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Cailianshe News, July 18 (Reporter Feng Qijuan)In the second quarter report just released, Zhang Kun bluntly said that he disagreed with the current pessimistic expectations of the market. In his view, the most important underlying factor is the unchanging diligence and wisdom of the Chinese nation, and pessimistic expectations will eventually be falsified. He pointed out that the domestic economy is still a fertile ground. Considering the proportion of household consumption in the economy, the investment opportunities brought about by economic development that bring about the people's living standards are getting better and better, which is still one of the most promising gold mines in the stock market in the long run.

Zhang Kun frankly said that the most important thing at this moment is patience, and the long-term return expectations of high-quality companies are very considerable. At this time, the biggest risk facing long-term investors is that high-quality companies are privatized, and the controlling shareholders are no longer willing to share the future development results of the company with the circulating shareholders. Fortunately, he believes that most of the companies in his holdings do not have high risks in this regard.

As of the end of the second quarter, the total size of the four products managed by Zhang Kun was about 61.681 billion yuan, a 4.71% decrease from 64.731 billion yuan at the end of the first quarter. According to Wind statistics, as of the end of the second quarter, the top three industries with the largest holdings in Zhang Kun's managed products were: manufacturing, leasing and business services, and finance, and the top ten industries with the largest holdings were:China National Offshore Oil Corporation、Tencent Holdings、Wuliangye、Kweichow Moutai、Luzhou Laojiao、Yanghe Shares、Hong Kong Exchanges and Clearing Limited、Meituan-W、Samsonite、Shanxi Fenjiu, holdings accounted for 66.43% of the net value. Among them, there are still 5 liquor stocks.

The second quarter report pointed out that the stock positions of Zhang Kun's four products were basically stable in the second quarter and the structure was adjusted. In terms of individual stocks, Zhang Kun said that he still holds high-quality companies with excellent business models, clear industry structures and strong competitiveness. Specifically, E Fund Asia Select adjusted the structure of industries such as technology and consumption, and the other three products, namely E Fund Quality Select, E Fund Blue Chip Select, and E Fund Quality Enterprise, adjusted the structure of industries such as consumption and medicine in the past three years.

Compared with the end of the previous quarter,China Merchants BankAt the end of the second quarter, it withdrew from the top ten holdings of E Fund Quality Select and E Fund Blue Chip Select, and Prada and Samsonite became the new top ten holdings of these two products respectively; Samsonite also newly entered the ranks of E Fund Quality Enterprise Three-Year Holding Stocks; Shanxi Fenjiu newly entered the top ten holdings of E Fund Quality Select in the second quarter, and at the same time withdrew from the ranks of E Fund Quality Enterprise Three-Year Holding Stocks; in addition, Hong Kong Exchanges and Clearing withdrew from the top ten holdings of E Fund Quality Select and E Fund Asia Select in the second quarter.

According to the second quarter report, Zhang Kun maintained a high equity position in all of his managed products, with equity investment accounting for more than 90%; in terms of position concentration, except for E Fund Asia Select, the top ten holdings of the other three products accounted for more than 70%. In addition, the A-share market fluctuated and fell this quarter, but the Hong Kong market fluctuated and rose. The Hong Kong stock investment of these four products accounted for more than 45% of the net value.

Zhang Kun: I strongly disagree with the market's pessimistic expectations

Zhang Kun pointed out in the second quarter report that in the bond market, treasury bond yields, especially long-term treasury bond yields, continued to decline, with the 30-year treasury bond yield falling below 2.5%; in the stock market, there was a clear differentiation in the second quarter, with industries dominated by bond-like dividend assets such as utilities, banks, and coal performing well, while industries such as media, commerce and retail, and social services lagged behind.

On the one hand, investors in the market are still actively embracing long-term government bonds and bond-like stocks despite the central bank's continuous risk warnings, while on the other hand, they are constantly avoiding industries related to domestic demand. From both perspectives, the consensus expectations of the market are already very pessimistic. Judging from the valuation of government bonds and stocks related to domestic demand, the pessimistic expectations of the market may be based on concerns about stagnation, and Zhang Kun strongly disagrees with this pessimistic expectation.

He stressed that the most important underlying factor is the diligence and wisdom of the Chinese nation, which remain unchanged. Whether it is the economic boom brought about by reform and opening up or the great achievements made by Chinese people overseas, these have been proven time and again in the past few decades. We have no reason to believe that these will suddenly disappear. Considering the current level of economic development, as long as people's subjective initiative continues to be exerted, there is no reason for stagnation.

According to the country's 2035 development goals, my country's per capita GDP in 2035 will reach the level of moderately developed countries, which means that the current per capita GDP level still has a lot of room for improvement. As the level of per capita GDP increases, the most direct effect will be reflected in the continuous improvement of people's living standards. As long as people's living standards get better and better and continue to improve their lives, the team believes that there will be a group of companies that provide high-quality products and services that will continue to grow and create returns. Even if the current profit level is maintained, its dividend yield has already approached or exceeded some traditional dividend stocks. The market is worried that the continued decline in demand will make the company a "value trap", that is, revenue and profits continue to decline.

Zhang Kun said frankly that no matter which industry develops, as long as it drives the continuous growth of per capita GDP, the living standards of the people will continue to improve, and pessimistic expectations will eventually be falsified. In fact, the biggest risk facing long-term investors at this time is that high-quality companies are privatized, and the controlling shareholders are no longer willing to share the future development results of the company with the circulating shareholders. Fortunately, the team believes that most of the companies in the portfolio are not at high risk in this regard.

In Zhang Kun's investment framework, the prerequisites are to meet the elements of a good business model, certain competitive barriers, sufficient free cash flow, and good corporate governance, that is, the business operations of the company must be of high quality. However, under these premises, the team will also give considerable weight to long-term growth. After all, this is a unique advantage and an important source of higher returns for stock investors who are willing to withstand fluctuations. The continuous development of the economy is the soil for the long-term growth of enterprises. In this regard, the domestic economy is still a fertile ground. Zhang Kun believes that considering the proportion of residents' consumption in the economy, the investment opportunities brought about by the improvement of people's living standards due to economic development are still one of the most promising gold mines in the stock market in the long run. Due to pessimistic expectations, the current market has traded some high-quality companies at valuations (price-earnings ratio, market value/free cash flow) levels that can be clearly accounted for by privatization.

Zhang Kun concluded that the most important thing at this moment is patience, and the long-term return expectations of high-quality companies are very considerable.

Hong Kong stocks account for more than 45% of net value

In the second quarter, the A-share market fluctuated and fell, while the Hong Kong market fluctuated and rose. The Hang Seng Index rose by 7.12% and the Hang Seng China Enterprises Index rose by 8.97%. During this period, the Hong Kong stock investment ratio of Zhang Kun's four products accounted for more than 45% of the net value.

As of the end of the second quarter, the top ten holdings of E Fund Quality Select were: Tencent Holdings, Alibaba-SW, Wuliangye, Kweichow Moutai Luzhou Laojiao, Yanghe Shares, CNOOC, Prada, Shanxi Fenjiu, and Huazhu Group-S, with a total holding ratio of 72.41%; compared with the end of the first quarter, Shanxi Fenjiu and Prada became new entrants into the top ten holdings of the product, while China Merchants Bank and Hong Kong Exchanges and Clearing Limited withdrew from the list.

Based on fair value, the assets invested in China and Hong Kong of E Fund Quality Select account for 47.18% and 47.03% respectively.

According to the Global Industry Classification Standard (GICS), the three major industries in which E Fund Quality Select is heavily invested are: consumer staples, consumer discretionary, and telecommunications services.

As of the end of the second quarter, the top ten holdings of E Fund Asia Select were: TSMC, CNOOC, Tencent Holdings, Alibaba-SW, ASML, Prada, Samsonite, Futu Holdings, and Samsung Electronics, with a total shareholding ratio of 69.76%; compared with the end of the first quarter, Samsung Electronics and Futu Holdings became new entrants into the top ten holdings of the product, while Advanced Micro Devices and Hong Kong Exchanges and Clearing Limited withdrew from the list.

The assets of E Fund Asia Select invested in Hong Kong, the United States and South Korea account for 49.20%, 38.2% and 6.92% respectively; in addition, the three major industries of this product are information technology, non-essential consumer goods and telecommunications services.

Compared with the end of the second quarter, the top ten holdings of E Fund Blue Chip Select are: Tencent Holdings, China National Offshore Oil Corporation, Wuliangye, Kweichow Moutai, Luzhou Laojiao, Yanghe Shares, Hong Kong Exchanges and Clearing, Meituan-W, Samsonite, and Shanxi Fenjiu, with a total holding ratio of 73.69%; compared with the end of the first quarter, Samsonite has newly entered the top ten holdings of this product, and China Merchants Bank has withdrawn from the list.

The total market value of E Fund Blue Chip Select's investments in Hong Kong stocks at the end of the period was 18.164 billion yuan, accounting for 46.53% of the net value, with heavy holdings in the three major industries of non-essential consumer goods, telecommunications services, and energy.

Compared with the end of the second quarter, the top ten holdings of E Fund Quality Enterprises in the past three years are: China National Offshore Oil Corporation, Tencent Holdings, Wuliangye, Kweichow Moutai, Luzhou Laojiao, Yanghe Shares, China Merchants Bank, Hong Kong Exchanges and Clearing, Meituan-W, and Samsonite, with a total holding ratio of 78.49%; compared with the end of the first quarter, Samsonite has newly entered the top ten holdings of this product, and Shanxi Fenjiu has withdrawn from the list.

The total market value of E Fund Quality Enterprises' investments in Hong Kong stocks at the end of the three years was 2.085 billion yuan, accounting for 46.71% of the net value. The funds were mainly invested in the three major industries of non-essential consumer goods, energy, and telecommunications services.