In 2026, a textbook case of industrial capital flight unfolded in the Hong Kong stock market. The two companies under the KINGBOARD HLDG (00148) group, KB LAMINATES (01888) and KINGBOARD HLDG itself, saw their share prices rapidly surge on the AI-driven market wave. Notably, KB LAMINATES shares had risen approximately nine-fold from the start of 2026 to their peak in June.
Just as the stock prices reached their zenith, the major shareholders of the Kingboard group began a concentrated period of selling shares for cash. On June 17, a second round of share placement saw KINGBOARD HLDG sell 155 million shares at HK$76 per share, netting HK$117.8 billion. In late June, the principal shareholders of KINGBOARD HLDG followed up with successive reductions, selling a total of more than HK$10 billion. Including share sales by company directors, senior management, and supervisors, it is conservatively estimated that shareholders of the Kingboard group have cashed out over HK$20 billion since the beginning of 2026.
Who was buying all these shares on the other side? It was the mutual funds. At the end of the first quarter, all mutual funds in the market collectively held only about 16.27 million shares of KB LAMINATES. By the end of the second quarter, this figure had surged to 178.6 million shares, representing a net purchase of over 162 million shares. This number aligns almost perfectly with the 155 million shares placed by the major shareholders.
Guo Weiling's 3.9 Billion Yuan Bet on Kingboard Group May Have Lost 2.7 Billion Yuan
Among the multitude of funds that stepped in, the Penghua Gangmei Internet LOF was the first to spark discussion. Despite having "Internet" in its name, this fund had allocated 19.32% of its assets to a company making circuit board materials by the end of the second quarter. Specifically, KB LAMINATES accounted for 10.40% of the fund's net value, and KINGBOARD HLDG accounted for 8.92%. These two companies are a parent and subsidiary, with closely linked operations and share prices that move in tandem, yet their connection to the "Internet" concept is quite tenuous.
This situation is not just about a bad investment after a peak—it also raises a sharp compliance issue. The Penghua Gangmei Internet LOF placed 19.32% of its portfolio in two companies controlled by the same owner. Does this constitute a "split holdings" strategy to circumvent the rule that "a single stock's position cannot exceed 10%"? However, the biggest buyer of the Kingboard group was not the Penghua fund. The total value of Kingboard group stocks held by the Penghua Gangmei Internet LOF was only 453 million yuan, representing 19.32% of its own net value. The true "big-money master" was Dacheng Fund.
Guo Weiling, the rising tech star at Dacheng Fund, manages the funds that are the largest buyer of the Kingboard group. By the end of the second quarter, her fund held 2.089 billion yuan in KB LAMINATES (8.36% of net value), effectively "swallowing" one-fifth of the June placement amount. Also, by the end of Q2, the Dacheng Tech Innovation Fund held 2.089 billion yuan in KB LAMINATES (8.36% of net value) and 1.625 billion yuan in KINGBOARD HLDG (6.51% of net value). The Kingboard group holdings totaled 14.87% of the fund's net value, representing 3.714 billion yuan in purchases. Besides Dacheng Tech Innovation, two other funds managed by Guo Weiling—Dacheng Jingxian Chengzhang and Dacheng Lingxian Dongli—also bought shares, cumulatively holding 2.2 billion yuan in KB LAMINATES and 1.714 billion yuan in KINGBOARD HLDG. This is the market value of Kingboard group stocks held by Guo Weiling's funds as of the end of the second quarter (June 30), totaling 3.914 billion yuan invested in these two companies.
Starting in late June, the two Kingboard group stocks began to collapse, falling over 70% in one month. If this investment has not been sold off, the losses could amount to 27 billion yuan. As the Kingboard group's shareholders made their grand exit cashing out, the fund's own investors may have been left to foot the bill.
Tech Star Guo Weiling's AUM Surges by 20 Billion Yuan in Q2
Xu Yan, Liu Xu, and Han Chuang, known as Dacheng Fund's "Three Musketeers," have traditionally been representatives of value investing and were previously criticized for "missing" the tech stock rally. In January of this year, Wang Shuai, the former head of the tech team at Dacheng Fund, left. Following this, Guo Weiling began to emerge. Joining Dacheng Fund in 2015, Guo Weiling rose from a research analyst to become a core fund manager in the tech sector, delivering strong performance during the recent two-year tech rally. Her Dacheng Tech Innovation Fund surged nearly 80% in the third quarter of 2025, achieving a 17% annual return; in the first quarter of this year, it rose 7.82%, and in the second quarter, the fund's net value doubled with a 112.89% gain. Attracted by the stellar performance, investors piled in. The Dacheng Tech Innovation Fund had a scale of only 1.7 billion yuan at the end of 2025, which grew to 4 billion yuan by the end of Q1. In Q2, its scale surged by over 20 billion yuan, with the combined A and C share classes approaching 25 billion yuan. By the end of Q2, the total assets under management for Guo Weiling had rapidly swelled to nearly 30 billion yuan, making her Dacheng Fund's most prominent "tech name." During the same period, Han Chuang, the cyclical investment master among the "Three Musketeers" at Dacheng Fund, was experiencing a downturn. After "buying high and selling low" in the gold sector, his AUM halved from 20.8 billion yuan to 10.9 billion yuan, and rumors of his departure emerged this month.
Self-Reflection and Compliance Risks in the Kingboard Group Investment
KB LAMINATES is the world's leading manufacturer of copper-clad laminates, and KINGBOARD HLDG is its controlling parent company, holding over 60% of its shares. As industrial capitalists, the major shareholders of the Kingboard group are best positioned to understand the cyclical nature of the industry. They heavily reduced their holdings when the stock price was high, and then mutual funds came in to buy the shares. Guo Weiling's investment in the Kingboard group was not a blind chase of a hot trend. The core logic behind it was likely the "price increase" story at the upstream of AI computing power. In her Q2 report, Guo Weiling explained her rationale: investments in rising-price items like electronic yarn, CCL, and memory chips had previously yielded good returns, so she allocated to the leading companies in the industry chain. Based on the "bottleneck links and technological changes in AI computing power" (a view from the Q1 report), she judged that the prosperity cycle upstream for computing power would continue and that high earnings growth would support the current stock prices. She may have seen the Kingboard group as part of a "structural adjustment" within the AI computing power theme, a position based on the "PCB upstream" price increase cycle, rather than a blind deviation from her investment framework.
The problem lies in the sheer size of the bet. A 14.87% portfolio weight, amounting to nearly 4 billion yuan, was concentrated in just two stocks under the same corporate group. These two companies are highly correlated—the parent company owns over 60% of the subsidiary, and their share prices move in unison. The market capitalization of KINGBOARD HLDG is even lower than the market value of its stake in KB LAMINATES. It is a "one rises, one rises; one falls, one falls" situation. As Guo Weiling's AUM skyrocketed from a few billion to nearly 30 billion yuan, the difficulty of adjusting positions increased, and liquidity risk grew. Stocks of this cyclical, price-sensitive nature become extremely fragile after a rapid price surge. Guo Weiling acknowledged this in her Q2 report, but it was already too late.
Whether it is the Penghua Gangmei Internet LOF or the three funds under Dacheng Fund's Guo Weiling, both scenarios expose a sharper compliance issue. When holdings are split between a parent company and its subsidiary within the same system, does it constitute a breach of the "no single security exceeding 10% of net asset value" rule? For the Dacheng Tech Innovation Fund, KB LAMINATES accounted for 8.36% of net value and KINGBOARD HLDG for 6.51%. Individually, neither exceeded 10%. The problem is that these two entities are a parent and subsidiary with the same beneficial owner, core management team, consolidated financial statements, and correlated stock prices. Separately, they are compliant; combined, a 14.87% weight is concentrated on the same corporate system. The Penghua Gangmei Internet LOF is more extreme: 10.40% in KB LAMINATES plus 8.92% in KINGBOARD HLDG equals 19.32%. A review of the Dacheng Tech Innovation Fund's prospectus states: "The market value of securities issued by a single company (A+H shares listed in the mainland and Hong Kong are counted together) held by the Fund shall not exceed 10% of the Fund's net asset value." Since KB LAMINATES is a subsidiary controlled and consolidated by KINGBOARD HLDG, do these two stocks count as "the same company"? Does this situation of highly correlated risk constitute a violation of regulations? Even if it is not a clear violation, Dacheng Fund cannot escape the question: Was the decision by the Dacheng Tech Innovation Fund to invest in the Kingboard group truly prudent? With the stock price already having risen roughly tenfold, was it justified to use nearly 15% of the portfolio to make a concentrated bet on the same system? Was a thorough risk assessment performed? In Q2, a large number of fund investors net-subscribed over 2.4 billion units. The new capital that came in did not enjoy the benefits of the tech rally; instead, it walked straight into a stock price collapse. The fund manager reflected in the Q2 report: "The recent pullback in these price-increase stocks is worth reflecting on. From a drawdown control perspective, we should have reduced position risk in a timely manner." We hope that during the frantic decline of the Kingboard group shares in July, Guo Weiling managed to cut her losses in time.
Comments