Hong Kong-based IT company has been blessed by Cheng Ge for 20 years. Founder commented on the technology network boom: scale and technology run out

Special interview

Author: Zhan Yongyu

2021-01-29 09:07

Last update date: 2021-01-29 09:09

When it comes to science and technology stocks, retail investors are catchy, nothing more than ATMXJ or FAANG. Asking about any technology stocks in Hong Kong, they are either speechless or give a more "near-weight" answer, such as Hong Kong TV﹙ 1137﹚, Xinyiwang﹙1686﹚, etc., but in fact, Hong Kong also has the only full-fledged technology network stocks-the technology alliance system engaged in commercial software development﹙0046﹚, star shareholders include CKH Holdings (0001) and independent stock commentators David Webb.

C&T Founder and Chairman Wu Changsheng, a Hong Kong-based IT professional, has been in the business for more than 30 years and has seen the development of Hong Kong’s IT industry. He also personally experienced the enthusiasm of the TechNet bubble in 2000. The company’s share price once soared nearly 30 times. The tide is rising.

History will not repeat itself, but there will surely be similarities. Nowadays, technology and Internet stocks that have multiplied gains are everywhere. After the madness of the year, how does Wu Changsheng view this heat wave?

Wu Changsheng, the founder and chairman of C&T, has been in the industry for more than 30 years and has witnessed the development of Hong Kong's IT industry.

(Photographed by Yu Junliang)

The name C&T is unfamiliar to ordinary retail investors, but it was once in the limelight.

The company was established in 1991 and successfully completed the software development of the Shanghai Stock Exchange's automatic trading system in the following year, and went public in 1998.

In the near future, the Asian financial turmoil intensified and the company's share price dived.

In 2000, it hit the dot com bubble (dot com bubble), and the share price of C&T once soared from 1.08 yuan to a historical high of 31.7 yuan. The bubble finally burst, and the stock price went away gracefully.

In 1997, the Asian financial turmoil hit the Hong Kong stock market and the stock prices of many companies plunged into the water.

(Stephen Shaver/AFP/Getty Images)

Revisiting the "sarcasm" of the Technet bubble in 2000

Speaking of this past event, Wu Changsheng left a lot of impressions on the market's style of "following red and white".

Soon after Kolianfu went public, there was an Asian financial turmoil, which dragged down the stock price. At that time, the government was implementing a public service digitization plan, and the "ESDlife Life Easy" platform was inviting public bidding. Helianfu intends to bid and therefore intends to raise funds from the market. I also found investment banks to do roadshows, "I rented a place at Furama Hotel and set up three stations, but only two stations came. In the meantime, one of the stations is half of the fruit investment bank, and the fund doesn’t know the science and network department. Hey!" Later, Changhe (0001) also intends to bid for the project. Looking at the technical background of China Federation of Science and Technology, Changhe won the bid and handed it to the Federation of Science and Technology for follow-up projects, one for the money and the other for the effort.

By the year 2000, technology and internet stocks started to speculate, and the stocks of IT companies such as C&T became expensive in Luoyang. Funds rushed to pursue them. "At that time, a securities firm asked if we wanted to take advantage of the market’s boom in allotment, although the company had no major fund-raising needs. , How ironic are you talking about?” In the end, C&T also allocated shares, and it was CKH Holdings who received the goods. Since then, C&T has become the second largest shareholder of C&T.

The ebb tide knows who is naked. In 2000, the technology and Internet stocks burst, and many companies were in vain, but C&T still exists. "Our land is not a bubble, our land is really tight!" The company is now the main force to the government and Large companies bury their hands and provide software system development services, such as government declarations, procurement procedures, and the Leisure and Cultural Affairs Department reservation system, etc., and also operate human resource systems for private companies.

"Even the water bills collected by your house company are printed out using the system developed by our company!"

Recalling the Internet bubble in 2000, Wu Changsheng left a feeling of "sarcasm".

(Photographed by Yu Junliang)

Today, Kewang companies are good at building platforms

Looking at the company's annual report, C&T has a stable business performance, earning about half a billion yuan per year, PE is only 9.9 times, and holding 250 million yuan in cash. It is said to be a technology stock, more like an industrial stock.

Wu Changsheng also joked: "I can see my track record and use gambling as a metaphor. It's hot but the odds are low. If it's cold, it can win a lot. Don't rule out running out!"

For 20 years after the Technet bubble burst, technology stocks have made a comeback, and there are many "big cold stocks", which are characterized by more expensive valuations and more love for the market. Meituan, which has made money at the beginning, has a price-earnings ratio of 800 times, and there is still plenty of interest. Otherwise, unprofitable companies are replaced by "market dream rate."

How does Wu Changsheng see this phenomenon?

"In the era of Dot.Com, technet companies only have concepts. If a company can tell you the old ones, some people will follow them! Now there are more substantial and mature technology." He continued, today technet giants are good at building platforms and burning Money grabs the market, and then slowly seeks to realize it, "The early eclipse was so exaggerated, it was to continue to expand its Community (ecosystem), after having a market, you can do a lot! It’s as if Facebook didn’t have ads in the early days, but later Do precision marketing; Alibaba (9988) has tens of millions of online stores, and there is not little money received, and there are many ways to make money. For example, if the merchants pay more, wait for users to find you easily."

Technet giants such as Tencent and Alibaba have one thing in common, that is, they have a large number of individual users.

(Profile picture)

Wu Changsheng believes that the current round of tech-net boom is not only a "pure technology" game, but also the result of market monopoly and financial operations. He asked himself whether it was difficult to participate. "A round, B round, C round of fundraising, he will not hesitate to pay for the market. , Ming eclipse is a scammer, all the way to make money is not bursting, mi ok! I played this game, one is a listed company, and second, how many orders can I make?"

Wu Changsheng pointed out that technology giants such as Tencent (0700) and Alibaba have one thing in common, that is, they have a large number of individual users, while C&T focuses on corporate customers. "The projects we do are relatively large. For example, the Shanghai Stock Exchange used to be For our customers, there is only one exchange in Shanghai and only one in Hong Kong. How big is Scale? You know that you use WeChat, but your company uses the HR system, maybe you don’t even know!”

Although the tech boom this time is different from 20 years ago, Wu Changsheng admitted frankly that he has reservations about high valuations.

﹙Profile Picture﹚

Technology companies focus on scale and technical capabilities first

Although the tech boom this time is different from 20 years ago, Wu Changsheng admitted frankly that he has reservations about high valuations and he does not dare to invest too much in these new economy companies.

"I can't use normal logic to analyze it. Sometimes it is affected by sanctions. It is no longer a pure technology company. You can just play it. There is no way to win." He used the property price as an analogy. It's as high as 100,000 yuan. I don't know if it's worth it, but the fact is that the sellers refuse to lower the price, and the market price will be so expensive. Even if you are worth tens of billions, some people believe it."

He pointed out that the market has a lot of hot money and low interest rates, and the big players are not in a hurry to sell goods, so the market price will not drop.

"You can't do anything about it, in fact, it's not too reasonable! There are more than 100,000 cases of the epidemic in the United States every day, but the stock market has hit record highs, and there is no way out for funds!"

Wu Changsheng used Wal-Mart as an example, saying that it has branches all over the world and has large-scale bargaining power.

(Screenshot of news video from YouTube channel "WJHL")

Returning to the fundamentals, as a technologist, he is familiar with many new technologies. What kind of IT companies does Wu Changsheng think will escape?

The answer is scale plus technology. "Walmart has branches all over the world. It has to purchase and cover. It is already large-scale, and the microphone has bargaining power. Or the technology has to go ahead, and others can catch up after a while!"

He pointed out that the most valuable technology company 20 years ago was the platform, such as telecom, but now the most valuable is cloud services.

The most popular cloud services in recent days include the concept of Saas, "Saas is not a new concept, it just changed its name. It was called ASP (Application Service Provider) 20 years ago." He said bluntly that the whole concept of ASP Like Saas, of course, now the technology is mature, the benefits are more, and there are mobile phones.

"Now I just use a pretty name, cloud or Saas when selling, but the actual foundation remains the same, but the scale is larger, and the technology and scale are more mature."

Wu Changsheng, who has been in the industry for more than 30 years, faced the hype concept and did not change his pragmatic style. The company went steadily. He laughed and said that it was because he was doing business and had no market dream rate, but he continued to make money and had a steady cash flow. "We don’t I will lose, but I won’t develop!"

Walmart, Alibaba, Tencent, Meituan, Hong Kong TV Xinyi.com Wu Changsheng