Zhitong Finance learned from the Zhonggeng Fund APP that on July 19th, Zhonggeng Fund disclosed the second quarterly report of the well-known fund manager Qiu Dongrong. In terms of scale, except for the Zhonggeng Hong Kong stock market value 18-month closed-end, the scale of the other 4 managed funds managed by Qiu Dongrong has all shrunk to varying degrees. According to data, as of the end of the second quarter, Qiu Dongrong's total managed fund size was 14.708 billion yuan, a decrease of 5.146 billion yuan compared to the end of the first quarter of 19.854 billion yuan.

Specifically, as of the end of the second quarter, the latest scale of the largest Zhonggeng Value Navigator was 4.984 billion yuan, a decrease from 6.899 billion yuan at the end of the first quarter. Zhonggeng Value Navigation's second-quarter net value increased by 5.37%, but the net redemption share was as high as 11.17.

Compared to the first quarter, Zhonggeng Value Navigation's stock holdings from 92.5% decreased to 84.77%. It substantially reduced holdings of Secote Precision Electronic (603283.SH), China Overseas Development (00688), Chongqing Chuanyi Automation (603100.SH), and slightly reduced holdings of Yuexiu Property (00123). In addition, Jiangsu Lihua Animal Husbandry (300761.SZ), Hubei Xuanhua (000422.SZ), and China Express Airlines (002928.SZ) entered the top ten holdings. Hubei Yihua Chemical Industry and China Express Airlines are new top ten holdings bought in the first half of this year, but their stock prices in the second quarter had negative growth. As of the end of the second quarter, Zhonggeng Value Navigation's shareholding concentration increased from 51.67% to 56.18%. In terms of regional allocation, a small amount of Hong Kong stocks were reduced, and A-shares were increased.

The stock position of Zhonggeng Small Cap Value has hardly changed, still maintaining a high position of 91.77%. Stocks with heavier positions were mainly sold off, including Secote Precision Electric, Chongqing Chuanyi Automation, Jiangsu Changshu Automotive Group Trim (603035.SH), Poly Developments and Holdings Group (600048.SH), Huagong Tech (000988.SZ), Jiangsu Lihua Animal Husbandry (300761.SZ), while holdings of Zhu Hai Hua Fa Properties (000536.SZ), Hang Yu Technology (600132.SH), Ding Sheng New Materials (603876.SH), and Jiangsu Zhenjiang New Energy Equipment Group (300802.SZ) became new top ten holdings. It is worth noting that the shareholding concentration of Zhonggeng Small Cap Value increased significantly to 64.99% in the second quarter.

Looking at Zhonggeng Value-Innovation, the stock position of the product increased from 89.61% at the end of the first quarter to 93.96%, with a substantial increase in holdings of Zhu Hai Hua Fa Properties and Changchun High-tech Industrial (000661.SZ), and a reduction of more than 27% in holdings of Bank of Ningbo and Autobio Diagnostics. Six new top ten holdings include Jiangsu Lihua Animal Husbandry, Western Mining (601168.SH), Muyuan Foods (002714.SZ), Ninestar Corporation (002180.SZ), Jinduicheng Molybdenum (601958.SH), and Hubei Yihua Chemical Industry.

From the perspective of regional allocation, Zhonggeng Value-Quality slightly reduced the proportion of Hong Kong stocks and increased the share of A-share market. Its transactions reduced China Overseas Development by more than 28%, reducing holdings of Secote Precision Electronic and Chongqing Chuanyi Automation; holdings of Luye Pharma were slightly increased. Zeros Run Auto (09863), Jiangsu Lihua Animal Husbandry, Kuaishou (01024), China Overseas Ovs G Oceans (00081), and Hubei Yihua became new top ten holdings. The shareholding concentration of Zhonggeng Value-Quality increased from 49.45% to 55.45% in one year.

The stock position of Zhonggeng Hong Kong Stock Connect Value decreased from close to full position of 99.47% at the end of the first quarter to 95.94% at the end of the second quarter. From the perspective of portfolio adjustment, the holding of Lingpao Motors and Kuaishou were significantly increased, while the holding of China Overseas Grand Ocean was reduced. Zhuhai Huafa Properties, Yuexiu Property, and EB Environment (00257) are among the top 10 heavy-weighted stocks newly added. From the perspective of regional allocation, Qiu Dongrong reduced the allocation of Hong Kong stocks, and the holdings in the A-share market increased from 0.21% at the end of the first quarter to 9.9%. The main increase is in Zhuhai Huafa Properties, which is also the only A-share company among the top 10 heavy-weighted stocks in Zhonggeng Hong Kong Stock Connect Value fund, accounting for 6.01% of the net asset value.

In the latest quarterly report, Qiu Dongrong once again mentioned: "Hong Kong stocks still have high cost-effectiveness, and some companies with scarcity are the most dynamic and innovative assets in the Chinese economy, and should actively allocate equity assets."

Regarding the current market trend of high dividend stocks, Qiu Dongrong expressed his view on the risks: "We do not exclude the underlying logic of the market valuing shareholder returns for listed companies, but the high dividend strategy is continuously strengthened and traded linearly in the trend, and the cost-effectiveness of benchmark companies continues to decline."

Qiu Dongrong also mentioned three major areas of focus: first, technology stocks such as pharmaceuticals, internet stocks, and smart electric vehicles with strong business growth attributes and large future space; second, value stocks with high growth or profit elasticity in Hong Kong stocks, including real estate, resource companies represented by basic metals and precious metals, electrical utilities and public utilities; third, major industries with space for demand growth, supply-side clearance or imminent clearance, and competitive cost-effectiveness, including agriculture, forestry, animal husbandry and fishery, electric power equipment and new energy, basic chemicals.

It is worth noting that in late April, rumors about "well-known fund manager Qiu Dongrong leaving his job" were circulating in the market. Many investors were worried that if the news were true, it would bring significant redemption risks to the products. On May 11, Zhonggeng Fund announced that Qiu Dongrong's sub-funds had hired additional fund managers. Specifically, Wu Chenggen was hired as a fund manager for Zhonggeng Value Quality Increment, and Liu Sheng was hired as a fund manager for Zhonggeng Value Navigation Increment, while Wu Chenggen had already been hired for Zhonggeng Value Dynamic increment in 2020. Currently, only Qiu Dongrong independently manages CNI Small Cap Value and Zhonggeng Hong Kong Stock Connect Value.