Читать книгу Survival Kit for an Equity Analyst - Shin Horie - Страница 11

During my days as a backpacker in the mid-1980s, I spent about two months travelling around China when there were hardly any cars and thousands of bicycles on the street even in large cities. I was fascinated by the culture and people in this enormous country and felt the strong potential of the economy. Needless to say, I would never have predicted the country would come so far in terms of economic development. While I really enjoyed covering the capital goods industry where Japan had a very strong presence globally, I was looking for an opportunity to go to Hong Kong to get closer to Mainland China. At that time, most equity research activities related to Mainland China were done in Hong Kong. I went through extensive Mandarin language training for several months to prepare for the move. In 1996, the firm moved me to Hong Kong and I became the first equity analyst covering China H-shares with a Japanese passport. Back then, the concepts of an equity market and equity research were still in their early stages in Mainland China. Most listed companies at that time were state-owned enterprises and when I visited a power equipment company, my first interview as a China H-share analyst, the CEO gave me a 45-minute uninterrupted speech in response to my first simple question. By the end of it he hadn't answered my question either!

Despite some challenges, visiting countless number of companies and talking to management was an extremely rewarding experience. Many were at the very early stage of becoming commercial entities and were keen to learn from overseas companies regarding their internal organization, production, marketing, etc. As a non-local analyst with only a little local knowledge and connectivity, I tried to apply the basic global industry framework when analysing H-share companies. My assessment of the positioning of each company within the global competitive landscape was well received by investors not just regionally but globally too. Since I had spent a lot of time walking around factory floors of Japanese industrial companies, I was able to gauge the level of manufacturing proficiency of their Chinese counterparts by visiting the factories and asking a number of questions. At that time, many industries in China were extremely fragmented and I was able to provide insight into their potential consolidation process by leveraging the experience of developed markets. I was extremely happy to find that such skillsets gained through analysing Japanese and global capital goods companies was, and still remains, helpful to those investing in the China market. Although I was not aware of the concepts then, this was probably my first real attempt to use ‘time machine’ and ‘pattern recognition’ analysis that is discussed in Chapter 1. The fact that such tools were so powerful that even an analyst who was very new to China coverage was able to differentiate and add value almost immediately was a valuable lesson. Although I felt an extreme bull on Chinese industrial development at the time, in hindsight I was actually very conservative in my projections.