

"For example, Jinke Shares, Taihe Shares, Financial Street, Capital Group... these stocks?"

"Actually, Gemdale Corporation is also an option. I feel like among the core leading real estate stocks, Gemdale Corporation's market cap isn't particularly large."

"Well, it's possible, but there's a lot of flexibility, so don't expect too much."

"Capital Group is a good stock, and so is Financial Street. The fundamentals of these two stocks are not bad, and their stock performance is very good. Investors are also willing to invest in these two stocks."

"Financial Street is better. The name sounds like it will rise."

"And Sunshine City should be good too, right? Looking at future prospects, it seems like this stock has a lot of room for growth."

"In fact, with the Hong Kong stock market's momentum, all second- and third-tier real estate stocks are definitely worth buying. Today, the main focus must be on the major infrastructure sector."

"Isn't it time for the major infrastructure investment to come into play? If the Shanghai Composite Index breaks through 3100 points, it must be driven by the major infrastructure investment."

"Yeah, I think so too. I always feel that the new energy industry chain is a bit small and can't support the entire market."

"The new energy industry chain mainly fluctuates along with the ChiNext Index, right?"

"You can say that."

"In fact, the ChiNext Index performed better than the main board Shanghai Composite Index today."

"This shows that most of the active capital groups in the market are concentrating on small and medium-sized stocks."

"This should be a good thing, right?"

"It's definitely a good thing. The general rebound of small and medium-sized stocks in the market shows that the short-term sentiment of the entire market is continuing to strengthen, which means that the short-term ecology is recovering. There will be more short-term bull stocks and monster stocks emerging in the market."

"Now it seems that Beijiang Communications Construction's stock has definitely gone crazy."

"Need I say more? This stock is already a monster stock. I'm sure it'll hit the upper limit for the sixth time in a row tomorrow. Sigh... it's a pity I hesitated this morning and didn't buy it."

"Well, yes, I really regret not intervening this morning."

"If the stock is delisted later, I will intervene. Generally speaking, there will always be opportunities for people to get on board of the monster stocks. It depends on whether you dare to buy it."

"Relatively speaking, it is definitely better than Sugon shares."

"Yes, Sugon shares seem to be about to reach the top with a wave of shrinking single-digit limit. If this stock exceeds five single-digit limit, whoever wants to take it after the opening can do so. Anyway, I don't want to participate."

Along with the gathering on major stock exchange platforms across the Internet, countless retail investors in major internal investment exchange groups are also engaged in heated discussions.

The time of the market is in everyone's discussion.

Soon it was 1:00 p.m., and after a brief one-hour break in the two markets, the official continuous bidding trading time began again.

I saw that the clock hands had just passed 1 o'clock.

On the two stock markets, during the lunch break, the main theme of major infrastructure, which received the concentrated attention of a large number of investors and continued to be hotly discussed, especially the real estate development sector, a number of core real estate stocks, as well as second- and third-tier real estate stocks, all received a large amount of active buying in an instant, and their share prices rose rapidly.