In-depth Analysis of the Chinese Stock Market, New Energy Vehicles, the Gaming Industry, and Investment Strategies

In-depth Analysis of the Chinese Stock Market, New Energy Vehicles, the Gaming Industry, and Investment StrategiesThe Shanghai Composite Index hovered around 3400 points this week, with a fluctuation of only 1%, while the CSI 2000 Index rose nearly 2%, and the micro-cap index steadily increased. "Speculation in small-cap stocks" remains the dominant trend in the current market

In-depth Analysis of the Chinese Stock Market, New Energy Vehicles, the Gaming Industry, and Investment Strategies

The Shanghai Composite Index hovered around 3400 points this week, with a fluctuation of only 1%, while the CSI 2000 Index rose nearly 2%, and the micro-cap index steadily increased. "Speculation in small-cap stocks" remains the dominant trend in the current market. However, recent events have drawn market attention, such as the collapse of Jiyue Auto and the rise of the Chinese gaming industry, both warranting in-depth analysis. Simultaneously, subscription recommendations for personal pension funds and convertible bond investment strategies are also key investor concerns. This article will provide a detailed interpretation of these hot topics and investment strategies.

The Fall of Jiyue Auto: The Brutal Competition in the New Energy Vehicle Sector

The collapse of Jiyue Auto serves as a wake-up call for the new energy vehicle industry. This new energy vehicle company, employing 5,000 people and backed by two giants, Baidu and Geely, declared bankruptcy due to a broken capital chain in a short period, causing shock. Baidu, as the major shareholder, had previously invested nearly 8 billion RMB, aiming to promote the implementation of its autonomous driving technology. However, the high investment and high competition characteristics of the new energy vehicle industry led to the rapid depletion of this substantial investment.

Jiyue Auto's monthly sales were only slightly over 2,000 units, placing it in the second or third tier of the 2024 electric vehicle market, and it had been operating at a significant loss for a long time. Baidu, whose first-half revenue fell short of expectations, decided to scale back its business lines, demanding Jiyue achieve profitability to shed this loss-making burden. However, the brutal market competition made it extremely difficult for Jiyue to not only become profitable but even to reduce its losses in the short term. Ultimately, Baidu's unwillingness to continue investing led to Jiyue's decline, to the point where it struggled to pay employee social security, necessitating major layoffs, leaving only 100 employees to maintain minimal operations. These remaining employees even had to pay their own commuting expenses, sparking strong social criticism and trending on social media.

Recent news indicates that Baidu and Geely have paid November's social security contributions, but the company remains financially strained. More concerning is that Geely, as Jiyue's equipment supplier, now faces 1.5 billion RMB in receivables, which are highly likely to become bad debts.

From a strategic perspective, Jiyue Auto's failure reveals problems with Baidu's investment in the electric vehicle sector. While Baidu aimed to participate in the electric vehicle competition, its investment level was significantly less than that of competitors like Lei Jun, with only 8 billion RMB invested and employing a professional manager model. This clearly underestimated the intensity of competition in the domestic new energy vehicle sector. This serves as a warning to other companies: the new energy vehicle sector is not a guaranteed gold mine; it requires more precise strategic planning and stronger financial backing to survive the intense competition.

The Success of "Black Monkey": The Rise of the Chinese AAA Gaming Industry

In stark contrast to Jiyue Auto's failure is the rise of the Chinese gaming industry, exemplified by the game "Black Monkey." This highly-rated game (approximately 85 points) may still lag behind classic titles globally and borrows from previous works, lacking groundbreaking innovation, but has achieved massive success in the Chinese market.

"Black Monkey's" success proves that the Chinese gaming industry has entered a new phase, showcasing the charm of Chinese culture to global players. Commercially, "Black Monkey" has generated over 8 billion RMB in revenue, a massive return on its 400 million RMB development cost. This will attract more capital and talent into the Chinese gaming industry, fostering the creation of more excellent works. It is foreseeable that greater achievements on the global stage, such as winning a TGA (The Game Awards) award, are only a matter of time for Chinese games.

The Chinese Stock Market and Bond Investments: The Rational Investor's Choice

Recent market data shows that the volatility of the Chinese stock market reaches 23%, while the return is only about 4%, almost equivalent to the bond yield, with bond volatility being only one-tenth that of stocks. From the perspective of investment cost-effectiveness, Chinese bonds are clearly superior to Chinese stocks. Therefore, choosing bond investments is a more rational and shrewd investment strategy.

In comparison, the volatility of US stocks is less than 15%, with a return of about 14%; gold volatility is about 16%, with a return of 7%, lower than US stocks but still far better than A-shares. The current state of the Chinese stock market can be described as "working like a drug dealer, earning like a vegetable vendor," highlighting its high-risk, low-return characteristics.

Personal Pension Fund Subscription Recommendations: Rational Analysis, Investing Within Your Means

Many investors have inquired about subscribing to personal pension funds. My advice is: considering the long lock-up period of personal pension funds, individuals with an annual income below 200,000 RMB don't need to subscribe; purchasing directly in other accounts is more cost-effective. An annual income of 200,000 RMB is a threshold; those earning more should consider subscribing, as the tax avoidance effect increases with income. High-income earners with an annual income of over one million RMB can benefit from a discount of virtually 50%, so this opportunity shouldn't be missed.

Convertible Bond Investment Strategy: Embracing Volatility, Pursuing Excess Returns

In quantitative rotation operations, mistakes are inevitable. Perfectionists often excessively blame themselves for errors, but this creates greater psychological pressure. In the convertible bond market, the recent market downturn slightly reduced my account gains, but I'm not discouraged; I'm relieved. After five consecutive days of historical highs, adjustments, even significant ones, are inevitable.

While reducing positions in advance can mitigate risk, it might also mean missing out on gains. Therefore, sometimes "inaction" is better than excessive trading. Convertible bond market performance is closely related to the overall market trend. If the market performs like US stocks (long bull markets, short bear markets), convertible bonds may not outperform. However, the A-share market's "short bull, long bear" characteristic means convertible bonds are more likely to generate excess returns in volatile markets. Thus, even if today's decline makes the account performance look worse, I'm not worried; I look forward to excess returns after this adjustment.

Conclusion: In a market environment full of challenges and opportunities, investors need to remain rational, make prudent decisions, and choose appropriate investment strategies based on their risk tolerance and investment goals. They should also closely monitor market dynamics and adjust their investment strategies promptly to achieve stable returns in the market competition.