The Zhitong Finance App learned that on April 19, Li Xiaoxing, the star fund manager of Yinhua Fund, unveiled all quarterly reports on managed fund products. As of the end of the first quarter of 2024, Li Xiaoxing managed a total of 27.628 billion yuan in fund assets. The best performer this quarter was Yinhua Xinyi Flexible Allocation Hybrid A, with a net fund share growth rate of -5.51%.

Compared with the previous quarter, Yinhua Xinyi added Zhongtong Express (02057), Oriental Wealth (300059.SZ), Salt Lake (000792.SZ), and China Mining Resources (002738.SZ); of these, Huichuan Technology (300124.SZ) held 4.09%, making it the fund's largest heavy stock; Yili (600887.SH), Jiang Feng Electronics (300666.SZ), and SMIC (688981.SH) withdrew from the top ten heavy stocks. The specific position situation is as follows:

Li Xiaoxing pointed out in the fund's quarterly report that overall, after a period of adjustment, the relevant risks in the secondary market have been fully released, and the vast majority of targets have reached the bottom of valuation. Along with the gradual upward trend in the macroeconomy, it is not pessimistic about the general market.

By industry, Li Xiaoxing believes that the consumer industry will still face pressure from insufficient demand and increased competition. Accelerated differentiation of enterprises will be the norm, but compared to last year, due to the market's low enough macroeconomic expectations, after three years of valuation adjustments, the consumer industry is basically ranked below 20% in history, and the “high quality” factor will gradually play a role in 24-year consumption. The 24-year consumer market will show “low expectations and strong resilience”. Currently, leading Hakuba has a strong advantage in terms of cost performance in the global market. Due to stable performance growth and high dividend rates, leading consumer companies have limited downward space, and there is a certain degree of upward valuation flexibility. In terms of investment, we continue to be optimistic about high-end liquor with high barriers, a stable pattern, and good cash flow, regional liquor leaders, white electric faucet, and casual snacks and cosmetics that still have outstanding growth.

Due to short-term industry reasons and the high performance base for the first half of last year, the sector's performance in the next 1-2 quarters will not be very impressive, and there is some pressure on fundamentals. However, considering that the stock price has reflected most of the downside, Li Xiaoxing will also pay close attention to the possibility of improving the fundamentals of this sector and corresponding investment opportunities.

Strategic emerging industries are the key to speeding up the development of new quality productivity. Li Xiaoxing is optimistic about fields such as semiconductors and national defense technology that stand on their own feet with a high level of technology. Global semiconductors ushered in a recovery in demand, marked by rising storage prices. Apart from major increases brought about by AI, all other downstream industries showed moderate recovery characteristics. The consumer sector took the lead in entering the inventory replenishment cycle, and industrial and automotive demand bottomed out. Continue to be optimistic about the direction of localization. Domestic substitutions are entering the deep-water zone. In the context of a new round of production expansion in leading domestic fabs, we are optimistic about investment opportunities in equipment, materials, and components driven by breakthroughs in advanced manufacturing processes, and pay phased attention to domestic computing power chips.

The unit profit for domestic lithium battery materials is running at the bottom. Although the entire industry is absorbing the rapidly expanding production capacity over the past few years, the demand side at home and abroad is likely to exceed expectations this year. More and more good brands and models are appearing, and the penetration rate of domestic new energy vehicles continues to rise. Although overseas has had twists and turns in the electrification rate, Chinese companies are still trying hard to go global, and the global production capacity layout is gradually improving. Domestic PV module prices have basically bottomed out, and potential demand is growing rapidly. Although the overall situation is facing the same decline in growth rate and oversupply as new energy vehicles, some auxiliary materials have already emerged from the deteriorating supply and demand pattern ahead of schedule. The growth rate of the wind power industry, especially offshore wind power, is still impressive. The unit profit for wind power machines and components is at the bottom. There is room for upward recovery in the future, and stock prices are also relatively low. The domestic automobile industry is an important driver of economic growth this year. There is a possibility that the profits of automakers and parts companies will improve. Segments such as humanoid robots and the low-altitude economy are on the rise, and the potential for future growth is huge, and they are all relatively promising directions.

Defense and military tools have strong planning. Stock prices in the sector have undergone thorough adjustments, and valuations are at the bottom of history. Industry demand is expected to reverse within the year, and the gradual restoration of orders will drive the performance side of individual stocks in the industrial chain to recover. Li Xiaoxing is optimistic about the reversal of the difficult situation in aviation development and missile chains, as well as the acceleration direction of new quality segments in new areas such as informatization, satellite internet, and intelligent equipment, and is concerned about the reform of state-owned enterprises.

Generative AI has been the biggest technology hotspot in the past year. Li Xiaoxing is optimistic about the development prospects of the AI industry wave in the medium to long term. Compared with last year's grand narrative of going from 0 to 1 in terms of investment, we need to see more of the industry and performance this year. The computing power side has the earliest performance delivery cycle. Overseas computing power expectations are relatively full. Domestic computing power has benefited from localization with policy support, from being usable to being easy to use. In the long run, as the cost of computing power gradually decreases, more and more large models are open source, and the application side is an important focus for subsequent industries. Objectively speaking, AI investment is topical at this stage, and it is necessary to select individual stocks that can achieve sustainable performance.

The performance of major Internet companies continues to be realized, and valuations are at the bottom of history. Stock prices have also bottomed out after experiencing drastic cuts in foreign investment positions. Since the development of the Internet industry, user dividends have come to an end, but there is still plenty of room for payment penetration rate and ARPU value. Looking at the development of AI technology over the long term, it is expected to drive the payment penetration rate and ARPU value increase. Li Xiaoxing is optimistic about investment opportunities in underrated and well-qualified Internet companies.

Banks' revenue and performance will be under pressure in the short term, but future declines in deposit interest rates will ease the pressure on bank interest spreads. The peak of bad real estate generation has passed, and banks have begun to reserve more provisions and have stronger control over performance. Some banks have increased their dividend rates at the time of their annual reports, and the dividend rate has also increased to a certain extent, which is in line with the preference for low long-term capital fluctuations and high dividends. The growth rate of brokers' performance in a single quarter is under pressure, and Li Xiaoxing is more optimistic about undervalued brokerage portfolios with potential for consolidation. Insurance premiums grew rapidly in the first quarter, and it is expected to gradually decline in the future. Mainstream insurers all lowered their actuarial assumptions in their annual reports, which had a one-time impact on valuations. As for real estate, although current sales are still in the adjustment channel, the year-on-year pressure on future sales is gradually decreasing as the base figure declines. Real estate policies in various cities have been drastically relaxed due to city policies, and large real estate companies with central state-owned enterprise backgrounds are even more optimistic.

After coal prices experienced two rounds of off-season stress tests in late winter and late summer last year, profit stability was increasingly recognized by the market. As a result, valuations were freed from the constraints of high earnings and undervaluation of cyclical stocks, compounded by the shortage of allocated assets caused by the continuous decline and flattening of the bond market yield curve. High-dividend-style assets continued to strengthen, and the coal sector continued to strengthen in January and February under strong fundamental support and policy support. Li Xiaoxing judged that the inflow of allocation-type capital will still exist, but believes that the subsequent flexibility and cost performance ratio after a short-term surge is average.

Non-ferrous metals benefit from the financial and commodity attributes of the close interest rate cut by the Federal Reserve. Among them, the gold sector has strong financial attributes. The credit logic of the US dollar has been superimposed in this round, and there is an uncertain risk. Since the beginning of last year, the global economy has moved from recession trading to soft landing/non-landing transactions, and recently to re-inflation trading. Industrial metals such as copper, aluminum, and tungsten, as well as crude oil and petrochemicals, have smoother logic, and are more cost-effective. Ferrous metals are mainly commercial properties. It is necessary to observe the rhythm problems in the handover process between the central government and local authorities in this year's debt conversion process. Overall, their value is underestimated, and there are opportunities for future restoration.

In addition, Li Xiaoxing's cumulative employment return during her tenure as the manager of Yinhua Small and Medium Cap Select Hybrid Fund was 90.45%, with an average annualized return of 7.6%. Heavy stock positions were adjusted 114 times during the period, of which the number of profits was 73, with a win rate of 64.04%; the doubling level of earnings was 5 times, with a doubling ratio of 4.39%. Looking at the latest holdings, Beifang Huachuang (002371.SZ) is the most heavily held stock of the fund, accounting for 6.96%; the remaining ten largest stocks are Xinyuan (688037.SH), Ziguang Guowei (002049.SZ), Jingyi Equipment (688652.SH), Jinshan Office (688111.SH), Lixun Precision (002475.SZ), Focus Media (002027.SZ), 712 (), FELIHUA (300395.SZ), Hikvision (300395.SZ), and Hikvision (603712.SH 002415.SZ).