The Zhitong Finance App learned that on March 29, 4 funds managed by Zhang Kun, the ace fund manager of E-Fangda, disclosed their 2023 annual reports. Zhang Kun said in his annual report that as China's economy enters a stage of high-quality growth, while the framework for investing in listed companies remains stable, stricter standards need to be adopted in certain specific areas. The “powerful miracle” and “black chicken becomes phoenix” that often occur in the era of extensive growth will be more difficult to replicate. The operation of enterprises will need to be more refined, and stricter and more detailed standards will need to be used to evaluate investment targets.

Currently, Zhang Kun is managing 4 public funds, namely E-Fangda Blue Chip Select, E-Fangda Premium Select, E-Fangda Premium Enterprise Holdings for 3 years, and E-Fangda Asia Select.

Among them, the largest product is E-Fangda Blue Chip Select. As of the end of the fourth quarter of 2023, the net asset value of the fund was 41,738 billion yuan. Therefore, the fund's shareholding operations are very representative. Since the top ten stocks have already been disclosed in the 2023 quarterly report, the focus of this annual report is on the hidden heavy stocks disclosed in the 2023 report.

Specifically, the fund's 11-20 stealth stocks are Shanxi Fenjiu (600809.SH), Yao Ming Kangde (603259.SH), Yum Sheng China (09987), Li Ning (02331), Giant Biotech (02367), Samsonite (01910), Tiger Pharmaceuticals (03347), L'OCCITANE (00973), Tongrentang Sinopharm (03613), and China Resources Vientiane Life (01209).

It is worth mentioning that of the 10 stocks mentioned above, 6 were newly bid, including Yao Ming Kangde, Samsonite, Tiger Pharmaceuticals, L'OCCITANE, Tongrentang Sinopharm, and China Resources Vientiane Life. The net worth ratios of the fund were 3.99%, 1.02%, 0.55%, 0.28%, 0.27%, and 0.11%, respectively.

Zhang Kun believes that at the level of corporate governance, in an age of extensive growth, growth can solve many problems. However, in an age of high-quality growth, inefficient growth is no longer meaningful. It is expected that management can allocate the company's capital in a more detailed manner, evaluate the difference in opportunity costs between investing in new businesses and helping shareholders increase old businesses. The importance of dividends and repurchases and cancellations has increased significantly. If management's ability is poor, shareholders' capital may be wasted in disguise. As an investor, you need to carefully evaluate management's ability and willingness to give back to shareholders. The capital market is an amplifier. Both positive and negative aspects will be amplified, and the effects of amplification will continue to increase over time.

Second, in terms of company valuation, Zhang Kun believes that in an age of high-quality development, the basic probability that the company will continue to grow rapidly is declining. Unless the company is in a prominent industry trend and has rare competitiveness (yet such star companies are often highly valued), it is not appropriate to overestimate your ability to judge unconsensual continued high growth.

In terms of the business model of the enterprise, Zhang Kun pointed out that in the era of high-quality growth, the “characteristics” of the enterprise that are unique and difficult to quickly imitate are even more important. All the profits and losses of an enterprise come from all decisions in history. Sometimes some of the most important decisions even come from the distant past. Perhaps the management that made the decision did not work for the company long ago, but this decision continues to play an important role. Even in the technology industry, which is changing rapidly in the usual sense, companies are becoming long-lived. Among the top 20 technology companies in the world by market capitalization, the youngest is Meta founded in 2004. The giants that look “old” are still lightweight, and the top two companies by global market capitalization were founded in the 70s.

He added that in an era of significant growth, a new strategic decision by an enterprise may quickly take an enterprise to a major level; in an era where growth is limited, the marginal effect of a new strategic decision will inevitably decline. And when a really significant incremental trend comes, such as AI (artificial intelligence), when all companies do their best, the resources they have will be one of the winners and losers. In this round of AI revolution, tech giants are still leading the way. Their rapid construction of the strongest infrastructure and recruitment of the world's best talents have become important conditions, and niche businesses where they can continue to generate cash flow are prerequisites for all of this. At the same time, it also increases fault tolerance in business operations.