Innovative Medical, a subsidiary of Orient Fund, issued a liquidation reminder, and the fund manager's stock selection error became the main reason

Text: Wu Ideal

Source: Fortune Unicorn

On May 8, Orient Fund issued a reminder announcement for the company's equity public offering product, Oriental Innovative Medical: as of the end of May 6, 2024, the fund's net asset value has been less than 50 million yuan for 30 consecutive working days. According to the provisions of the Fund Contract, if the number of fund share holders is less than 200 or the net asset value of the fund is less than 50 million yuan for 50 consecutive working days after the Fund Contract comes into effect, the fund contract shall be terminated without the need to convene a general meeting of fund share holders.

Looking at the fund's announcements since last year, the fund has also issued four similar liquidation risk warning announcements since December last year. For this new pharmaceutical-themed fund, which was established on May 8, 2023, it has just been established for just over a year, but at present, the frequent red light response of the scale is very likely to interfere with the operation of the fund manager, can it come back to life?

01

The latest quarterly report of the top 10 heavy stocks is sluggish

Selling the wrong Xingqi eye medicine may become the biggest failure

In recent years, in the field of active equity funds, Orient Fund has often had amazing performance: in the past few years, when the tide of new energy surged, it was Li Rui's Oriental New Energy Vehicle theme that made great progress; In 2023, in the year-end champion competition, Zhou Siyue's eastern regional development will emerge. However, Oriental Innovative Medical, a new pharmaceutical theme fund, may become the shortest board of the barrel.

Check the announcement of the establishment of the product, the announcement scale of the fund when it was established in May last year was about 446 million yuan, and the product has issued three quarterly reports since its inception, which has been greatly reduced to about 53 million yuan in the third quarter of last year, and then dropped to about 51 million yuan at the end of last year, and dropped to about 28 million yuan at the end of the first quarter of 2024, which is approaching step by step from liquidation.

Correspondingly, the net value level of the fund, whether it is A or C, is currently less than the level of nine cents, and the net value performance and scale are cause and effect of each other. It can be inferred from this that fund investors chose to vote with their feet on the product. Looking back at the three quarterly reports disclosed by the fund, Xu Wenbo mainly allocates to leading companies, especially leading companies of innovative drugs, in heavy stocks, which is also completely consistent with the innovative medical theme mentioned in the fund contract.

For example, Hengrui Pharmaceutical, one of the recognized leading innovative drug stocks, has been the number one heavy stock in the portfolio for three consecutive quarters, and although its performance has returned to growth, the stock has risen less than 4% in the secondary market for the year. Looking at the top ten heavy stocks at the end of the first quarter, in addition to Hengrui, the companies that have been able to rise so far this year include Mindray Medical, Akeso Biotechnology and Mabwell-U, but they have risen by less than 10% during the year.

Judging from the situation of these companies, there are not only innovative drug companies in the mainland, but also innovative drug companies listed in Hong Kong, which have either just come out of the torment of the previous epidemic period and returned to the right track of performance climbing, or are still in the painful process of groping for the high investment in R&D and difficult to make profits. After all, the research and development of innovative drugs follows the unwritten law of double ten, and the research and development of a new drug often takes more than 10 years, and its research and development cost may be as high as 1 billion US dollars.

Looking at the poor performance of heavy companies at the end of the first quarter, especially Zhifei Biology, Aier Ophthalmology, and Kangnuoya-B three companies fell greatly, especially the "vaccine Mao" Zhifei Biology is currently retreating about 40% during the year. The author noted that all three of them have entered the ranks of the top ten heavy stocks for three consecutive quarters, but only one is strictly an innovative drug.

Comparing the top ten heavy stocks in the fund's first quarterly report and the fourth quarterly report, the author found that Xu Wenbo has relatively increased the allocation of some "innovative drug Qijun" companies in Hong Kong stocks, even if there are bonus factors for the recent rise in Hong Kong stocks, these companies have risen very little during the year. On the contrary, Xingqi Ophthalmology, which ranked second among heavy stocks in the last quarter, rose by more than 50% during the year due to favorable fundamentals, but unfortunately disappeared from the top ten heavy stocks in the first quarter.

He said in a quarterly report: "During the reporting period, the fund adhered to an investment strategy that combines top-down industry segmentation judgment and bottom-up stock selection. In terms of meso-industry judgment, we should optimize the subdivision directions such as innovation industry chain (policy encouragement and support), equipment renewal, going overseas, state-owned enterprise reform, and in-hospital diagnosis and treatment recovery for key layout and balanced allocation, and avoid subdivided industries in the downward stage of prosperity; In terms of stock selection, we prefer the leading white horse with high certainty of performance growth and the investment target with potential α. ”

02

Orient Fund may lack specialized talents

Xu Wenbo's non-medical graduation is now a "short board"

From the above analysis, it can be roughly seen that whether it is last year's diet pills, smart medical treatment, or the recent hype of traditional Chinese medicine and synthetic biology, the fund may not have captured it; Even if it is an innovative drug that is closely related to the theme, the fund manager has not been able to deploy the truly flexible varieties.

The deep-seated reason for this phenomenon is likely to be the limited understanding of the pharmaceutical industry by fund managers. Unlike most pharmaceutical fund managers who are medical majors, Xu Wenbo, who is currently in a "high position" in the Orient Fund, has a master's degree in business administration from Jilin University. Before managing the Oriental Medicine Theme Fund, judging from the long list of products he managed in the past, he did not manage any pharmaceutical-themed public offerings during the Debang Fund or the Oriental Fund.

At the same time, this veteran of public offering for more than 8 years is currently the assistant to the general manager, the director of equity investment, the general manager of the quantitative investment department, the general manager of the fixed income research department, and a member of the investment decision-making committee of Orient Fund. With so many administrative positions and 5 funds under management, it may be difficult for Xu Wenbo to have time to learn medical knowledge.

In addition, compared with the Oriental Selection, which he has managed for the longest time, and only looks at the list of the top ten heavy stocks in the quarterly report, Xu Wenbo did not have a heavy position in any company in the pharmaceutical industry chain, but on the contrary, he successfully laid out Zijin Mining, Aluminum Corporation of China, CNOOC and other popular resource companies in the year.

Except for Xu Wenbo, the author checked the resumes of all the company's active equity fund managers, and there is indeed no fund manager with a medical background in the current Zhongzhong. However, Wang Fangling, who has been in office for less than two and a half years, reflects a certain preference for medicine, for example, in the heavy stocks of the first quarterly report of the Oriental New Strategy that she currently manages alone, Jichuan Pharmaceutical and Taiji Group occupy the top two, while Dirui Medical and China Resources Shuanghe also entered the top six.

If you look at the heavy stocks at the end of last year, she also had heavy positions in Kunming Pharmaceutical Group, Xinhua Medical, Sirnaomics and Fuyuan Pharmaceutical; For such a fund manager who "loves" pharmaceutical stocks, why can't she be given the opportunity to manage pharmaceutical-themed products?