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Reviewing the first half of 2024, the A-share market rose first and then fell, with the Shanghai Composite Index closing down 0.25%. In the face of sideways and volatile market conditions, how can investors seize structural market opportunities? We have sorted out the latest disclosedRaised fundsThe second quarter report found that in addition to the highDividendsOutside of the sector, emerging industries driven by AI, high-end manufacturing with overseas expansion plans, and industries such as biomedicine with attractive valuations are also attracting attention.

Zhou Weiwen, a veteran of China Europe Fund, said in the quarterly report that the aquaculture and basic chemical industries are overweighted relative to the market, and he is optimistic about some excellent companies in emerging industries that can continue to grow. In the field of artificial intelligence applications, he has added stocks related to robots and intelligent driving. Ge Lan said that based on the investment idea of ​​long-term corporate value, he continued to focus on innovative medicines and equipment and their industrial chains, consumer healthcare, OTC, etc.

Zhou Weiwen:

Optimistic about excellent companies in emerging industries and increase allocation of robots and intelligent driving

Looking back at the second quarter, industry performance was significantly differentiated, with mid-May as the watershed. The market preferred real estate and its related industrial chains in the early stages, while risk appetite gradually declined in the later stages, returning to the high-dividend sector.

China-Europe Times Pioneer managed by Zhou Weiwen basically maintained its portfolio at the beginning of the year in the second quarter, overweighting the aquaculture and basic chemical industries relative to the market. "We are optimistic about excellent companies with long-term value but whose short-term performance trends are frustrated by the prosperity of the industry. We believe that the profits of these companies are expected to improve significantly in 2024 or even 2025. This type of company also includes manufacturing industries with obvious global competitiveness and whose export share can continue to increase. We also increased our allocation in the second quarter." Zhou Weiwen said.

At the same time, he is also optimistic about some excellent companies in emerging industries that can continue to grow. Considering the clarity of the implementation path and market demand, he has increased his holdings in robot and smart driving related stocks in the field of artificial intelligence applications, and reduced his holdings in media where consumer demand is still unclear. In addition, he has also reduced his holdings in the food and beverage sector, where consumer entities are not active and both volume and price are under test.

Wang Jian:

Look for sectors with improved fundamentals and strong performance resilience

For the market in the repair period, Wang Jian, a veteran of China Europe Fund who is good at balanced investment, believes that it is more necessary to combine the valuation position and find investment opportunities with stable growth. "The focus of our current work is to observe the just-concluded second quarter and find sectors with improved fundamentals and strong performance resilience, and find investment opportunities with reasonable valuations from them," she said in the second quarter report of China Europe New Power Hybrid.

Specifically, she expects that companies with better profits will be concentrated in three areas: First, some upstream resource products, where the supply is relatively rigid.PPIIt can still maintain good profitability even under a negative background.

The second category is some subdivided high-end manufacturing industries that have the potential to achieve sustained growth by gaining access to international markets, including construction machinery and power grid equipment.

Third, from the perspective of rigid domestic demand, the pharmaceutical sector, which has a significantly attractive valuation, is also optimistic. From a macro perspective, global liquidity has reached a turning point with the Fed's policy, and the investment and financing data of biotech companies are expected to improve, which is also beneficial to the valuation repair of innovative drug companies. Domestically, the impact of policies is coming to an end, and there are signs of an upward trend in some sub-sectors, such as the continuous realization of the international commercial expansion of innovative drugs. Overall, she believes that the market still has structural opportunities from a bottom-up perspective.

Grant:

Optimistic about investment opportunities in innovative medicines, medical devices and related industry chains

Since the beginning of this year, the biopharmaceutical industry has continued to be under downward pressure, and the valuation level of the sector has further declined. In the second quarter, the Shenwan Pharmaceutical and Biological Index fell by 10.25%, still underperforming the CSI 300 Index.

Facing the market pressure, Ge Lan, manager of China Europe Healthcare Fund, said in the second quarter report that after the industry order is standardized and the test of internal and external macro factors, only high-quality enterprises with core product competitiveness and efficient operation and management capabilities can truly get out of the industry adjustment cycle and usher in sustainable long-term development, which is also the focus of allocation. Based on the investment idea of ​​the long-term value of the enterprise, it continues to focus on innovative medicines and equipment and their industrial chain, consumer medical care, OTC and other aspects.

Looking ahead to the third quarter of 2024, she pointed out in the quarterly report that in the serious medical field, medical compliance is still being promoted at all levels. It is expected that the hospital and enterprise sides have gradually adapted to the new environment of more standardized and orderly, and hospital diagnosis and treatment and enterprise business activities are continuing to improve. Considering that the second half of 2023 is still in the adaptation and adjustment period of industry compliance, the base of enterprise operation is relatively low, and a certain degree of recovery is expected in the second half of 2024.

Ge Lan said that she is still optimistic about investment opportunities in innovative drugs and medical devices and related industry chains. In terms of innovative drugs and medical devices, in addition to the stability of the national medical insurance policy on the payment side, various regions have also successively introduced relevant support policies for industry innovation. In terms of product strength, the data released by domestic companies at the ASCO conference performed well, and some products have become an important part of the partners' global clinical pipeline layout. In terms of external cooperation, with the gradual increase in the number of companies and varieties authorized to foreign countries, domestic companies have more experience in external authorization, and are gradually exploring new and more advantageous ways of cooperation for competitive varieties.

In terms of the innovative drug industry chain, overseas investment and financing continue to pick up, which is expected to drive innovation activities to gradually become active. For innovative service companies that mainly focus on overseas markets, the Biosafety Act is expected to still have some disruptions to their businesses. The domestic investment and financing environment is still in the stage of gradually bottoming out, but we also see that the number of newly signed projects of some companies is still showing a year-on-year growth trend, and the amount of newly signed orders is also expected to gradually improve in the second half of 2024.

Lan Xiaokang:

We are firmly optimistic about the market in the medium and long term. China's stock market has a large room for revaluation.

In the first half of the year, economic growth was steady and progressing. Although the economic recovery was not as strong as expected in the short term, the economic operation has recovered faster. Lan Xiaokang, a value-oriented middle-aged investor of China Europe Fund, remains optimistic. Based on his overall judgment of the macroeconomic and global environment, he is confident in the medium- and long-term performance of the A-share market. He pointed out in the second quarter report of China Europe Rongheng Balance that although there is a certain deviation in the pricing of the Chinese stock market by global capital, we believe that Made in China is a core link in the global industrial chain and is indispensable. Looking at it from a short-term perspective cannot objectively reflect the long-term competitiveness of Chinese assets. After the future value returns, the valuation of the A-share market is expected to rise overall.

Specifically, he focuses on upstream resources, the Belt and Road Initiative, high dividends, stable growth, heavy industry, state-owned enterprises and Hong Kong stocks. Lan Xiaokang is still optimistic about the performance of upstream resource stocks, and the logic has not changed, mainly based on global re-industrialization and the increase in the proportion of lower-income groups. He also continues to be optimistic about the economic growth of the Belt and Road Initiative countries, and the related industries and companies will benefit from this historical process in the long run.

Dividend strategy is also the focus of Lan Xiaokang's allocation, but he said that in the future, he is more optimistic about dividend-bearing industries and stocks that are highly correlated with economic recovery, while we are beginning to be cautious about pure bond-like stocks, and we remind people to guard against potential volatility risks for long-term and ultra-long-term government bonds. As time goes by, we should pay more attention to the effect of stable growth policies.

For traditional heavy chemical industries, Lan Xiaokang suggested paying attention to the impact of energy conservation and carbon reduction on their supply structure. "From our perspective, the demand for this type of industry will remain stable in total. If the supply shrinks in the second half of the year, coupled with the effect of stabilizing growth, it may bring unexpected feedback to investors," he said.

At the same time, Lan Xiaokang once again emphasized the investment opportunities of state-owned enterprises in this round. "Under the historical opportunity, the status of state-owned enterprises will be systematically improved, and the market value incentive mechanism of state-owned enterprises is expected to be gradually established. Investors should not view the future of state-owned enterprises in the same way as in the past," he pointed out.

The last keyword is Hong Kong stocks. He believes that high-dividend assets in Hong Kong stocks may be more attractive, and for stocks with higher discounts, Hong Kong stocks may be given priority. From the perspective of the future liquidity environment, the Hong Kong stock market is also more worth looking forward to.

Funds are risky and investment should be cautious. The above content is for reference only and does not indicate future performance or serve as any investment advice. The views and forecasts contained therein represent only the views at the time and may change in the future. Please do not quote or reprint without permission.