Source: Broker China
Author: Promise
In the context of public fund giants collectively increasing their positions,$TENCENT (00700.HK)$It recorded the biggest one-day increase in the last 10 months.
According to the latest quarterly report, Hong Kong stocks have become the main target for fund managers to increase their positions. About half of the “A-share funds” managed by Zhang Kun are Hong Kong stock market values, while the “Shanghai, Hong Kong, and Shenzhen Fund” managed by many star fund managers has also experienced the phenomenon of “Hong Kong content” exceeding 50% or even 60%. Relevant sources explain the logic of increasing Hong Kong stocks mainly pointing to the Internet circuit. They believe that artificial intelligence, as the frontier of technological innovation, can effectively improve the efficiency of Internet companies and enhance the user experience, and is reshaping the ecological pattern of various industries such as advertising, gaming, and e-commerce. It is probably the biggest source of flexibility for public offering of Hong Kong stocks going south.
Tencent soared more than 5%, and Zhang Kun strongly increased his Hong Kong stock holdings
On April 22, Tencent Holdings, a major fund stock, recorded its biggest one-day increase in 10 months, surging 5.46%.$Hang Seng Index (800000.HK)$Surged 1.77%, including heavily held fund stocks$MEITUAN-W (03690.HK)$,$POP MART (09992.HK)$,$NTES-S (09999.HK)$They all performed well. Furthermore, news about Tencent taking the lead in building a next-generation artificial intelligence open innovation platform for medical imaging AI in the country has further stimulated the strong performance of the Hong Kong stock AI sector and medical sector. In the AI artificial intelligence sector,$FOURTH PARADIGM (06682.HK)$The closing price surged 10%.$CHINA LIT (00772.HK)$An increase of 5%,$XD INC (02400.HK)$An increase of 4%,$MEITU (01357.HK)$Up 2%; in the medical circuit,$EVEREST MED-B (01952.HK)$An increase of more than 8%,$KEYMED BIO-B (02162.HK)$Up more than 6%,$SINOPHARM (01099.HK)$An increase of more than 5%,$Hang Seng Healthcare Index (800804.HK)$The closing surged 2.2%.
It is worth noting that the market in the Hong Kong stock market is trending towards polarization between leading companies and leading companies. In the Hong Kong stock market adjustments some time ago, leading companies on each track did not drop significantly. While the index rebounded sharply on the 22nd, small market capitalization companies that had seriously overfallen in the previous period were still difficult to obtain financial recognition. Almost all of the active companies with high growth rankings were all clear large market capitalization companies.
The coverage direction of public funds is also generally directed towards competitive leading companies in the Hong Kong stock market.
According to the first quarter report disclosed by E-Fangda Blue Chip Select Fund, Star Fund Manager Zhang Kun continued to increase his positions in the Hong Kong stock market during the first quarter of this year, reaching about 43.99% of the stock positions held through Hong Kong Stock Connect, which is equivalent to about RMB 18.1 billion. Considering that the total market value of E-Fangda Blue Chip Select Fund's stock holdings is 38.8 billion yuan, this means that the “A-share fund” managed by Star Fund manager Kun Zhang accounts for close to 50% of Hong Kong stock investment.
Ruiyuan Fund is also increasing its position in the Hong Kong stock market. According to Ruiyuan Growth Value Fund's first-quarter report, the fair value of Hong Kong stocks invested by the fund through the Hong Kong Stock Connect trading mechanism was RMB 3,783 billion, accounting for 20.11% of the fund's net asset value at the end of the period. Ruiyuan Growth Value is jointly managed by Fu Pengbo and Zhu Yi. Similar to Zhang Kun's operation, Ruiyuan's Star Fund increased its position in Tencent Holdings in the first quarter of this year, holding 4.08 million shares, accounting for 6.6%, making it the fund's fourth largest stock.
The “Hong Kong content” of the Shanghai-Hong Kong-Shenzhen Fund soared
What is obvious is that in the context of the gradual recovery of the Hong Kong stock market, more and more fund managers are beginning to significantly increase the “Hong Kong content” of the stock pool based on cost performance.
According to the latest quarterly report, the Guangfa Shanghai-Hong Kong-Shenzhen New Start Fund, managed by star fund manager Lee Yiu-chu, has a market value of 1.33 billion yuan in Hong Kong stocks, and the total market value of the shares held is 2.33 billion yuan. This means that the significant changes in the Shanghai-Hong Kong-Shenzhen theme fund from A-shares to Hong Kong stocks highlight the cost performance ratio and attractiveness of the Hong Kong stock market.
Lee Yiu-chu, manager of the Guangfa Shanghai-Hong Kong-Shenzhen New Start Fund, which has Tencent as its largest stock holdings, believes that along the main line of medium- to long-term economic recovery, European interest rates may enter a downward cycle in the second half of 2024, and Internet technology companies are also one of the key areas to focus on. In the quarterly report of Guangfa, Shanghai, Hong Kong and Shenzhen, he said, “China's economic recovery is also a positive stimulus for outstanding Internet technology companies. Profit expectations in sectors such as social networking and lifestyle services with a stable pattern will rise steadily as economic expectations rise.”
Lee Yiu-chu further explained that the development prospects of the domestic Internet industry are full of vitality, especially in several fields such as artificial intelligence and cross-border e-commerce, showing outstanding growth potential. Among them, artificial intelligence, as a frontier of technological innovation, can effectively improve efficiency and enhance user experience, and is reshaping the ecological landscape of various industries such as advertising, gaming, and e-commerce. Meanwhile, with the recovery of global trade and the innovation of e-commerce platforms, cross-border e-commerce has also become a rapidly growing field. By optimizing supply chains, logistics services, and the use of digital tools, Chinese enterprises are expected to continue to occupy an important position in the global e-commerce sector.
Increasing “Hong Kong content” in the Shanghai-Hong Kong-Shenzhen Fund has brought significant performance flexibility to Guangfa's new starting point. Up to now, the yield of this product managed by Lee Yiu-chu has exceeded 17% this year, ranking 10% among similar funds.
Furthermore, the Qianhai Open Source Shanghai-Hong Kong-Shenzhen Advantage Selection Fund, managed by Qu Yang of Qianhai Open Source Fund and Star Fund, also showed the color of Hong Kong stocks. The fund's first-quarter report showed that the market value of Hong Kong stocks held accounted for 50.7% of the total market value. The allocation direction of Hong Kong stocks was mainly aimed at high-end consumption, TMT, electric vehicles, healthcare, etc. What is obvious is that the gradual increase in “Hong Kong content” may mean that in the current context, the Hong Kong stock market may bring opportunities for excess earnings.
Internet racetrack depressions are very attractive
Regarding the next trends and investment opportunities in the Hong Kong stock market, many star fund managers are also optimistic in their first quarter reports.
Shi Bo, chief investment officer of China Southern Fund, believes that the Hong Kong stock market is determined by both China's economic fundamentals and global liquidity. Based on this framework, although it still faces some uncertainty in the future, the Hong Kong stock market is not pessimistic: the Fed's austerity cycle is probably over. Although the timing of the first interest rate cut is uncertain, the general direction of interest rate cuts has been determined. As long as there is no major change in direction, overseas liquidity will not have a major impact on the market. Expectations for economic growth will be the key to influencing future market trends. The return of China's manufacturing PMI above the boom and bust line in March also triggered discussions in the market about marginal economic improvement. Although differences are still huge, the current valuation of Hong Kong stocks is in a depression, which reflects concerns about future economic growth to a large extent. This is fundamentally different from the market's optimistic recovery expectations in early 2023. Overall, the judgment on maintaining the fluctuation and upward trend of the Hong Kong stock market.
Zhang Kun, who has vigorously increased his holdings of Hong Kong stocks, also believes that one important reason stocks have a higher long-term yield than bonds is that stocks have continuous growth, and the necessary condition for high-quality stocks is to have long-term continuous growth. Therefore, the search for long-term growth should always be given considerable weight. Although in the period of high-quality development, the basic probability that the company will continue to grow rapidly is declining, we should never give up searching for moderate and continuous growth, and growth can also be obtained by searching for it in different segmented structures.
“Our long-term optimism about Hong Kong stocks has not changed, and the portfolio of investable Hong Kong stocks we manage has also been overbalanced.” Wang Guizhong, manager of Harvest Frontier Technology's Shanghai-Hong Kong-Shenzhen fund, believes that the economy and corporate profits can already be felt at the end of the first quarter. Recent manufacturing PMI data and the quarterly results and prospects of key Internet companies have exceeded expectations and are reasons for everyone to remain optimistic. The Internet and other Hong Kong stock technology industries declined after exceeding expectations in 2023. Under the reversal of macroeconomic expectations, there will be greater valuation flexibility. The first quarter will be more balanced, increasing the allocation of leading manufacturing companies. I believe that China's participation in deeper “re-globalization” will bring new growth space to Chinese companies, and many of these globally competitive companies have static price-earnings ratios of only 10 times, clearly underestimated, and are preparing for huge potential returns.
Editor/jayden
