According to the Smart Finance app, on July 18th, Yin Hua Fund released its second quarter report for its funds in 2024. Among them, the top ten heavy stocks managed by the well-known fund manager Jiao Wei, the Yin Hua Wealth Theme Hybrid, were: CNOOC (600938.SH), Midea Group (000333.SZ), China Mobile (600941.SH), Haier Smart Home (600690.SH), China Shenhua Energy (601088.SH), China National Nuclear Power (601985.SH), SDIC Power Holdings (600886.SH), Shanxi Xinghuacun Fen Wine Factory (600809.SH), China Yangtze Power (600900.SH), and Hisense Home Appliance (000921.SZ). Compared with the end of the first quarter, Haier Smart Home and China Yangtze Power are the newly added top ten heavy stocks, while Tsingtao Brewery (600600.SH) and Kweichow Moutai (600519.SH) have dropped out of the top ten heaviest stocks.

Jiao Wei stated that his main strategy in the second quarter and first half of the year was to reduce holdings in high-end consumption and shift to dividend and overseas industries. Enterprises with high-end consumption represented by high-end liquor still have huge advantages in cash flow and user stickiness. However, it is necessary to observe and wait for these enterprises to reach the inflection point of inventory and mature period before they can turn to dividends to provide investment opportunities for investors.

Haier Smart Home and China Yangtze Power are the newly added top ten heavy stocks.

Specifically, as of the end of the second quarter, the stock position of the Yin Hua Wealth Theme Hybrid was 83.78%, a decrease of 10.36 percentage points from the end of the first quarter.

In terms of additions and reductions, the top ten heavy stocks of Yin Hua Wealth Theme Hybrid are: CNOOC, Midea Group, China Mobile, Haier Smart Home, China Shenhua Energy, China National Nuclear Power, SDIC Power Holdings, Shanxi Xinghuacun Fen Wine Factory, China Yangtze Power, and Hisense Home Appliance. Compared with the end of the first quarter, Haier Smart Home and China Yangtze Power are the newly added top ten heavy stocks, while Tsingtao Brewery and Kweichow Moutai have dropped out of the top ten heaviest stocks.

In fact, Jiao Wei's shift of holdings has already begun in the first quarter of this year. The top ten heavy stocks at the end of the first quarter already included dividend-related individual stocks such as CNOOC, China Mobile, China National Nuclear Power, SDIC Power Holdings, and China Shenhua Energy.

In terms of net value, as of the end of the second quarter, the net value of Yin Hua Wealth Theme Hybrid A fund share was 4.3550 yuan, with a net value growth rate of 1.93% for the quarter; the net value of Yin Hua Wealth Theme Hybrid C fund share was 4.3291 yuan, with a net value growth rate of 1.78% for the quarter; the benchmark yield rate for performance comparison was -1.35%.

Jiao Wei pointed out that the main strategy of Yin Hua Wealth Theme Hybrid Fund in the second quarter and the first half of the year was to reduce holdings in high-end consumption and shift to dividend and overseas industries. The main idea is as follows: for the consumption upgrade industry represented by high-end liquor, it has been a representative of high ROE, high gross margin, and high protective moat business models in the past few years. However, it is obvious that these successful business models are facing external and internal challenges at the turning point of a new round of economic transformation. To some extent, the higher the gross margin and pricing power in the past, the easier they are to be impacted and questioned by the new economic model.

Under this backdrop, the adjustment of valuation may take precedence over profitability itself. However, the popular claim that high-end liquor will enter the period of investment trash time is not acknowledged. Obviously, the consumer moat enterprises represented by high-end liquor still have huge advantages in cash flow and user stickiness to refute this argument. It will be observed, and waiting for these enterprises to reach the inflection point of inventory and mature period before turning to dividends to provide investment opportunities for investors. Believe that the unique three-level terrain produces great rivers for the natural gift and compensation of the Chinese nation. These streams, which can brew characteristic Chinese cultural wines and can also be converted into hydroelectric power by water turbines, still monopolize natural resources and take stronger measures to allocate them to out-of-home enterprises represented by home appliances.

In addition, Jiao Wei said that the allocation of dividend model companies has been increased, which are mainly concentrated in energy and public utilities. Their characteristics are low ROE but low PB and PE. From the perspective of understanding, dividend investment is not simply about high or low dividend rate, but about the stability of its business model and the maturity of capital consumption. If the decline in capital investment return rate becomes the dominant factor within a certain period, it may lead to a situation where resource consumption is greater than GDP growth and greater than corporate profits. In this scenario, these low-PB energy and utility companies may experience a systematic increase in valuation.