Recently, the quarterly report of the fund has been unveiled one after another, and the latest operation trend of star fund managers is particularly worthy of attention.

On April 15, Qiu Dongrong, a fund manager, centrally disclosed that he had been strategically bullish on the Hong Kong stock market since the fourth quarter of last year. Judging from the quarterly report, the funds he managed that could invest in Hong Kong stocks also continued to substantially increase their positions in Hong Kong stocks in the first quarter of this year. Meituan-W, which is listed on the Hong Kong Stock Exchange, also replaced Yanzhou Mining Energy and newly entered the number one heavy stock of Zhonggeng value pilot and Zhonggeng value quality funds. China Hongqiao and CNOOC Limited, two Hong Kong stocks, have also been promoted to the second and third largest positions in the value of Zhong Geng.

In addition to Hong Kong stocks, in the quarterly report, Qiu Dongrong also clearly valued the financial and real estate sectors in the market value stocks, electrolytic aluminum, coal chemical and other energy stocks, and subdivided leading companies with unique competitive advantages in the manufacturing industry in a broad sense.

He also mentioned his views on the convertible bond market. On the whole, he believes that the current relatively high valuation of convertible bonds as a whole will further reduce the allocation ratio.

Let's take a look at the latest quarterly report of the fund.

Its fund maintains a high position.Substantially increase the proportion of Hong Kong stocks

Singing long and doing long Hong Kong stocks, Qiu Dongrong showed a consistent action in the first quarter of this year.

In October last year, the medium Geng value pilot mixed fund holders meeting resolution came into effect, successfully bringing the Hong Kong stock market into the scope of the fund investment. In the following two quarters, Qiu Dongrong continuously increased his position in the Hong Kong stock market.

Qiu Dongrong said in the mixed quarterly report of Zhong Geng value pilot that by the end of the first quarter of 2022, the valuation of equity assets had dropped significantly, and the equity risk premium of CSI 800 had risen to 0.74 times the standard deviation above the historical average. in terms of valuation, the attractiveness of equity assets has increased. Based on the asset allocation strategy of fundamental risk and risk premium, the Fund maintained a relatively high equity allocation position during the reporting period and actively increased the allocation ratio of Hong Kong stocks.

It is also mentioned in the quarterly report of the Fund for one-year holding period that a relatively high equity allocation position was maintained during the reporting period, and the allocation ratio of Hong Kong stocks continued to maintain a high level within the contractual range of this fund.

According to the first quarterly report, by the end of the first quarter of this year, the average stock position of the four funds managed by Qiu Dongrong reached 92.03%, an increase of 1.21 percentage points compared with the end of last year. The three funds with one-year holding of Zhonggeng value quality, medium Geng small market value and medium Geng value pilot continued to maintain more than 90% of their positions, and the stock position of Zhonggeng value Smart Fund increased significantly to 89.13% from 82.77% at the end of last year.

The two funds that can invest in Hong Kong stocks, namely, the medium Geng value pilot and the medium Geng value quality, continue to increase their investment in Hong Kong stocks. The proportion of Hong Kong stocks led by the medium Geng value has increased to 42.95% from 18.28% at the end of last year. At present, the Hong Kong equity assets invested by the two funds account for more than 40% of the fund's net asset value.

Meituan newly entered the number one heavy stock of his two funds.In the first quarter, the total market value of Meituan exceeded 1.2 billion yuan.

Not only significantly increase the investment position of Hong Kong stocks, a number of Hong Kong stocks are among the top 10 stocks in the first quarter of the fund managed by Chiu Tung-wing.

According to the mixed quarterly report of Zhonggeng value pilot, Meituan-W replaced Yanzhou Mining Energy as its largest stock, while at the end of last year, Meituan did not appear on the list of shares held by Zhonggeng value Pilot. this means that the 6.3368 million shares held by Meituan were bought in the first quarter of this year, and Meituan's market value exceeded 700 million yuan at the end of the quarter.

Affected by the overall adjustment of the Hong Kong stock market, Meituan's share price continued to fall sharply in the first quarter of this year, falling more than 30 per cent in the first quarter of this year, closing at 154.1 yuan as of April 13, rebounding nearly 50 per cent from a low of 103.5 yuan in mid-March.

In addition to Meituan, the second to fourth largest positions in the mixed quarterly report of Zhong Geng value are Hong Kong listed China Hongqiao, CNOOC Limited, and Kuaishou Technology-W. CNOOC Limited rose from the fifth largest at the end of last year to the third largest at the end of the first quarter. China Hongqiao and Kuaishou Technology-W were all among the top 10 stocks in the first quarter.

Among the top ten stocks, Luxi Chemical Industry, China Overseas Land & Investment, Yanzhou Mining Energy, Orchid Kechuang, Yongyi shares, China Pacific Insurance and Xinlong Health pulled out of the top ten stocks in the first quarter.

Another one-year holding fund with medium Geng value and quality, which can invest in Hong Kong stocks, also made a similar move. Meituan-W also entered the first heavy stock of the fund, holding Meituan with a market value of more than 550 million yuan at the end of the quarter.

The other two funds that he manages only invest in the A-share market are mainly focused on regional banks, chemical industry, aluminum and other major sectors.

Take the medium Geng small-cap value fund as an example, Sunong Bank replaced Orchid Kechuang as its first heavy stock, Luxi Chemical newly entered the second largest stock, and Liuyao continued to rank third. The top ten heavy stocks also newly entered Aerospace Morninglight, Changshu Bank, Orchid Kechuang, Jinhong Group and FAW Fuwei withdrew from the top ten stocks.

The valuation of Hong Kong stock market is cheapLiquidity risk is fully released.

In the quarterly report, Qiu Dongrong is also firmly optimistic about the value stocks represented by resources and energy, some Internet stocks and pharmaceutical technology growth stocks in Hong Kong stocks, and he also sets out several major reasons why he is optimistic about Hong Kong stocks:

(1) cheap valuation.

After continuous adjustment, the price of Hong Kong stocks is relatively low or the price is cleared thoroughly, and the valuation level of Hong Kong stocks as a whole is absolutely low. The value stocks of Hong Kong stocks are cheaper than their A-shares counterparts, and the corresponding dividend returns are more attractive. On the other hand, the growth stocks represented by the Internet, science and technology, and pharmaceuticals have also fallen back to a very attractive level, and many of the constituent stocks in the Hang Seng Technology Index have withdrawn more than 80%, while cheap valuations can well meet the stock selection criteria of our undervalued investment strategy.

(2) fundamentals are sound or are expected to continue to improve.

The value stocks of Hong Kong stocks are mainly the leading companies in telecom operators, real estate, banking, insurance, energy, resources and other industries, and are the best and backbone force in China's economy. These assets are of very high quality and can best withstand fundamental pressure, while profitability risk is low and has a certain degree of growth. Hong Kong stocks, such as pharmaceuticals, API, consumer growth companies, the business model is relatively simple, but solid business, broad prospects.

Specific to the Internet companies in Hong Kong stocks, 1) the business of these companies is deeply embedded in the Chinese economy, and the core needs they face are growing, such as entertainment, consumption, social networking, and so on. At the same time, the monetization ability and liquidity of these companies continue to improve.

2) Regulatory policies restrict the excessive expansion of the industry, restrict the capital expenditure of these companies, especially cross-sector and cross-industry capital expenditure, and at the same time force relevant companies to further focus on their core business, constantly enhance their core competitiveness, and build solid business barriers, so that profitability and hematopoiesis continue to improve.

3) due to the decline in valuation, from the expansion in the context of high valuation to the contraction in the context of low valuation, the leading companies have shifted from large capital expenditure and investment cash outflows to positive operating cash flow. on the contrary, the return on investment is expected to increase significantly.

(3) the release of liquidity risk is sufficient.

The impact of policies at home and abroad, the withdrawal of overseas funds and the slowing of southward capital inflows have led to a sharp fall in stock prices. But the negative side of policy is weakening, regulatory policies, both overseas and domestic, may have peaked and the policy pendulum will shift to the other side. Once the internal policies are stable and protected, the policy of mutual trust between China and the United States has made progress, cooperation in the financial sector has been strengthened, and liquidity risks have been fully released.

Attach importance to value stocks with particular emphasis on supply factors and fully adjusted growth stocksBe optimistic about regional banking stocks, electrolytic aluminum, coal chemical industry and other sectors.

Qiu Dongrong also shared his views on the future, saying that the current difficulties and exposed problems will strengthen economic policies, positive policies will reduce the risks corresponding to economic fundamentals, and at the same time, inflation expectations are high around the world, so China's "steady growth" and global "inflation prevention" are the most important macro background at present.

From the perspective of the internal valuation pricing structure, although there is an obvious decline in the A-share growth industry, the absolute valuation level of high-valued stocks represented by the market growth stocks is still on the high side, still above 80% in the history. Structural overvaluation and undervaluation of A shares still coexist, market opportunities still focus on structural opportunities and prevention of structural risks, value stocks with emphasis on supply factors and growth stocks with full adjustment and bright long-term prospects, it is possible to obtain larger excess returns by seizing structural opportunities.

Apart from being strategically bullish on Hong Kong stocks, he is also optimistic about the following major investment directions:

First, the market value stocks in the finance, real estate and so on.The allocation logic lies in: in the financial sector, we are optimistic about the regional banking stocks that are related to the manufacturing industry chain, serve the real economy and have unique competitive advantages, which are relatively simple and have limited exposure to real estate risks. it shows the characteristics of sound operation, low fundamental risk, low valuation and high growth.

Real estate companies focus on the leading central enterprises with high credit and low financing costs, and these companies will be the beneficiaries of this round of risks. We believe that the long-term demand for real estate is still there, and the short-and medium-term is also an integral part of steady growth. With the adjustment of real estate policy and the support of financial resources, systemic risk will decline, and this kind of companies will be more resistant to risk and have a high possibility of extension expansion. and under the circumstances of extremely low valuation, there is still a good potential for return after the real estate market is stable in the future.

Second, energy and resources companies.The logic of allocation mainly lies in: (1) the medium-and long-term demand is still stable and growing continuously.

(2) under the influence of environmental protection and carbon neutralization factors, the level of long-term capital expenditure of many resources and energy companies at home and abroad is not high, the supply elasticity is insufficient, the supply constraint and marginal cost rise in the medium term, and the commodity price center inevitably rises, and there is a price upward risk under geopolitics and other emergencies, and the value of stock assets increases significantly. In terms of market pricing and valuation, such companies are regarded as cyclical assets with extremely low valuation, good cash flow, low capital expenditure, high dividend yield and high expected rate of return corresponding to the current price.

(3) Global primary energy prices have risen sharply under the disturbance of lack of capital expenditure in long periods and geopolitics in short periods. Although domestic coal prices have also risen to a great level, due to China's rich coal resource endowment and government regulation, the unit calorific value of coal still has a significant advantage over overseas oil and gas. In this context, the domestic prices of domestic enterprises in relevant downstream industries are relatively safe, the global competitiveness and cost advantages at the operational level have been improved, and the excess profits of the corresponding links are sustainable. Therefore, we increase the allocation of companies that have more advantages in energy utilization, such as electrolytic aluminum, coal chemical industry and so on.

Third, small and medium-sized value stocks and growth stocks.It is mainly a subdivision leading company with unique competitive advantage in the manufacturing industry in a broad sense. It includes not only the traditional manufacturing industry, but also the manufacturing industry with technical process barriers, such as new materials, components, components and so on. Since the epidemic, the advantage of high-quality production capacity of China's manufacturing industry has been further expanded, and the establishment and deepening of competitive advantage is still going on, which is expected to improve the profitability and quality of the manufacturing industry. Therefore, there is still much to be done in mining cost-effective companies in the manufacturing industry in a broad sense.

He said that he will adhere to three standards, namely, demand growth, supply contraction, and sub-industry leaders, such as chemical industry, non-ferrous metal processing, mechanical processing, light industry, wind power equipment manufacturing, and so on. We can dig out real undervalued small-cap value stocks and small-cap growth stocks.