In the third quarter report of 2024, after the A-share market "recovered" on September 24, it is the first collective "review" of public offering products.

Public fund managers will present a complete picture from their perspectives to portfolios, from the industry to individual stocks.

One of the star fund managers from E Fund, Zhang Kun, also released his latest quarterly report on October 25.

Indeed, his views on the market, opportunities, and hot industries differ from many investors (including fund managers from other companies).

Outperforming the performance benchmark

In the third quarter, Zhang Kun's managed funds (except for E Fund Asia Select Fund) generally significantly outperformed the performance benchmark.

Taking his flagship fund, "E Fund Blue Chip Selection," as an example, the net asset value growth rate of the fund during the reporting period was 15.11%, while the performance benchmark return rate was 11.97%, outperforming by 3.14 percentage points.

Driven by strong business performance, Zhang Kun's entrusted scale has once again approached 70 billion, reaching the 69 billion yuan mark.

Although the 4 funds managed by him are in a state of net redemption, Zhang Kun's performance increase has "hedged" the shrinking of shares.

The new policies are expected to stabilize the economy.

In previous quarterly reports, Zhang Kun emphasized more on undervaluation. This quarter, he is clearly more optimistic.

In the quarterly report, Zhang Kun believes that a series of policies issued at the end of September are expected to stabilize the economy and break the market's persistent pessimistic expectations for the economy, as well as break the continuous downward revision of profit expectations for enterprises.

Specifically, in terms of policy, Zhang Kun pays particular attention to macroeconomic policies and real estate policies.

Regarding the overall quantity, he believes that an important meeting in September proposed: facing difficulties, strengthening confidence, effectively enhancing the sense of responsibility and urgency in economic work. Seize the key points, take proactive actions, effectively implement existing policies, and intensively introduce new policies. In terms of monetary policy, it is worth noting to reduce the reserve requirement ratio and implement a powerful interest rate cut.

Regarding real estate, he mentioned the historical data of the year-on-year decrease in sales area of ​​new commercial housing in China by 18.0% from January to August this year, the year-on-year decrease in sales of new commercial housing by 23.6%, and the year-on-year decrease in national real estate development investment by 10.2%.

Also mentioned are a series of policies related to promoting the stabilization of the real estate market, such as strictly controlling the increment of commodity housing construction and optimizing the existing stock. The emphasis on language is quite significant.

Change your perspective to look at the leading company.

Zhang Kun also mentioned: Traditionally, investors mostly use 'growth mindset' and 'marginal changes' to view the leading companies in the technology or consumer industry. Once there is a slowdown or decline in profit growth, anxiety and panic emotions are reflexively generated.

In fact, considering that these companies usually have a valuation premium in the past, namely excess growth expectations, this reaction has some rationality.

At the same time, when looking at dividend-paying companies, investors mostly use 'value thinking' and 'absolute value' to consider these companies, taking into account the past valuation discount, and people generally can accept cyclical profit fluctuations.

However, after experiencing more than three years of reverse stock price changes, Zhang Kun found that the dividend yield levels of some consumer leaders are already at the forefront of the overall market, exceeding a considerable number of components of the SSE Dividend Index companies.

In this situation, investors will have more comparative dimensions when analyzing these companies, comparing the ability to generate free cash flow, the asset-liability situation, and the management team's willingness to distribute dividends with the components of the SSE Dividend Index. In these dimensions, he believes that these consumer leaders may even surpass many dividend-paying companies.

The shareholder return on investment is still considerable.

Zhang Kun also mentioned that, when considering shareholder returns - repurchases and dividends, the current levels of shareholder returns for some leading technology and consumer companies are very high, both in absolute and relative terms.

He is also very pleased to see that the corporate governance level is continuously improving, and the determination to continuously return value to shareholders is becoming stronger.

If the stock price remains stable in the future, he believes that it may even be possible to see some leading companies halve their total shares 8 to 10 years later, meaning that long-term shareholders could double their shareholding without spending extra money.

Although the stock price has risen at the end of the quarter, the shareholder return rate is still near historical highs. Considering the low 30-year national bond yield, the difference between the two is undoubtedly also at a high level.

"Mr. Market" offers an extremely low price

Zhang Kun believes that a series of policies introduced at the end of September are expected to stabilize the economy, break the market's continued pessimistic expectations for the economy, and also break the expectations of continuous profit downgrades for companies.

Regarding long-term development prospects, it has been discussed multiple times in previous regular reports, so it will not be reiterated.

In summary, as long as one believes that the living standards of the ordinary people will be better in 10 years, leading technology and consumer companies will emerge from the current phase of growth dilemma and re-enter a growth phase. In the current environment, Mr. Market has offered rare prices, allowing investors to buy stakes in excellent companies at low prices.

Hold a heavy position in Alibaba in the third quarter.

Although baijiu stocks have risen, the fund managed by Zhang Kun has also risen, it doesn't sound like anything special.

But from the holdings perspective, he is not solely relying on baijiu.

In the third quarter, the four funds he manages maintained a stable stock position and adjusted the structure. In the E Fund Select, E Fund Blue Chip Select, and E Fund High-quality Enterprise Three-year Holding Period Funds, he optimized the holdings in industries such as technology and consumer; in the E Fund Asia Select Fund, he optimized the layout in industries like technology and finance.

Although the proportion of Hong Kong stocks in the E Fund Blue Chip Select Fund and the E Fund High-quality Enterprise Three-year Holding Period Fund has relatively decreased, this should be the result of structural adjustments, as he has not decreased attention. Because looking at the heavy positions, the significant changes come from Hong Kong stocks.

Taking the E Fund Blue Chip Select Fund as an example, Alibaba-W and Yum China have entered the top ten heavy positions, while Hong Kong Exchanges and Samsonite have exited.

In contrast, looking at the interim report of this fund, Yum China was previously ranked 12th in the interim holding list, Zhang Kun did not increase positions in the third quarter, solely entered due to the rise.

Alibaba-W really became one of Zhang Kun's heavy positions in the third quarter of this year, with no shares in the interim report before. Moreover, it quickly became the second largest heavy position.

In addition, Shanxi Xinghuacun Fen Wine Factory also significantly increased its shareholding.

Increasing positions in South Korean stocks amidst the decline.

Data shows that E Fund Asia Select Fund further increased its holding level in South Korean stocks.

Looking at the top holdings, SK Hynix Inc, a South Korean company specializing in semiconductor memory, replaced ASML Holding and became one of the top ten holdings of E Fund Asia Select Fund.

SK Hynix Inc is a South Korean company mainly engaged in the production and sale of semiconductor memory.

This stock, previously ranked 16th in the mid-year report, became one of the top ten holdings after significant increase in positions.

Similarly, previously heavily weighted Samsung also "buying more as it falls" in the third quarter.

This may be one of the reasons why E Fund Asia Select Fund is the only fund under management that lags behind the benchmark.