Another batch of well-known fund managers' quarterly reports are out!
Recently, the products managed by well-known fund managers such as Ge Lan and Liu Weiwei of China Europe Fund and Zhao Yi of Quanguo Fund have released a quarterly report.
For the market outlook, many fund managers said that after experiencing the adjustment in 2023, the market in the first quarter of 2024 will first decline and then rise. The supply side is experiencing a reshuffle and optimization in the trough period, the long-term core competitiveness of high-quality enterprises has not changed, and some investment directions are still incremental.
Gülen: Pay attention to the opportunities for the medical industry chain to go overseas
Looking back on the market in the first quarter of this year, the pharmaceutical sector is still in the stage of shock adjustment. In the first quarter, the Shenwan Pharmaceutical and Biological Index fell by 12.08%, ranking last in the Shenwan first-class industry index.
From the perspective of industry fundamentals, different sub-sectors are in different profit cycles, but the overall performance is stable and at a low valuation stage. From the perspective of supply and demand pattern, in the environment of overall stabilization of domestic demand, the demand for medical insurance payment and residents' diversified medical and health expenditure still shows a certain rigidity, the supply side is experiencing a reshuffle and optimization in the trough period, and the core competitiveness and moat of high-quality enterprises are also constantly strengthening.
As of the end of the first quarter, the top 10 heavy stocks of the fund were Hengrui Pharmaceutical, Mindray Medical, WuXi AppTec, Aier Ophthalmology, Tong Ren Tang, China Resources Sanjiu, Tigermed, Pien Tze Huang, Pharmaron and Dong'e Ejiao. Among them, Dong'e Ejiao is newly added to the top 10.
Looking forward to the second quarter, Gülen said in the quarterly report that he is still optimistic about the innovation-driven related pharmaceutical industry chain. "As an important part of the new quality productivity, pharmaceutical innovation is also the firmest direction of the company's layout. In 2023, the number of varieties of chemical drugs, biological drugs, and traditional Chinese medicine innovative drugs applying for marketing will continue to increase, and 2024 is expected to usher in the peak period of approval and marketing of related innovative drugs. ”
She also said in the quarterly report that the development of the domestic innovative drug industry chain is facing certain twists and turns. In view of the pain points of each link of the industrial chain, in recent years, the national level has also continued to carry out scientific coordination and precise dredging through policies and measures, and the overall guidance direction of the industrial chain is still real innovation, which is mainly reflected in new targets, new mechanisms, new structures, new technologies and drugs with independent intellectual property rights, as well as effective treatment methods to solve clinical needs. It is foreseeable that the support and guidance of national policies are expected to drive a new round of healthier and more sustainable R&D cycles, which also contain opportunities worthy of layout in advance.
In terms of the medical industry chain going overseas, Gülen said that with the continuous advancement of the internationalization level of the medical device field, some companies have gradually made international breakthroughs in the field of high value chain and occupied overseas market opportunities, mainly focusing on innovative equipment, in vitro diagnostics and other fields. Although the internationalization process of some enterprises will be affected by the phased changes in the global geopolitical situation, the long-term core competitiveness of high-quality assets in the domestic innovation industry chain has not changed.
Liu Weiwei: Optimistic about technology, photovoltaic energy storage, smart cars and innovative drugs
Another well-known fund manager of CEIBS Fund, Liu Weiwei, manages CEIBS Times Win-Win is one of the first floating rate products in the whole market. The fund was launched on November 28, 2023, and significantly increased its equity exposure in the first quarter of this year.
In terms of holdings, as of the end of the first quarter, the top 10 heavy stocks of the fund were Zhongji Innolight, Sungrow, Shanghai Electric Co., Ltd., CATL, Arctech, Xin Yisheng, Muyuan Co., Ltd., Tuopu Group, Shennan Circuit and Transsion Holdings. In the interval, the largest contributors to the portfolio performance were Zhongji Innolight, Shanghai Electric Co., Ltd. and Xin Yisheng, all of which rose by more than 30% in the first quarter.
In the quarterly report, Liu Weiwei mentioned the understanding of new quality productivity, and he believes that new quality productivity is inseparable from scientific and technological innovation. Therefore, at the industrial level, he is optimistic about the four major directions related to innovation: technology, photovoltaic energy storage, smart cars and innovative drugs.
Specifically, he said that in the field of science and technology, technological breakthroughs represented by AI are expected to achieve diffusion from computing infrastructure to application, and hardware terminals such as PCs, mobile phones, and AIoT are expected to innovate, and the technology industry is still leading the trend of the times. Autonomous driving and humanoid robots are the integration of AI technology and advanced manufacturing, and there has been rapid progress at home and abroad, and the strong advantages of China's manufacturing industry will still make us occupy a leading edge in these two fields.
In the field of photovoltaic energy storage, with the rapid decline in the price of photovoltaic modules, batteries and other products, it is expected that the integration of photovoltaic and storage will gradually usher in parity around the world, thereby driving the industry to enter a new round of development stage. In terms of innovative drugs, he believes that weight loss drugs, Alzheimer's disease, ADCs, etc. have gradually begun to enter the commercialization process in the past two years, and the innovation of the pharmaceutical industry is entering a new round of upsurge.
Zhao Yi: The second quarter will be an important observation window
According to the quarterly report of Quanguo Xuyuan managed by Zhao Yi, in the first quarter, the operation of the fund changed slightly, and some concentrations were made in the industry and individual stocks, and a certain structural adjustment was carried out on the portfolio, and some holdings were added to the companies whose fundamentals were the first to come out of the bottom.
As of the end of the first quarter, the top 10 heavy stocks of the fund were CATL, Kodali, Luxshare Precision, Meituan, Tencent Holdings, Enjie, JA Technology, Xinquan, Sanhua Intelligent Control and Yingliu. Among them, Yingliu shares are newly added to the top 10 heavy stocks.
Zhao Yi said that for the new energy industry, the second quarter will be a very important observation window period, and it is necessary to observe whether the increase in demand comes from the use demand triggered by the price drop, or the demand for replenishment (storage). Once it is confirmed that more is due to demand for use, then this round of growth will be longer when combined with the slowdown in capacity expansion and financing restrictions starting in the second half of 2023.
After the market has experienced a correction in 2023, the first quarter of 2024 will first decline and then rise. Structurally, the situation in 2023 continues, with the dividend-oriented coal, banking and petroleum and petrochemical sectors leading the gains, while pharmaceuticals, computers and electronics led the decline, with the Shanghai Composite Index rising 2.23% throughout the quarter, the Shenzhen Component Index falling 1.30%, and the ChiNext Index falling 3.87%.
"We believe that it is relatively difficult for us to determine the bottom of the market, but we have always stressed that we will actively seize opportunities when quality companies come out of a rapid correction and enter a cost-effective phase. Zhao Yi said in the quarterly report. At present, Zhao Yi's portfolio holdings are mainly concentrated in high-end manufacturing industries such as power equipment and new energy, computers, electronics, machinery, and military industry, as well as companies with steady growth and high dividend yields.
Looking forward to the second quarter, Zhao Yi believes that on the one hand, taking new energy as an example, there have been some unexpected changes in the industry after the Spring Festival. "At present, it can be observed that industry demand and capacity utilization continue to grow month-on-month, and even some links have considered price reductions before the Spring Festival and began to raise prices after the holiday. The second quarter will be a very important observation window, and it is necessary to observe whether the increase in demand comes from the increase in demand triggered by the decline in prices, or the demand for replenishment. Once it is confirmed that more is due to demand for use, then this round of growth will be longer when combined with the slowdown in capacity expansion and financing restrictions starting in the second half of 2023. ”
Zhao Yi said that the head company has also withstood a good stress test in this round of price reduction cycle, considering that the stock price of the industrial chain company has been sharply adjusted, and the valuation is at the bottom of history, he is more and more optimistic about the companies in the new energy industry, but he also believes that the differentiation between the follow-up companies will be very obvious, and it is more necessary to select individual stocks. On the other hand, there will also be companies that have entered the performance forecast period, and he will focus on the industries where the performance has turned or accelerated.
On the whole, Zhao Yi said that he will still pay attention to the direction of "increment", one is the direction of demand increase brought about by technological progress, the second is the direction of going out, mainly concentrated in new energy, the third is the direction of domestic substitution and making up for shortcomings, especially the high-end manufacturing industry based on aero engines and domestic computing power, and the fourth is the direction of new demand, such as low-altitude economy and AI applications.
Editor-in-charge: Wang Yunpeng
Proofreader: Yao Yuan