Author: Wang Xiaoxing
Source: brokerage China
Qiu Dongrong published the four Seasons report of the Management Fund!
In the last quarter of 2022, all four funds managed by Mr Qiu recorded positive returns, while achieving both equity positions and Hong Kong stock positions. Positions, some funds of the top ten heavy stocks "change blood" a lot, another part of the fund is new to the coal stocks, Meituan fell out of the top ten stocks.
Qiu Dongrong made a detailed review of the macro situation in the past year in the four Seasons report. He believes that investors should shift from low-risk preference to positive expectations of economic resilience. In his view, at present, only stocks such as the growth of the market are still at a neutral level, and other types of styles are basically in the undervalued area, from large-cap stocks to small-cap stocks, from value stocks to growth stocks, there are better layout opportunities. Resources, energy companies, real estate, financial and other value stocks as well as the Hong Kong stock market will be his focus areas in the future.
Both equity positions and Hong Kong stock positions have increased.
All four funds managed by Mr Qiu increased their equity positions in the fourth quarter of 2022.
Specifically, the equity position led by Zhong Geng value has risen slightly in several consecutive quarters. At the end of the second quarter of 2022, the equity position rose to 90.14%, to 91.61% at the end of the third quarter, and to 92.34% at the end of the fourth quarter. Medium Geng small-cap equity positions rebounded slightly, with the fund's equity positions falling slightly from 93.77% to 92.36% at the end of the third quarter of 2022. At the end of the fourth quarter of last year, equity positions rebounded to 93.17%. The same is true of the smart equity position of Zhong Geng. At the end of the second quarter of 2022, the equity position was 93.11%, dropped to 89% at the end of the third quarter, and rebounded to 93.72% at the end of the fourth quarter. The equity position of medium Geng value and quality also rebounded to 93.38%, compared with 91.78% in the previous period.
Two Hong Kong stock funds, medium Geng value pilot and medium Geng value quality of Hong Kong stock positions have also improved significantly. Specifically, the proportion of Hong Kong stock positions led by Zhonggeng value in equity positions increased to 48.89% from 44.91% in the previous period, while the proportion of Hong Kong stock positions in equity positions with medium Geng value and quality increased from 47.45% in the previous period to 49.39%.
In terms of fund performance, all four products recorded positive returns in the fourth quarter, of which 2 products received excess returns compared to the benchmark, and 3 products achieved excess returns of 100% or more since their inception.
Specifically, Zhonggeng value pilot closed up 3.16% in the fourth quarter of 2022, with an excess rate of return of-1.79%. The net growth rate since the entry into force of the contract is 127.29%, with an excess rate of return of 99.9%. The value of the medium Geng small market rose 6.59% in the fourth quarter of 2022, and the excess rate of return was 4.21%. Since the entry into force of the contract, the net value growth rate has been 124.6%, and the excess rate of return has reached 120.6%. In the fourth quarter of 2022, the value of Zhonggeng Smart closed up 5.76%, and the excess rate of return was 4.54%. Since the entry into force of the contract, the growth rate of net value has been 113.9%, and the excess rate of return is 103.04%. In the fourth quarter of 2022, the value and quality of Zhonggeng increased by 2.86%, the excess rate of return was-1.97%, the growth rate of net value since the entry into force of the contract was 49.03%, and the excess rate of return was 67.08%.
Meituan increased his coal holdings and reduced his positions, and some funds had a big exchange of heavy stocks.
There is not much change in the top ten heavy warehouse stocks led by the value of Zhong Geng. The relatively big bright spot is that Meituan fell out of the top ten heavy warehouse stocks and was replaced by Hong Kong coal mining energy.
Last year, Qiu Dongrong's operation of Hong Kong stock Internet companies once attracted the attention of the industry. In the quarterly report of Zhong Geng value pilot in 2022, Meituan directly reached the top of the largest heavy stock, and Kuaishou Technology also parachuted into the fourth largest stock. In the second quarterly report since then, Meituan and Kuaishou Technology continue to be heavily positioned, but the proportion of heavy positions has declined, with Meituan ranking fourth and Kuaishou Technology eighth. Entering the third quarter, Meituan fell to the tenth largest stock, while Kuaishou Technology directly left the top ten stocks. In the recent disclosure of the four Seasons report, Internet companies have left the ranks of the top ten heavy stocks in the fund.
In addition, the real estate stock Yuexiu real estate, non-ferrous metal stocks China Hongqiao has been a relatively large increase, bank shares Changshu Bank has been reduced more. Among them, China Hongqiao performed well in the fourth quarter of 2022, recording an increase of 20.78 per cent.
Medium Geng small market value of the top ten heavy stocks "change blood" more. Jindi Group, Guanghui Energy, Changshu Auto Decoration, Guangxin shares and Liuyao Group are all newly added to the ranks of the top ten heavy stocks in the fund. Shenhuo shares increased more than the previous period, while Chihong zinc and germanium, Kanghua Biology, Chuanyi shares and Venture Huikang reduced their holdings compared with the previous period. Among them, Chuanyi shares are reduced by a large extent. In terms of stock performance in the fourth quarter, Venture Huikang closed up 27.58%, Changshu Auto Decoration closed up 20.88%, Liuyao Group closed up 19.68%, Guangxin shares closed up 15.18%, Chuanyi shares closed up 10.68%.
It is worth noting that Chihong zinc and germanium, Shenhuo shares, Sichuan instrument shares are newly added to the list of the top ten heavy stocks in the fund in the last quarter. After this adjustment, the heavy stocks of this fund pay more attention to energy and resources companies.
Zhonggeng value smart top ten heavy stocks have also been changed, with the addition of Guanghui Energy, Jindi Group, China Shenhua Energy and Chengyitong. In addition, Shenhuo shares, Changshu Auto Decoration, Liuyao Group, Kanghua Biology have been increased, Sunong Bank and Poly Development have been reduced. Among the top 10 heavy stocks, Changshu auto decoration performed better, closing up 20.88%, followed by Liuyao Group, which closed up 19.68%, and Chengyitong, which closed up 15.02%.
Medium Geng value and quality of the new heavy stocks include Gagon Mine Energy and COSCO Sea Energy, in addition to the other top 10 heavy stocks, China Hongqiao, Chihong Zinc Germanium, Yuexiu Real Estate increased their holdings. China Overseas Land & Investment, CNOOC Limited, Shenhuo shares, Changshu Bank, Wangneng Environment were reduced. Among the heavy stocks, China Hongqiao performed prominently.
The fundamentals are easy to exceed expectations, you might as well imagine
In the thousands of words quarterly report "small composition", Qiu Dongrong made a detailed and careful review of the macroeconomic situation over the past year. He said that over the past year or so, China's "steady growth" and global "anti-inflation" are the most important macro backgrounds, and now these are undergoing positive changes, the direction has been given, and the range is even more critical. Specifically, there are three points.
First, the switch of epidemic prevention and control is more active and focused on economic fundamentals. In the past few years, the epidemic has had a significant impact on fundamentals, as well as on the performance of different markets and industries, and what we have in common is the significant downside risk feedback with pricing. In Qiu Dongrong's view, the higher-than-expected adjustment of epidemic prevention and control and the decline of their own economic cycle are coming to an end, and all subjects will focus more on economic fundamentals, have stronger consistency in policies and actions, expand domestic demand, boost confidence, and maintain steady growth. "this means that it is time to participate in the market start again, enterprising mentality, active research, prudent investment." He said.
Second, the economy is focused on domestic and has great flexibility. While overseas economies are heading into recession, inflation depends on the timing of high interest rates and rising unemployment. He believes that the dislocation of internal and external economy, policy, and rhythm will make the investment focus more on the domestic market, the policy focus will return to the economy, from the medium-and long-term supply side to expanding domestic demand, and the short-term core is to stimulate market confidence and let the economy restart into a virtuous circle. "regardless of the current weak economic reality, we might as well imagine the economic outlook to a certain extent. Efforts at a low base are easy to exceed expectations, and consumer real estate also has sufficient conditions to achieve a certain degree of flexibility." He wrote in the quarterly report, "accordingly, in stock investment, when the impact of the epidemic weakens in the future, the fundamentals are easy to exceed expectations, and should shift from low-risk preference to positive expectation of economic resilience." The mismatch between fundamentals and stock pricing corresponds to opportunities in time and space. "
Third, the pressure and friction have eased, and market confidence has been restored. In Qiu Dongrong's view, although the broad sense of liquidity is more abundant this year, but in the case of multiple pressures, the micro main body cannot be active. When the marginal pressure and friction ease, the probability of both market confidence and fundamentals rising is also increasing. "back to the valuation, the overall valuation level of A shares in various indicators are in a cyclical low region, generally at this valuation level corresponds to systematic opportunities, opportunities outweigh risks." He said.
As for the current macro situation, Qiu Dongrong believes that China's "steady growth" and global "anti-inflation" are the most important macro background. Domestic epidemic prevention measures are constantly being revised, and the marginal impact on the economy is expected to weaken. The risks are mainly reflected in the high unemployment among young people, the persistence of property problems, and the need for more accurate and effective policies to restore confidence.
The valuation is still at the absolute bottom, so be optimistic about these directions.
In summing up his investment strategy, Qiu Dongrong said that he and his team actively allocated equity assets in the fourth quarter, maintaining a high proportion of equity assets allocation, while also actively allocating Hong Kong stocks.
In his view, in the fourth quarter of 2022, the domestic epidemic prevention and control policy turned to exceed expectations, but the economy was still weak, A shares fluctuated slightly, 10-year treasury bonds rose slightly, and the equity risk premium of CSC 800 reached 0.90 times the standard deviation. But the ratio of dividend yield to maturity yield of 10-year treasury bonds is the highest since 2009. Based on the asset allocation strategy of equity risk premium, he believes that the valuation of equity assets is still at the absolute bottom, corresponding to a high level of risk compensation, which is a systematic allocation opportunity.
It is worth noting that Qiu Dongrong believes that at present, only stocks such as the growth of the market are still at a neutral level, and other types of styles are basically in the area of undervaluation, from large-cap stocks to small-cap stocks, and from value stocks to growth stocks. there are better opportunities for layout. In addition, Hong Kong stocks rebounded V-shaped in the fourth quarter, but each valuation dimension is basically within the historical 20% quantile, which is still highly attractive in the long run. He said that he will maintain the judgment of systematic opportunities and continue to allocate strategically.
With regard to the future investment ideas of the fund, Qiu Dongrong said that he will adhere to the concept of undervalued investment and build a cost-effective investment portfolio by selecting stocks with reduced fundamental risk, positive profit growth and cheap valuation. strive to achieve sustainable excess returns.
Specifically, for the pilot of Mid-Geng value, the quality of Mid-Geng value and the flexibility of Mid-Geng value, the focus on the investment direction includes the following two aspects.
First, value stocks with historically low valuations focus on supply-side contraction or rigid industries and their potential resilience in the event of a recovery in demand, including real estate and finance in the market value stock. resource companies and energy companies represented by base metals. At the same time, the value stocks of Hong Kong stocks are cheaper than the corresponding A shares, at the same time, the corresponding dividend yield level is very high, and its implied expected return level is very high.
Second, low-valued but growing growth stocks, focusing on domestic demand growth and supply of cost-effective companies with competitive advantages, the main industries include pharmaceutical manufacturing, non-ferrous metal processing, chemical, auto parts, electrical equipment and new energy, light industry, machinery, computers, electronics and so on.
For the value of the medium Geng small plate, focus on the following three directions. First, small and medium-sized growth stocks and value stocks. Second, resource companies and energy companies represented by basic metals. Third, real estate, finance and other value stocks.
Edit / phoebe