From April 20 to 22, the 2022 Annual Meeting of Boao Forum for Asia is held in Hainan. This forum has a wide discussion on “Covid-19 Epidemic and the World: Promoting Global Development and Building a Common Future”. Ifeng finance channel reports the whole process.

Li Yong, chairman of Chinayong Investment Group, accepts an exclusive interview with Ifeng finance channel during the annual meeting. As the leader of a large-scale comprehensive investment enterprise, Li Yong shares some changes in the investment after the Covid-19 epidemic, as well as his views on new consumption, metaverse and other fields.

Li Yong points out that after the Covid-19 epidemic, almost all investment institutions are more cautious to reduce the expected revenue. At present, Chinayong no longer invests in the projects of start-up enterprises and tertiary industry in principle, because they are easily influenced by external factors. As for the hot topic recently, the metaverse, Li Yong says that this is only a concept at present, and they will not plan to invest in this field for the time being.

The new consumption favored by investment institutions last year will no longer attract attention this year. Is there a capital bubble? Li Yong believes that we should look at the so-called bubble dialectically. Without the influence of Covid-19 epidemic, these new consumer enterprises may still be very hot, which may attract a lot of investors.

Li Yong also talks about the current difficulties. He believes that the business travel, logistics and funds are common problems encountered by enterprises. In addition to the Covid-19 epidemic, the conflict between Russia and Ukraine has also had a certain impact on overseas investment of Chinese enterprises.

The detailed interview is as follows:

Ifeng Finance: This year is the third year of Covid-19 epidemic, and many enterprises experience a hard time. As an investment institution, what difficulties you are facing at present?

Li Yong：Different enterprises and different industries have different problems. But generally speaking, there are some common difficulties.

The first is the staff transportation. For example, almost everyone can’t travel to or leave from Shanghai and Jilin. Thus business trips for cooperation and some offline activities can’t be carried out as usual.

The second is the logistics. During this period of time, everyone pays more attention to the outbreak of Covid-19 in Shanghai and the State Council also holds a special meeting to solve this problem. At present, our logistics supply chain is seriously stagnant, the raw materials are on the road, and the products are still kept in stock in the warehouse, which is a waste.

The third is the funds. Some enterprises have no income after they have been forced to stop production, and may face the risk of breaking the capital chain.

The above problems are for the domestic enterprises. For overseas enterprises, the conflict between Russia and Ukraine has also brought a series of impacts on overseas investment of Chinese enterprises. Chinayong has more than 3,000 overseas staff and have investments in a dozen countries. We don’t know how the relationship of Russia and Ukraine will affect overseas investment enterprises in the next step.

Ifeng Finance: At present, China has also adopted some monetary and fiscal policies, such as RRR cut and subsidies. To what extent can these policies help enterprises?

Li Yong: It has a certain effect to some degree, but whether it can achieve the goal we imagined depends on the practical implementation.

Banks also have their own programme. The central government plans to provide small and medium-sized enterprises with financing loans, but how many banks have really implemented the policy? I understand them very well, so I can’t blame them. Because banks have the independent risk assessment system, they will not make loans to small and medium-sized enterprises, resulting in the increasing risk of the bank system. Banks are not inactive. There is a conflict, so the policy is difficult to be carried out.

In fact, in view of these difficulties of enterprises, the government has also introduced many supporting policies for small and medium-sized enterprises to relief the burden, such as tax reduction and tax rebate. It is definitely necessary for state-owned enterprises including SASAC to help and support small and medium-sized enterprises.

Ifeng Finance: Before the Covid-19 epidemic, we may invest in some potential start-ups. After the epidemic, the downward economic pressure is relatively serious, will we be more cautious in investment? What factors we will take into consider when we are going to invest in some enterprises?

Li Yong: Yes, you are absolutely right. All investment institutions are more cautious. We also reduce the expected investment income accordingly.

We organized a meeting and formulated several investment strategies a few days ago. Firstly, in principle, we will no longer invest in start-up projects at present, but invest in some relatively mature companies or projects with strong pressure resistance, including some technical projects, such as 5G, artificial intelligence and so on.

Secondly, we try to avoid the projects in the tertiary industry, because they are greatly affected by the Covid-19 epidemic, such as catering and service industries.

Ifeng Finance: New consumption such as tea, pasta and baking, which are favored by capital last year, have suffered close-down and layoff this year. The stock prices of listed companies such as Nayuki Tea have also plummeted. From the perspective of investment institutions, why does this phenomenon occur? Is there a capital bubble in the previous new consumption market?

Li Yong: The above-mentioned belongs to the consumer industry, which is greatly affected by the Covid-19 epidemic. In additional, the logistics industry has encountered some problems, which has a great impact on e-commerce.

To some extent, it is reasonable that there is a capital bubble due to the higher valuation of the new consumption market, but from another perspective, what if there is no outbreak of Covid-19 epidemic? For instance, Maotai costs more than 1,000 yuan a bottle, but we don’t think it is a problem due to market demand. Many people find the opportunity to buy a bottle of Maotai.

But the new consumption market is gone after the epidemic, and of course it is not worth the previous valuation. The market bubble may be real or fake. The real one refers that it is really not worth the valuation, and the fake one refers that it is greatly influenced by external factors.

Without the external factors like Covid-19, some new consumer brands may have high P/E ratio, and attract many investors. The P/E ratio of many stocks has been maintained at 100 times for a long time because of the recognition of investors. So whether the market bubble is a problem depends on your own opinion.

Ifeng Finance: Since the second half of last year, Metaverse, NFT and other concepts become hot topics, and many technology companies have started the business in the field of metaverse. Boao Forum also involves the metaverse this year. From the perspective of investors, what do you think of metaverse? At present, it seems that the metaverse is still considered as a concept. How long do you think it will take for metaverse market to be applied on a large scale?

Li Yong: Personally, I think metaverse is a concept at present without real business. Unlike Musk’s Starlink, it has been put into practice. No one can tell exactly the detailed implementation of metaverse and the impact on the promotion of the industry. Now it is more like a concept in the current stage.

Ifeng Finance: But now Tencent and ByteDance, including Facebook in the United States, start the investment in the metaverse. Facebook has even changed its name to metaverse. Are they interested in the future potential? Will Chinayong invest in the related enterprises?

Li Yong: Metaverse may have some achievements in the future, but it will take a long time before it is popularized. For example, although 5G has been used by many people, it still takes a long time to be industrialized on a large scale. In terms of investment, at present, we will pay attention to metaverse instead of practical investment and keep an eye on it.

Ifeng Finance: Recently, the central government proposes to speed up the construction of a unified national market. Do you think there are new investment opportunities? How can capital help build a unified national market?

Li Yong: There must be some opportunities. Take Chinayong Group as an example. Originally, 60% of Chinayong investment is in China and 40% is in the foreign countries. Sometimes, overseas investment may reach 45%. But now we have decided on a comprehensive retrenchment strategy, that is, to consolidate the existing overseas investment, stop new overseas investment, and shift the investment focus to domestic market.

I think that the unified national market will benefit the domestic circulation that is the main part of the dual circulation strategy. Many people argue that China has closed its doors to the outside world again and regressed to a planned economy. I don’t think so because developing a unified market is the true embodiment of the superiority of our socialist market economy. It mainly focuses on gathering resources, promoting competition and innovation, optimizing division of labor, and boosting the market growth, which is the goal of the policy.

On the other hand, if you don’t do the job properly in the domestic market, how can you carry out the projects in the overseas market? In fact, in the process of playing games with the United States in recent years, we also find that Chinese market is more important. We have overlooked a problem, that is, when the global economy is integrated, Chinese market is also part of the global market. Almost all other countries regard China as the largest market, so why don’t we do well in our own market?

Therefore, building a unified national market means that we should firstly attach more importance to the domestic market and then develop the overseas market. The construction of a unified national market is a strong support for us to participate in international competition.

Ifeng Finance: Just now, you also mention the conflict between Russia and Ukraine, which is actually a “black swan” factor. What is the influence on Chinese enterprises including Chinayong Group?

Li Yong: Now the biggest problem in Russia-Ukraine conflict is uncertainty. How long will this war last? Who will win the final victory? No one knows.

Russia and Ukraine are big exporters of energy and food, resulting in a big problem for the energy supply and food security of Europe. In my opinion, Chinese enterprises should ensure the risk when investing and doing business under the circumstances.

In addition, the measures taken by Europe and the United States to sanction Russia this time really surprise me, and I think they cross over the line. It is unreasonable for Europe and the United States to confiscate all the overseas property and funds of Russian enterprises, even the yachts of Russian plutocracy.

The report is forwarded to Ifeng Finance