Star fund manager Qiu Dongrong is managing the fund's third quarter report, which has been released.
On the early morning of October 20th, Qiu Dongrong, Deputy General Manager and Chief Investment Officer of Zhonggeng Fund, announced all five fund products under his umbrella and released their 2023 third quarter reports. As of the end of the third quarter of this year, the total scale of funds managed by Qiu Dongrong was 26.229 billion yuan, a decrease of 6.67% compared to 28.103 billion yuan at the end of the second quarter.
From the positions disclosed in the third quarter report, it can be seen that the representative fund of Qiu Dongrong, Zhonggeng Value Leader, has entered two new stocks, mainly increasing its holdings in the consumer, pharmaceutical, and industrial industries, while reducing its holdings in consumer, technology, and other fields.
From the perspective of performance, as of October 19, 2023, all four funds under Qiu Dongrong's banner had negative annual returns, and all three funds had lower annual returns than the benchmark return for performance comparison in the same period.
Qiu Dongrong pointed out in his third quarter report that from an investment perspective, this is a stage where opportunities are widely distributed, especially for some growth stocks with promising prospects whose valuation starting point is close to the level at the end of 2018, and many directions are emerging, which cannot be simply classified as dreams and stories. It is worth researching and forward-looking layout. We are more actively allocating high-quality growth stocks, focusing more on the continuous improvement of the company's fundamentals, high growth and elasticity of profitability, and even buying some 'stories' and' dreams'
Xiaopeng Automobile and Greenleaf Pharmaceutical entered the top ten heavy holdings for the first time
According to Wind data, there are a total of 5 funds under the management of Qiu Dongrong, including Zhonggeng Value Navigator, Zhonggeng Value Flexible Allocation, Zhonggeng Value Quality Held for One Year, Zhonggeng Hong Kong Stock Connect Value Closed for 18 months, and Zhonggeng Small Cap Value. Among them, the Zhonggeng Hong Kong Stock Connect was closed for 18 months as a newly established product on January 11, 2023. Except for this product, as of October 19, 2023, the other four funds had negative annual returns. Except for Zhonggeng Value Leader, the remaining three funds all underperformed the performance comparison benchmark for the same period.
Taking its representative work Zhonggeng Value Pilot as an example, at the end of the third quarter, the top ten heavy positions of the fund were: China Hongqiao (01378. HK), Meituan-W (03690. HK), Xiaopeng Auto-W (09868. HK), Shenhuo Shares (000933. SZ), Green Leaf Pharmaceutical (02186. HK), China Overseas Development (00688. HK), COSCO Haineng (01138. HK), Chuanyi Shares (603100. SH), Yuexiu Real Estate (00123. HK), Kwai - W (01024. HK). The total proportion of the top ten heavyweight stocks to the net asset value of the fund is 50.28%.
Produced by Pengpai News reporter based on Wind data
After sorting out its holdings, it was found that as of the end of the third quarter, China Hongqiao remained the largest heavyweight stock, holding 138 million shares, a decrease of 23.3045 million shares compared to the previous quarter; The second largest heavyweight stock, Meituan W, was reduced to 2.0609 million shares in the second quarter, with a market value of 571 million yuan.
Compared with the end of the second quarter, Zhonggeng Value Pilot also reduced its positions in Kwai W, Shenhuo Shares and Yuexiu Real Estate. It is worth noting that Kwai W, formerly the third largest heavy position, had the largest reduction, with the number of shares decreased from 10.9596 million to 5.3247 million shares, a decrease of 51.42%. In addition, Chihong Zinc Germanium (600497. SH) and Changshu Bank (601129. SH) withdrew from the top ten heavyweight stocks reported in the third quarter.
In terms of increasing holdings, two of the top ten heavy holdings of Zhonggeng Value Navigator in the third quarter were newly acquired stocks, namely Xiaopeng Automobile W and Greenleaf Pharmaceutical. When a reporter from Pengpai News reviewed the data of the top ten heavy holdings disclosed by the fund in the past, it was found that Xiaopeng Automobile W appeared for the first time in the top ten heavy holdings of Zhonggeng Value Navigator, holding a total of 8.909 million shares with a market value of 527 million yuan, accounting for 5.30% of the fund's net worth. In addition, Xiaopeng Automobile W also appeared in the top ten heavyweight stocks held by Zhonggeng Value Quality in the third quarter report for one year. Qiu Dongrong's first purchase of Xiaopeng Automobile - W marked his recognition of the company by buying it into the top ten heavy holdings.
Similarly, Green Leaf Pharmaceuticals in the medical sector has also appeared for the first time among the top ten heavyweight stocks of Zhonggeng Value Navigator. Compared to the second quarter, Green Leaf Pharmaceutical has jumped from the 16th largest heavy holdings to the 5th largest heavy holdings, with a significant increase of 195.20% in holdings compared to the previous period, accounting for 5.11% of the fund's net worth.
In addition, China Overseas Development and Chuanyi Holdings have also increased their holdings compared to the second quarter, with positions increasing by 22.74% and 20.15% respectively; Although the shareholding of COSCO Energy has not changed compared to the end of the second quarter, its proportion to the fund's net worth has increased.
As of the end of the third quarter, the net value of the Zhonggeng Value Navigator hybrid fund shares was 2.3312 yuan. In the third quarter of 2023, the net value growth rate of the fund shares was 3.84%, and the benchmark return on performance comparison during the same period was -3.69%.
Many directions are emerging and worthy of research and forward-looking layout
In the third quarter report, Qiu Dongrong pointed out that the overall decline and downturn in the market are significant and long-lasting. The clearance at the stock price level is visible to the naked eye, and valuation represents a high implied return. From an investment perspective, it is a stage where opportunities are widely distributed, especially for some growth stocks with promising prospects whose valuation starting point is close to the level at the end of 2018, and many directions are emerging, which cannot be simply classified as dreams and stories, Worth research and forward-looking layout.
Firstly, from a fundamental perspective, Qiu Dongrong stated that after years of multiple pressures, many companies are still tirelessly striving to polish their core competitiveness, actively focusing on new technologies, new scenarios, new applications, and other aspects. The technologies and products they have nurtured are exploding, such as the emergence of new forces in car manufacturing represented by intelligent driving, the widespread application of new medical methods such as innovative drugs and devices, and the "dream" is no longer unattainable, But at the industry and product level, it is within reach.
Secondly, from an investment perspective, Qiu Dongrong believes that these surviving "new" companies correspond to booming "new" demand, and increased visibility means reduced risk, significantly improved survival rate and growth potential. At the bottom of the market, welcome the new and discard the old, price the "new" and actively take risks, waiting for the mid stream to hit the water and the light boat to cross the mountains, with the hope of embracing the best time.
Finally, from the perspective of valuation and pricing, Qiu Dongrong said that these "new" companies are currently very in line with the requirements of undervalued value investment. The company's risks are constantly decreasing, the business continues to grow even rapidly, and the probability of high growth and high elasticity of profits. The overall market has low expectations and low trading congestion, and the valuation level of the current buying position is relatively low. There is an opportunity to build an investment portfolio with high expected returns.
Therefore, we are more actively allocating high-quality growth stocks, paying more attention to the continuous improvement of the company's fundamentals, high growth and elasticity of profitability, and even buying some 'stories' and' dreams', "said Qiu Dongrong frankly.
When it comes to future investment ideas, Qiu Dongrong mentioned three key investment directions to focus on.
Firstly, technology stocks such as pharmaceuticals and smart electric vehicles, as well as internet stocks, have strong business growth attributes and significant future prospects. There are three reasons why Qiu Dongrong is optimistic: 1. There is a great possibility of innovation in Hong Kong pharmaceutical technology stocks, and the space is huge; 2. The Hong Kong stock market has huge space for smart electric vehicles, and its growth has ushered in an important turning point; 3. Hong Kong internet stocks balance certainty and growth.
The second is supply side contraction or rigidity, but there are still high growth value stocks, mainly in industries such as resource companies and energy transportation companies represented by base metals, as well as real estate and non bank finance in the large cap value stocks.
The third is a cost-effective company with room for demand growth and competitive supply advantages, mainly in industries such as non-ferrous metal processing, pharmaceutical manufacturing, machinery, electrical equipment and new energy, and automotive components. Specifically, there are four main categories: 1. Industries with domestic demand as the main focus have high certainty and huge potential for exploration; 2. Some growth stocks in industries with a focus on growth, such as computers and electronics; 3. A high-end manufacturing niche leader with broad demand space, clear pattern, and leading cost and technological advantages; 4. There is still great potential for niche leading companies with unique competitive advantages in the broad manufacturing industry to explore cost-effective companies.
Qiu Dongrong summarized, "We adhere to the undervalued value investment strategy, by selecting stocks with good fundamentals, positive profit growth, and undervalued values, and constructing an investment portfolio with high expected returns, striving to achieve sustainable excess returns