How do we find out the long and short targets?

Companies that are suitable for long position generally need to have the following five positive characteristics.

• The company has a “moat” - ensuring a high barrier to entry • Management integrity and excellence - Ensure that shareholders' interests are above and will not be fraudulent • A large space for industry development - ensuring high growth potential for the company's business • Equity incentives are in place – ensuring that companies and investors are aligned with their interests and demands • The stock price is “seriously undervalued” – ensuring a higher margin of safety after buying

Conversely, for companies with the following negative characteristics, we will consider sell short

• Industry faces policy uncertainty, such as companies that rely heavily on government subsidies or access • The industry or company has a seemingly attractive concept, but the entry barriers to the business are low and the competitive landscape may deteriorate rapidly • The corporate governance structure is unreasonable, large shareholders may harm the interests of minority shareholders, or the financial statements are clearly fraudulent. • The stock price is seriously overvalued and deviates significantly from the reasonable valuation range