The first half of this year saw many public funds significantly reduce their holdings in Wanhua Chemical. However, funds managed by Zhong Ou's Zhou Weiwen, while also trimming positions, kept the stock among their top ten heavyweight holdings.
Wanhua Chemical Group Co.,Ltd. is a leading platform-type chemical stock with a strong innovation culture and a deep moat.
From 2022 to 2025, the company's prosperity experienced a multi-year downturn cycle. Net profit dropped from 24.649 billion yuan in 2021 to 12.527 billion yuan in 2025, and earnings per share fell from 7.85 yuan in 2021 to 3.99 yuan in 2025.
However, in the first half of this year, the company's business cycle saw a significant rebound. One major factor was the geopolitical conflict in the Middle East, which drove energy costs higher and put pressure on European chemical production capacity.
At the end of May, Wanhua Chemical Group Co.,Ltd. announced that its Executive Vice President, Hua Weiqi, had purchased 8,000 shares of the company's stock at an average price of 73.52 yuan, based on his positive outlook for the company's future development. Following this purchase, his total holdings increased to 15,000 shares.
On July 7th, the company issued a performance pre-announcement, forecasting that its net profit for the first half of the year would increase by more than 60% year-on-year.
Second-quarter reports show that four funds managed by Zhou Weiwen all hold heavy positions in Wanhua Chemical Group Co.,Ltd. For example, the Zhong Ou New Blue Chip fund has held a significant stake in the stock since the first quarter of 2023, a period spanning three and a half years.
His heavy position in Wanhua Chemical Group Co.,Ltd. is primarily based on the stock's medium-to-long-term value being underestimated, rather than short-term industry cyclical changes.
Zhou Weiwen joined Zhong Ou Fund in 2011 and began managing the Zhong Ou New Blue Chip fund in May of that year. He has now been in that role for over 15 years. Over this 15-year period, his cumulative return has been 636%, with an annualized return of approximately 14%.
It is noteworthy that during Zhou Weiwen's 15-year tenure managing Zhong Ou New Blue Chip, the fund has appointed three additional fund managers: Lin Yingrui, Jin Yuanyuan, and Feng Ludan. Lin and Jin each served for about one and two years, respectively. Feng Ludan, who was appointed as fund manager in October 2021, has held the position for nearly five years.
After earning his master's degree, Feng Ludan joined Zhong Ou Fund in July 2016. He has held roles including research assistant, investment manager, investment advisor representative, and researcher. He is a talent cultivated and developed internally by Zhong Ou Fund.
In September 2023, Zhong Ou Fund launched a starter fund managed by Feng Ludan, the Zhong Ou Digital Economy Fund. It has become a sharp technology-focused fund, with net asset value growing nearly threefold since its inception to around 13 billion yuan.
Starting in the second quarter of 2025, the Zhong Ou New Blue Chip fund began taking heavy positions in optical module companies like Zhongji Innolight and Eoptolink Technology. Zhongji Innolight has replaced Wanhua Chemical Group Co.,Ltd. as the fund's top holding. This rebalancing aligns with the strategy of the Zhong Ou Digital Economy fund, which Feng Ludan manages independently.
Other funds managed by Zhou Weiwen subsequently added Zhongji Innolight and Eoptolink Technology to their top ten heavyweight holdings.
Over the past five years, after appointing Feng Ludan as a co-manager, the Zhong Ou New Blue Chip fund has demonstrated the advantages of a dual-manager structure. Zhou Weiwen's core competency circle has expanded to include technology stocks, successfully capturing the explosive growth opportunities in optical modules and AI chips.
Zhou Weiwen has consistently read and studied the most cutting-edge industry literature in areas like innovative drugs and AI, continuously updating his knowledge framework and broadening his core competency. This has made him a "evergreen" figure in the investment world. Furthermore, over the past decade, he has been willing to mentor and develop new talent, fostering a culture of passing on knowledge.
Within Zhong Ou Fund, Zhou Weiwen is highly regarded by his colleagues in the investment and research system, who appreciate his valuable qualities of both virtue and skill. His success in mentoring outstanding fund managers like Feng Ludan has also become a celebrated story in the investment community.
Zhou Weiwen's portfolio is not highly concentrated, and his sector allocation is relatively balanced, with a focus on risk control.
For example, even though the Zhong Ou New Blue Chip fund has a significant weight in technology stocks like optical modules and AI chips, Zhou Weiwen has not invested solely in the AI supply chain. Instead, he simultaneously holds heavy positions in sectors like chemicals, pharmaceuticals, and insurance.
In his periodic reports, Zhou Weiwen clearly stated, "Because there is inherent uncertainty in predicting the future, we will not invest in just one or two industries."
He also said, "In our investment decisions, our starting point is based on industry trends, medium-to-long-term value being underestimated, or a combination of both. In our portfolio management over the years, the number of stocks that simultaneously exhibit characteristics of being at the low end of an industry trend and having medium-to-long-term value underestimation is usually not high. Opportunities based on industry trends and medium-to-long-term value underestimation each account for roughly half of the remaining portfolio. In a bull market, opportunities for medium-to-long-term value underestimation are relatively scarce, leading to a higher proportion of industry trend investments. In a bear market, there are more opportunities that satisfy both conditions."
Over his nearly 20-year career as a fund manager, Zhou Weiwen has formed a clear investment framework: starting from industry trends or medium-to-long-term value underestimation, he balances allocations in good companies within good industries, avoids betting on a single track, does not chase short-term performance rankings, and seeks to capture the returns from the long-term growth of excellent companies.
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