In August, A-shares were still dragged by real estate and credit data headwinds, and the overall market was relatively weak. In overseas, U.S stocks faced the end of the rebound brought about by the change of market expectations against a persistent high inflation. Inflation is still not low, showing a strong resilience, while the Fed will keep charging ahead to tamp down inflation, didn’t leave room for the market to continue to interpret itself, and the market re-trades the pressure of inflation.

In July, A-shares and Hong Kong stocks fell notably.

In June, the market rose steadily, with no obvious adjustment, completely recovering the decline caused by the epidemic. In fact, in the first half of the year, China-related stocks have had the smallest decline amongst major global markets. We continue to maintain a positive investment approach.

In May, the market generally rebounded following the oversold at the end of April.

Fear and Anger: Contagious and Self-magnifying Diseases

The market fell sharply in March with the major indexes largely fluctuated by more than 10%. The China Concepts Stocks and the Hong Kong market were also extremely volatile.

The market was generally not volatile in February. SSEDI rose by 3% YTD with Coal sector substantially outperformed, up more than 10%. The PV industry rebounded in this period.

Our portfolio at the end of last year highlighted reasonable valuations and a visible long-term outlook. We suffered from a drawback, but after re-assessment, we believe that the portfolio is still solid. Some companies are gradually showing progress and their attractiveness is increasing.