"Deep Dive" Fund Quarterly Report | Who Captured the Most "Bullish Stock" in Hong Kong Stock Connect?

Is there still an opportunity for active investment?

The answer is yes.

The latest fund's Q4 report revealed such a fund.

In the fourth quarter of last year, this fund captured the two most actively performing stocks among Hong Kong Stock Connect listed companies:

POP MART and LAOPU GOLD.

This fund is Guangfa Value Core.

Who is the "strongest" stock in Hong Kong Stock Connect?

Among all Hong Kong Stock Connect targets, the best performer in 2024 should be POP MART and LAOPU GOLD.

The former swept the Southeast Asian market with blind boxes, rising nearly 350% throughout the year.

The latter is even more impressive, after listing at a minimum of HKD 60.95 on June 28, 2024, it soared, increasing nearly 250% in six months, quickly ranking among the top gainers in Hong Kong Stock Connect.

Capturing opportunities is quite challenging

However, the opportunities for these two listed companies are not easy to capture.

Taking POP MART as an example, it was highly regarded at the time of its IPO in 2020, reaching a peak of over HKD 106 per share.

However, subsequent discussions about its business model and valuation continuously impacted institutional holding confidence, and ultimately the company lost 90% in two years! The stock price fell to below HKD 10 per share at its lowest.

Generally, stocks that drop more than 90% are often abandoned by many institutions due to excessive volatility.

But POP MART, stimulated by its continuous cultivation of popular IPs, aggressively expanded in the Southeast Asian market, surging 346.66% in 2024, and approaching the historical high of HKD 100 per share.

Such a story of "falling down" and then "rising up" is truly legendary and rare in the Hong Kong stock market.

Last year's strongest new stock

LAOPU GOLD is another story, "puzzling" yet "legendary."

At its IPO, the company was offered at HKD 40.5 per share, knowing that in the previous 2023 annual report, the company's earnings per share were over HKD 3. The initial offering price was clearly quite conservative.

As expected, the company was very popular during the issuance period, with a subscription rate of 582.15 times for the public offering in Hong Kong and 11.9 times for the international offering phase.

Subsequently, it became a historical low at the beginning of its listing, rising 244.57% in about six months, which is also quite astonishing.

Although, for the vast majority of investors, the so-called "ancient method gold" craftsmanship may be unclear, the company's stock price has risen many times amidst a sea of "incomprehension." In the economic adjustment cycle, high-priced gold jewelry chain companies have gained popularity, and the investment logic behind them is likely to test many institutions.

Simultaneously Capturing Two Bull Stocks

However, there is a fund manager who managed to capture this fund.

The latest disclosed fund Q4 report shows that the top two holdings of the Guangfa Value Core Fund managed by Wu Yuanyi at the end of last year were POP MART and LAOPU GOLD.

Perhaps due to the leadership of these two bull stocks, the fund rose more than 6% against the trend in Q4 2024, ranking just into the top 20% of the industry (according to statistics from Tian Tian Fund).

"Buy" POP MART for a Long Time

From the publicly available investment data, it was around the first half of 2024 that Wu Yuanyi started "sweeping" POP MART.

In the Q2 report, POP MART appeared for the first time on the list of major holdings of Guangfa Value Core, accounting for 5.85% of the fund's net value.

In Q3, the fund continued to increase its position in POP MART, with the market value of its holdings accounting for 8.02% of the fund's net value, becoming the largest holding.

The latest Q4 report shows that although the fund reduced its holdings in POP MART during Q4, it still remains the largest holding of the Guangfa Value Core Fund, with the market value of its holdings accounting for 8.15% of the fund's net value.

Overall, even if only considering the increase in POP MART's stock price in the second half of 2024, it has exceeded 134%.

An interesting detail is that the Guangfa Value Core Fund had previously "temporarily" held POP MART in the second half of 2022 but cleared its position in the first half of 2023, during which it likely did not make much profit.

But this time, it has found the way.

Q4 Layout for LAOPU GOLD

LAOPU GOLD went public at the end of June 2024, and its performance in the second half of the year was explosive.

However, Wu Yuanyi could not buy LAOPU GOLD at the beginning of its listing— it was not included in the Hong Kong Stock Connect list.

Most likely, he began to gradually lay out after LAOPU GOLD entered the Hong Kong Stock Connect list in September.

However, in the Q3 report, LAOPU GOLD did not appear on the list of major holdings of the Guangfa Value Core Fund.

In Q4, as soon as LAOPU GOLD appeared, it became the second largest holding, just after POP MART.

Considering that LAOPU GOLD has risen nearly 40% in January 2024—just as high as the enthusiasm of its offline queue customers.

It is highly likely that this stock has brought profits to the fund again.

What Hotspots to Focus On

Wu Yuanyi did not reveal too much about the decision-making process for the aforementioned stocks in the fund's quarterly report.

However, he mentioned that in the new consumption sector, new consumption models are emerging in various fields, such as the "millet economy" and domestic trendy consumer goods, showcasing the transformation and progress in the consumption field driven by the development of the times.

This seemingly understated statement actually indicates an undercurrent, which ultimately materializes in two major Hong Kong stocks.

The quarterly report also mentioned that from the perspective of industry fundamentals, the new energy sector has undergone more than two years of deep adjustment, and current industry prices may have reached the bottom area. The photovoltaic industry alliance is gradually taking shape, and under the implementation of quantity control and price protection strategies, the marginal improvement effects in the industry are significant. The new energy battery sector is similar, also showing positive changes.

It is worth noting that the domestic computing power and model fields are expected to achieve significant breakthroughs. As domestic AI models and related products gradually enter the public eye, investments in the domestic computing power sector may significantly increase in the next one to two years, and the domestic application main line is also expected to become a new investment direction.

Whether these statements will lead to any market opportunities in the future is quite intriguing.

Risk Warning and Disclaimer

The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investing based on this is at one's own risk