Rebirth of the Capital Legend

Zhang Wei smiled and replied, "I don't think this is an exaggeration. In fact, with the domestic real estate industry entering a period of rapid growth, the differentiation among real estate companies is not obvious. As long as the group is willing to invest money and increase leverage during the industry's period of rapid growth, and actively acquire land to develop projects, small companies actually have more advantages and explosive potential in terms of scale growth and the growth of company performance than industry leaders."

The boss of Taihe Group, judging from his several speeches and his assessment of the current real estate industry.

I feel that his insights are quite unique and show a certain strategic vision.

Moreover, the multiple real estate projects developed by the company are operating well and have a good reputation among consumers.

The group's owner is willing and has the intention to actively leverage land acquisition and develop projects, demonstrating a strong drive for growth. At the same time, the industry's development and the country's ongoing urbanization efforts have put the entire real estate industry chain into a period of prosperity. Therefore, the improvement in the company's fundamentals and subsequent performance surge are only natural outcomes.

Although the current stock price is based on the same logic as Oriental Yuhong's bottom at that time.

It's not that certain yet.

However, there is still some certainty, especially given that a core leading stock in the entire market industry chain has been driven up by funds.

Stocks like these, which are still at a relatively low level, have strong potential for explosive growth.

It's quite rare.

When Taihe Group's stock surged to its daily limit today, I bought some shares on the board and established a base position.

The more I look at this stock now, the more I feel that it has the potential to perform well.

Of course, we don't yet know who the funds that are focusing on Taihe Group's stock today are, but I think these funds should not be underestimated.

Moreover, judging from the market trend during this period after the market opened...

Taihe Group's stock should be considered part of today's major infrastructure theme.

Aside from Beijiang Jiaojian, a core leading stock with high consensus among investors, this is probably the first stock in the same theme to hit the daily limit and form the strongest market momentum.

From this perspective, the market attention this stock is receiving is also rapidly increasing.

"Although there are some details in Lao Zhang's view that don't stand up to scrutiny, I think there are no major problems with the overall direction and the selection of targets we just discussed." Liang Jiucheng pondered for a while, and then said, "Taihe Group's stock performance today is indeed very strong. In fact, apart from Beijiang Jiaojian, it was the first stock in the major infrastructure theme to hit the daily limit up. Moreover, its market capitalization is moderate, with a small to a large circulating share, allowing both small and large funds to enter and exit freely and form a unified force."

I had somewhat overlooked this stock before.

Now, after Lao Zhang's reminder, looking back at this stock, it does seem quite attractive and indeed has huge speculative potential. It's worth considering investing in it.

“Alright.” Seeing that Liang Jiucheng also agreed with Zhang Wei’s point of view, Zhao Zhiyuan glanced at the Taihe Group stock and said, “Then let’s focus on it and give it a try. Relatively speaking… actually, I’m more optimistic about Shougang Group or Gemdale Group. After all, these two stocks have higher market recognition. However, I feel that the internal shareholding structure of these two stocks is still a bit messy. They haven’t formed a consistent capital force, and the trend is not very smooth. But looking back at the trend of Beijiang Jiaojian stock, the trend was also not very smooth.”

“The stock price movement of Beijiang Jiaojian was indeed not very smooth in the early stages, but its recent trend has been incredibly sharp. It feels like there are still major funds operating in this stock so far,” Zhang Wei said. “However, after the continuous limit-up, this stock is now in an acceleration phase. It is estimated that the major funds that have been operating in this stock will most likely start to reap the rewards.”

"The stock of Beijiang Jiaojian has exceeded the expectations of most investors in the market at this point, and has also fulfilled its mission," Liang Jiucheng said. "Investors who chase this stock at a higher price now will probably find it difficult to reap profits and exit unscathed."

"However, generally speaking, core leading stocks with extremely high market popularity and strong market recognition, even after consecutive limit-up days and the main funds start to reap the rewards, should not be in a peak state," Zhao Zhiyuan said. "Or, referring to Oriental Yuhong, it may form a high-level sideways state."

“Stocks like Beijiang Jiaojian, if their upward trend weakens, shouldn’t they be unable to hold steady?” Zhang Wei said. “Compared to Dongfang Yuhong, Beijiang Jiaojian is not in the same league in terms of market capitalization and circulating shares. The nature of the main funds operating within them is also completely different. Furthermore, the structure and market position of the two funds are also different. Dongfang Yuhong has reached its current position, and the funds that initially entered, ‘Huayi Capital’ and ‘Fuxing Road,’ have not shown any signs of leaving. Moreover, once the market experiences a surge, its impact on the entire market is still very significant, which is something that no other stock in the market can currently match.”

I think that the upward trend of Oriental Yuhong stock at this position is not yet over.

It is highly likely that after the adjustment, a new upward trend will form.

Of course, whether it will ultimately reach a market capitalization of hundreds of billions, as many investors expect, remains to be seen.

In my personal opinion...

I think there's a high probability that Oriental Yuhong's stock will reach a market capitalization of 100 billion yuan in the future.

After all, with the rapid growth and expansion of the domestic real estate industry.

The scale of the niche industry in which Oriental Yuhong operates will also expand rapidly, helping its performance and company revenue to grow rapidly. Under such circumstances, its potential to grow several times over is entirely conceivable in terms of trend development and medium- to long-term expectations.

Of course, we must also talk about sufficient explosive power and spatial imagination.

I think the real estate development sector is still the strongest.

After all, in terms of the speed of expansion, real estate development companies are naturally leveraged. Under the pro-cyclical development, their performance and scale expansion are several times, or even ten times, that of other low-leverage companies.

Therefore, I am firmly optimistic about Taihe Group's stock.

As long as the underlying logic of the real estate boom remains unchanged, and future expectations continue to improve.

Meanwhile, major real estate development companies are still rushing to expand their scale. Therefore, Taihe Group, with its significant expectation gap, is definitely a target that active funds in the market cannot ignore for speculation.

Amidst the heated discussion among several core members of the "Qilu Gang" group of major speculative investors.

At this point, the market trading time had unknowingly passed the first half hour of trading and arrived at the relatively stable period after 10:00 AM.

It was only after the market entered the 10 o'clock trading session that this was observed.

The market trends of each main theme have become increasingly distinct.

The major infrastructure sector has become the area where many major funds in the market have concentrated their efforts. However, in the technology sector, especially sectors such as internet software, internet applications, film and television media, semiconductors, electronic equipment, and communications, as well as sectors that have always been relatively unpopular such as agriculture, animal husbandry, and fisheries, major buying funds have been continuously flowing out, and market attention has been declining.

The two main sectors that are not as popular, but still attract a significant number of investors, are the smartphone industry chain and the new energy industry chain.

Despite the extremely divergent trends.

However, popular stocks that attract significant market attention.

Stocks such as Tinci Materials, Tianqi Lithium, Ganfeng Lithium, Changying Precision, Lixun Precision, Lens Technology, O-Film Tech, and Goertek generally showed a net inflow of main funds and relatively active buying.

As for the core hot stocks...

The stock of Beijiang Jiaojian remains locked at its daily limit, with no sign of the buy orders loosening.

Amidst a market-wide shift in capital allocation and a highly divergent landscape where major themes are showing mixed performance, the overall market is experiencing significant volatility.

The market index has remained relatively stable, trading within a narrow range, with neither significant downward momentum nor strong upward potential.

"It seems that's all there is to today's market trend." After the intense trading in the first 15 minutes, the market volume began to shrink, and the trends of the major market sectors all began to show a pattern of low-volume fluctuations. At this moment, Xu Qiao, a member of the "Shanghai Short-Term Trading Group," was closely watching the market trend. He smiled slightly, sighed softly, and said, "Breaking through 3100 points is still hopeless. Judging from the current market trend, the Shanghai Composite Index will probably continue to fluctuate below 3100 points for a long time."

“Market volume continues to decline,” Lao Zhang continued, picking up where Xu Qiao left off. “With declining volume, there’s no hope for a breakthrough. It feels like the market’s enthusiasm for buying isn’t enough, there aren’t enough positive factors, and not much off-market capital is coming in. I’m thinking… if the Shanghai Composite Index continues to be suppressed below 3100 points, over time, the upward momentum will likely weaken more and more, and the selling pressure on both the Shanghai and Shenzhen stock exchanges will probably increase.”

The saying "what goes up must come down" holds some truth, especially when the market is in a bear market.

The stock market crash in January created a significant amount of trapped capital in this range, and several major positive developments in recent months have failed to break through this level.

"As long as the vast majority of investors in the market still hold a bear market mentality..." Old Wu continued, "then it's basically unrealistic for the index to substantially break through the gap in shareholding during the January stock market crash. Actually, what we should be considering now is not how to break through 3100 points and form an upward trend, but whether the current hot sectors of the market can independently break out upwards if the index continues to fluctuate within the 1-point range of 3100 to 2900 points?"

Old Zhang responded: "The market index lacks upward momentum and the hope of a breakthrough is slim. However, this is the overall performance. In terms of specific parts of the market, especially a few core themes, the development logic and future expectations of these industries are indeed improving across the board. From a medium- to long-term investment perspective, the core leading stocks in these sectors should also have the opportunity for valuation repair and should be able to form a sustained upward breakthrough pattern, ultimately leading the market out of its predicament."

"The major infrastructure sector should have already formed a sustained upward breakthrough trend and a medium- to long-term trend, right?" Xu Qiao said. "As for the new energy industry chain and the smartphone industry chain, they are currently driven more by positive news. How these two sectors will develop in the future, and whether they can form a sustained upward breakthrough trend like the major infrastructure sector, will depend on the actual performance after the positive news has been fully reflected."

"That's right. Currently, the overall market index is unable to break through upwards across the board. It feels like the main reason is that the sectors that have formed a reversal are not enough to drive the valuation repair of the entire market, thereby fundamentally restoring the market's bullish sentiment," Lao Wu said. "If the two main themes, the new energy industry chain and the smartphone industry chain, can clearly form a reversal in their industry fundamentals, coupled with the large-scale infrastructure theme and the large-scale consumer theme that has already formed a cyclical reversal and is in a recovery cycle, and with the 'national team' stabilizing the large-scale financial theme, I feel that the rotation or linkage of these major themes still has a relatively large chance to drive the entire market and continuously restore the market's bullish sentiment."

“The improvement in fundamentals can indeed drive stocks out of the passive valuation repair, but the reversal of market sentiment and the overall market's shift from bear to bull market are probably not so easy,” Lao Zhang added. “This should still be more related to the liquidity of the macro environment, but the liquidity of the macro environment is indeed slowly improving, at least much better than it was six months ago.”

"Let's not talk about the market's shift from bull to bear..." Xu Qiao said, "I think as long as there are opportunities for the major themes to rotate continuously, the market is fine. A bull market is not necessarily easy to trade, and a bear market, especially a structural market, is not necessarily difficult to trade. At the current stage, I feel that the market is still easy to trade, and the market trends and developments of the major themes are also very layered."

Old Zhang nodded and said, "That's true. The overall market is a structural market driven by the main theme of large-scale infrastructure construction, supplemented by the new energy industry chain and the smartphone industry chain. Occasionally, blue-chip stocks such as large consumer and financial stocks will perform. Basically, in recent months, these main themes have been rotating back and forth. As for other main market themes, they seem to be still in the process of continuous fluctuation and bottoming out. They have not yet escaped the medium- and long-term downward trend, and the fundamentals have not shown any significant improvement."

This refers to the main sectors of the market and the corresponding core concept stocks.

I think the clearest trading strategy is to avoid these concept stocks altogether.

In a structurally driven market, the focus should remain on the core themes that attract the most market attention and have the greatest driving effect. After all, in a structurally driven market, the amount of active capital is limited and cannot cover everything. Only the themes with the highest market attention will have sufficient liquidity premiums.

"The term 'liquidity premium' is well-chosen," Lao Wu said. "One major reason for the large valuation gap between our A-share and Hong Kong stock markets is liquidity. In fact, even though our A-shares are currently in a clear bear market and liquidity has decreased significantly compared to last year, compared to the overall liquidity of the Hong Kong stock market, the overall liquidity is still very abundant, and it remains the world's second largest trading market. With this liquidity, there are actually many good opportunities in the market. We... don't need to worry too much, and there's no need to be too upset if we miss an opportunity. After all, as long as the market is open, trading opportunities will always exist."