On 28 November, Huang Cheng, general manager of Investment Management Department of Guangzhou Finance Holding Group and chairman of Guangzhou Finance Holdings Capital Management, delivered a keynote speech titled “Thoughts on Investment Philosophies, Investment Opportunities, and Future of Financial Cooperation” at the International Finance and Investment Cooperation Forum of the Asia Youth Leaders Forum 2021.

The full speech is as below.

Distinguished guests,

Good morning! I am Huang Cheng from Guangzhou Finance Holdings Group, and I am delighted to attend the Asia Youth Leaders Forum. Firstly, I would like to thank the organizers for inviting me. At the same time, I wish the forum every success.

Just now, a few speakers shared their investment philosophies with us, and also gave in-depth analysis into future investment opportunities. I found it very inspiring. Now I would like to share with you my personal reflections on my work. Before I came, the organizers gave us some topics to consider for discussion: One was investment philosophies. Another was investment opportunities we are looking at. The third topic was the future of financial cooperation between Asian countries and regions. I will share with you our thoughts on these three topics.

As for our thoughts on investment philosophies, at present the world is experiencing a transformation unseen in a century; added to that are the great uncertainties surrounding the COVID-19 pandemic. We predict that for the foreseeable future everyone will have to be prepared for a domestic and international economic downturn. Set against this background, we believe that it is incredibly important to remember our original aspirations and maintain our strategic focus. From the perspective of investment philosophies, we have always adhered to the following three principles.

The first principle is undertaking a state-owned company’s responsibilities. Guangzhou Finance Holdings Group is presently the largest local domestic financial holding platform with the highest credit ratings. As you can all see, at present, Guangzhou Finance Holdings Group has applied to the central bank for a financial holding license. Only two companies have submitted such application. Our company’s characteristics dictate the logical starting point of our investment being to serve the Guangzhou Municipality, Guangdong Province, and the Guangdong-Hong Kong-Macao Greater Bay Area. Our new investment projects this year are all within the Guangdong-Hong Kong-Macao Greater Bay Area. Of course, this area is also one of the few economically dynamic areas in China – and even the world.

The second principle is adhering to our original aspirations of empowering the real economy. When we make investments, we pay attention not only to the financial value that projects we have invested in can generate for us, but also to the value that we can provide them – that is, what financial services we can provide them.

The third principle is sticking to long-term investment. We pay a lot of attention to the financial returns that companies we have invested can yield, but we care more about the excess earnings we can gain from investing in and empowering these companies. Be it the undifferentiated method or targeted method, probably the more important thing for us to consider is what kind of empowerment we can bring to the companies and what kind of role we can play in their leapfrog development. This is how we approach investment. These are the things we pay most attention to.

Concerning investment opportunities, what Guangzhou Finance Holdings Group cares most about at present is the following four fields: First is the green economy under “double carbon” strategy. Second is the digital economy. Third is high-end manufacturing. Fourth is biomedicines. As Guangzhou Biotechnology Center is our subsidiary, biomedicine is a field we are interested in, too. Personally speaking, I pay more attention to new energy because the “double carbon” strategy provides new growth points for the global economy. In this respect, both Guangzhou Finance Holding Group and Guangzhou Finance Holdings Capital Management this year have invested in several projects focusing on this area, and the amounts invested have been relatively large. I believe that there are a lot of investment opportunities in the field of new energy, and investments with the highest returns could lie in new-energy technologies.

In terms of mid- and short-term investments, at present we are paying a lot of attention to technologies that can improve power-generation efficiency and such power-generation cost-reduction technologies as power storage and ultra-high voltage, because only by improving these technologies can China break from traditional energy sources and move onto new energy sources. This is the only way we can achieve a balance. Those are my thoughts on investment opportunities. 

As to the future of economic and financial cooperation between Asian countries, to be honest, I personally have not put a lot of thinking into that. Before I came to the forum, I discussed with our team at the financial research institute in depth. They believe that there are four main points.

The first is currency cooperation. In order to ensure stability of balance of international payments, provide fluid support for financial stability, and promote trade and investment using local currency settlement, each Asian country should begin cooperating closely at the central-bank level and in swaps.

The second is cooperation in financial regulation and financial stability. There should be support for Asian central banks to develop certain convention mechanisms to monitor global and regional financial risks and offer recommendations.

The third is cooperation in new business forms of finance, for example, green finance, inclusive finance, as well as some new forms of fintech.

The fourth is cooperation in mid- and long-term investment and financing. There can be greater support for organizations in all Asian countries to establish platforms for mid- and long-term investment and financing with organizations in Nansha. There are many ways to do this, including setting up funds in the capacity of a QFLP together with organizations in Nansha to invest in infrastructure, renewable energy, technology, and advanced manufacturing in China’s mainland. Of course, we could also rely on QDLPs to funnel domestic capital into other Asian countries and regions and look for investment opportunities. Guangzhou Finance Holdings Group is also experimenting in those areas.

These are some of our thoughts. I hope they are useful to you. I'd like to thank the organizers once again for inviting me and to everyone listening to me. Thank you!