Is Technology Still the Main Battleground? What "Invisible Cards" Are Renowned Fund Managers Playing?

Some are buying aggressively, while others are exiting quickly, as fund managers engage in a "clash of the titans" in the second quarter. While the market is still reviewing first-quarter reports, some institutional investors have already made their "invisible moves." As several listed companies updated their shareholder lists due to share buybacks and other matters, the "stealthy" portfolio adjustment paths of a number of well-known fund managers have been revealed. For instance, Ren Jie of Yongying Fund made a move on Wuhan P&S Information Technology Co.,Ltd., Zhang Lu of Yongying Fund increased their position in Zhejiang Yinlun Machinery Co.,Ltd., Zhou Yun of Orient Securities Asset Management reduced their holdings in Guangdong Xinbao Electrical Appliances Holdings Co.,Ltd., and Ge Lan of China Europe Fund once again slashed their position in Beone Medicines Ltd. Simultaneously, institutional research activity continues to heat up, with the technology sector remaining the core focus for capital. Over the past month, institutions have conducted research visits to nearly 3,200 listed companies, with a total of over 4,100 research visits. Analysis reveals that sectors such as mechanical equipment and electronics have become absolute "traffic centers." With the second-quarter market performance nearly halfway through, the portfolio adjustments of star fund managers have been gradually revealed. Coupled with the sustained heating up and accelerated research pace in the technology sector, will the technology mainline in the A-share market see a new round of covert portfolio adjustment battles? Some fund managers have already hinted: "We won't liquidate positions just because prices have risen significantly, but we will adjust between high and low valuations." "Invisible Cards" Reveal Divergent Portfolio Adjustments Recently, Wuhan P&S Information Technology Co.,Ltd. updated its list of top ten shareholders and top ten shareholders with unrestricted sale conditions due to a share buyback. Data shows that as of May 8th, Yongying Technology Intelligent Selection, managed by Ren Jie, appeared among the company's top ten circulating shareholders, holding 9.3249 million shares with an end-period reference market value of 1.3 billion yuan, ranking as the seventh largest circulating shareholder. Interestingly, upon reviewing various data including the fund's full holdings disclosed in last year's annual report, it was found that Wuhan P&S Information Technology Co.,Ltd. was not present in the previous holdings list. Furthermore, the list of top ten circulating shareholders disclosed by the company on April 16th also did not include this fund product. This indicates that within the past month, Ren Jie has at least made buying additions. Yongying Technology Intelligent Selection gained fame for winning the championship among actively managed equity funds last year. As of May 12th, the year-to-date return for the A-class shares of this product also exceeded 38%. According to the first-quarter report, the fund primarily focuses on investments in the global cloud computing industry, with its top ten major holdings including Zhongji Innolight Co.,Ltd., Eoptolink Technology Inc.,Ltd., and others. Public information shows that Wuhan P&S Information Technology Co.,Ltd. is the first A-share listed company in China's domestic electronic component distribution industry and has been actively expanding in the robotics field in recent years. In terms of stock price performance, as of May 13th, although the stock price has recently declined, its cumulative increase for the year still reached 49.85%, with a total market capitalization exceeding 170 billion yuan. Judging from recently disclosed announcements, portfolio adjustments by fund managers are not isolated cases. In the latest shareholder list of Gambol Pet Group Co.,Ltd., as of May 8th, the Xingquan Hefeng Three-Year Holding fund, jointly managed by Yang Shijin and Zhu Kefu, newly entered the list of top ten circulating shareholders with 700,000 shares. Data from April 22nd did not show its presence. The Yongying Advanced Manufacturing Intelligent Selection fund, managed by the billion-scale fund manager Zhang Lu, increased its position in Zhejiang Yinlun Machinery Co.,Ltd., holding nearly 9 million shares as the company's eighth largest circulating shareholder. Meanwhile, annual report data showed that at the end of last year, the company ranked 23rd in the fund's holdings, with only 6.41 million shares held. In contrast to the above new entries, many fund managers have been actively reducing their holdings. Combining first-quarter report data, the billion-scale fund manager Zhou Yun's managed funds, Orient Securities Hongxin New Power and Orient Securities Hongxin JD Big Data, reduced their holdings in the discretionary consumer stock Guangdong Xinbao Electrical Appliances Holdings Co.,Ltd. by 193,000 shares and 168,300 shares respectively. The Peng Hua Qihang Quantitative Stock Selection fund, managed by Su Junjie, reduced its holdings in the chemical sector stock Guochuang High-tech by 1.586 million shares. In the pharmaceutical sector, the China Europe Healthcare fund, jointly managed by Ge Lan and Zhao Lei, continued to reduce its holdings in Beone Medicines Ltd. The first-quarter report released on May 12th showed that the fund reduced its holdings by nearly 2.3 million shares, ultimately holding 1.8127 million shares, dropping from the largest circulating shareholder at the end of last year to the fifth position. According to fund periodic reports, this product has reduced its holdings in Beone Medicines Ltd. for three consecutive quarters. It held 4.1122 million shares at the end of last year and removed it from its top ten major holdings in the first quarter of this year. What Clues Are Captured in Over 4,100 Research Visits? Behind the portfolio adjustments, the pace of institutional research is accelerating. Wind data shows that as of May 13th, in the past month, 3,182 listed companies received institutional research visits, with a total of 4,125 research visits. In terms of industry distribution, industry sectors closely related to the technology field remain the preferred areas for institutional investors. Among them, the mechanical equipment industry stands out with particularly high activity, becoming a key focus for institutional research in the past month. 370 stocks collectively received 483 research visits, leading in both the number of visits and the number of covered targets. For example, companies like Guojijinggong, Qiaofeng Intelligent, and Dazu Laser each indirectly received 7 research visits. The electronics industry has become another major focus, with equally intensive institutional research visits. In the past month, 324 listed companies collectively received 456 institutional visits, with a cumulative participation of over 8,200 institutions. This is also the industry with the highest participation from foreign institutions, securities firms, fund companies, and other institutional investors. Wind data shows that as of May 13th, among the listed companies that received research visits in the past month, 134 stocks have seen cumulative increases of over 100% since the beginning of the year, with 9 stocks doubling in the past month, most of which are also related to technology. So, after some performance in the AI sector, will fund managers adjust their holding strategies next? "Short-term gains have indeed been rapid, but there is still room for performance growth for the full year and into next year. Moreover, the long-term logic for leading companies hasn't changed. Therefore, we won't liquidate positions just because 'prices have risen significantly,'" a Shanghai-based fund manager focusing on related sectors revealed. They added that they would only engage in some tactical trading when a target's price rises significantly beyond expectations or approaches a set target price. In their view, the technology sector experiences high volatility, and structural optimization and moderate adjustments between high and low valuations can be made based on cost-effectiveness. "Often, losses are not due to choosing the wrong direction, but because of buying at emotional highs and selling at panic lows. I try to avoid such operations," they stated. Jindalai, a macro strategy researcher at the equity research department of Golden Eagle Fund, expressed a similar view. She noted that as geopolitical impacts on A-shares gradually diminish, the market is expected to continue focusing mainly on directions with high policy support and high industry prosperity. However, attention should also be paid to the subsequent impact of stagflation realities and the fluctuations brought by short-term trading factors after concentrated trading in industry trends. "The short-term characteristic of switching from high to low valuations may strengthen, and thematic market trends may usher in a phase of favorable conditions," Jindalai analyzed. For technology growth directions, focus should still remain on varieties with solid performance and order industry trends. Additionally, as the first-quarter reporting season nears its end, attention will shift to varieties with strong inherent industry logic, including innovative drugs and commercial aerospace. Apart from domestic institutions, the research enthusiasm of foreign institutions has significantly rebounded. In the past month, 396 listed companies received research from foreign institutions, an increase of approximately 80% month-on-month. The total number of participating institutions reached 1,986, also increasing by nearly 70%. Wang Zonghao, Head of China Equity Strategy Research at UBS, stated that based on his observations, foreign institutions' allocations to Chinese stocks have remained stable for the third consecutive quarter, but the flow directions of different types of funds have diverged. At the industry level, international investors' increased positions are mainly concentrated in insurance, pharmaceuticals, automobiles, and new energy, while they have reduced holdings in the consumer and internet sectors. "Looking at regional fund flows in Asia, influenced by the Iran conflict, international investors reduced positions in February and March, but made small-scale repurchases in April," he said. Based on regional fund flow judgments, after the ceasefire in the Middle East in April, foreign investors' risk appetite for emerging market stocks has rebounded, which may indirectly benefit Chinese stocks. "On a 12-month horizon, we are more optimistic about A-shares due to relatively stable earnings growth, higher exposure to electrical equipment and technology hardware, and sustained high trading volumes, which historically have a high correlation with market performance," Wang Zonghao revealed. Despite relatively weak recent net inflows, he maintains a tactical positive view on the Hang Seng Tech Index for the next 1 to 2 months.