Review of the first quarter! The investment ideas of Lan Xiaokang, Ge Lan, Liu Weiwei, and Dai Yunfeng from China - Europe Fund are revealed.
Since the beginning of this year, breakthroughs made by Chinese enterprises in the technology field have driven the revaluation of Chinese assets. Looking back at the first quarter, the equity market was active. The Hong Kong stock market rose more than the A-share market. Theme sectors related to technological growth, such as robotics, AI applications, and domestic computing power, performed outstandingly. At the same time, the pharmaceutical sector also welcomed a long-awaited performance recovery period.
Looking forward to the second quarter, the tariff policies of the Trump administration have increased market uncertainty, presenting both challenges and opportunities. How will the market style change? Which sectors are worthy of key attention? Recently, the first-quarter reports of public funds have been gradually released. After sorting them out, it is found that the latest views of several fund managers under China Europe Asset Management are quite valuable for reference.
Blue Xiaokang, a value-oriented fund manager at China Europe Asset Management, believes that after the market adjustment triggered by this round of tariffs, the policies of China and the United States will rise in resonance. Commodity-based and low-valued assets will be the most important directions. Regarding precious metals, after this short-term fluctuation, investors can observe whether the logic of de-dollarization in transactions emerges. From an annual cycle perspective, the expected returns of low-valued stocks in the Hong Kong stock market are still stronger than those of similar companies in the A-share market. Ge Lan, a fund manager at China Europe Asset Management, said that looking forward to the second quarter, she still is optimistic about the continuous breakthroughs in innovative drugs, the recovery of consumer healthcare, and the domestic substitution of key links in the industrial chain. In the field of innovative drugs, the continuous advancement of global cooperation and the disclosure of key clinical data are worth looking forward to.
Blue Xiaokang: The valuations of China's fundamental and vital industries represented by banks should be systematically increased
In the first-quarter report of China Europe Dividend Optimized Fund, Blue Xiaokang detailed his latest thoughts and insights on the macroeconomy. Taking the real estate market as an example, the shrinkage of the housing market in the past three years has indeed affected the balance sheets of some residents, which in turn has influenced their consumption behavior. Since real estate accounts for a relatively high proportion of residents' wealth, there are still some challenges in strongly restoring consumers' consumption ability and confidence. However, based on the data released by listed companies, it can be seen that the growth rate of residents' income has been steadily increasing. By controlling consumption to reduce debt pressure, as time passes and residents' leverage decreases, an increase in consumption is a likely outcome. Blue Xiaokang said that everyone has their own cognitive framework and is often influenced by values, personalities, and emotions. He can understand people's current emotions, such as the lack of confidence in stocks at the bottom. But he believes that the existing data can support the judgment that the real estate market may recover, and the consumption growth rate, as well as the prices of goods and services, will rebound.
At the market operation level, due to the emergence of the sixth-generation fighter jets and DeepSeek, sectors represented by technology, such as the Internet, new energy vehicles, computers, consumer electronics, and the military industry, have been favored by investors. The difference in Blue Xiaokang's perception from the market is that he believes that industries related to technology, national defense, and financial security are all supports for system stability and system competitiveness. They rise and fall together. In his view, strong technology and productivity mean that China will not face systemic financial risks, and it also means that the valuations of the country's fundamental industries represented by banks should return to a reasonable level. Blue Xiaokang said that the asset quality and future prospects of Chinese banks should be better than those of American banks. Currently, the pricing of Chinese banks is significantly lower than their net assets, while the valuations of American banks exceed 1 times the price-to-book ratio. Therefore, whether compared with the pricing of American banks or the pricing logic of Chinese technology assets, the valuations of China's fundamental and vital industries represented by banks should be systematically increased.
Looking forward to the future market, in the monthly and quarterly dimensions, tariffs will still bring market uncertainty. However, Blue Xiaokang believes that with the pre - emptive policies of China, the tariff risks can be hedged. Therefore, from an annual perspective, he continues to be optimistic about the stock market. After the market adjustment triggered by this round of tariffs, the policies of China and the United States will rise in resonance. Commodity-based and low-valued assets will be the most important directions. Regarding precious metals, after this short-term fluctuation, investors can observe whether the logic of de-dollarization in transactions emerges. From an annual cycle perspective, the expected returns of low-valued stocks in the Hong Kong stock market are still stronger than those of similar companies in the A-share market.
Ge Lan: Continue to focus on allocating to fields such as innovative pharmaceutical and medical devices, OTC, and consumer healthcare
In the first quarter of 2025, the pharmaceutical industry showed significant structural differentiation characteristics in a complex internal and external environment. The Shenwan Pharmaceutical Index rose steadily by 2.30% overall. The innovation industry chain generally performed well. The chemical pharmaceutical sector rose by 5.9%, and the medical R & D outsourcing sector rose by 12.4%, while the traditional Chinese medicine sector adjusted.
Ge Lan wrote in the first-quarter report of China Europe Healthcare Innovation Fund that in the field of innovative drugs, the R & D of cutting-edge technologies such as multi - specific antibodies and ADCs has accelerated breakthroughs. Many domestic enterprises have reached major cooperation agreements with overseas multinational companies on multiple products, marking a significant improvement in the internationalization ability of domestic innovative drugs. In terms of medical devices, the tendering data of the domestic medical equipment market rebounded significantly in the first quarter. Based on the long - term value investment concept, combined with the profit cycle of enterprises, historical valuation levels, and business trends, she continues to focus on allocating to fields such as innovative pharmaceutical and medical devices and their industrial chains, OTC, and consumer healthcare.
Looking forward to the second quarter, Ge Lan still is optimistic about the continuous breakthroughs in innovative drugs, the recovery of consumer healthcare, and the domestic substitution of key links in the industrial chain. In the field of innovative drugs, the continuous advancement of global cooperation and the disclosure of key clinical data are worth looking forward to. The competitiveness of Chinese enterprises in fields such as ADCs, multi - specific antibodies, and peptides has gradually been recognized globally. Project cooperation with domestic enterprises has become an important part of the pipeline layout of overseas companies. At the same time, overseas enterprises are continuously promoting global clinical trials for multiple indications after acquiring domestic products. In addition, during international conferences such as AACR and ASCO, domestic enterprises will disclose a number of important clinical data. The application of AI pharmaceutical technology in target discovery and its improvement of R & D efficiency are also worthy of continuous attention.
Liu Weiwei: Intelligent driving is the strongest industrial trend this year
Liu Weiwei, who is good at technology - growth investment, said in the first-quarter report of China Europe Era Win - win Fund that the positive returns of his portfolio in the first quarter mainly came from industrial directions such as the whole vehicle, Hong Kong - listed Internet companies, domestic computing power, and artificial intelligence applications such as robotics. Considering the high expected capital expenditure of cloud providers, he reduced his holdings in the North American computing power chain in the first quarter and also reduced his holdings in energy storage inverter companies with a deteriorating competitive landscape. He increased his holdings in the whole vehicle and Internet sectors. Since most high - quality companies are in the Hong Kong stock market, the proportion of Hong Kong stocks in his portfolio also increased significantly.
Liu Weiwei believes that in the second quarter, the macroeconomy faces external uncertainties. In portfolio allocation, one should look for certain industrial trends in an uncertain world. From an annual perspective, he still is optimistic that technology - growth will be the main line and is bullish on industrial directions such as intelligent driving, the Internet, domestic computing power, edge devices, and lithium - battery energy storage.
"Intelligent driving is the strongest industrial trend this year. As leading car manufacturers put forward the concept of 'equal rights for intelligent driving', other car manufacturers have also followed suit. The penetration rate of intelligent driving in China will increase rapidly this year, crossing the 10% critical point." Liu Weiwei said that he specifically is optimistic about companies in the intelligent driving industrial chain, such as those in the whole vehicle, chips, connectors, and lidar sectors. In addition, the second quarter is a period of intensive releases of AI glasses, and edge - side hardware will also receive a boost.
Dai Yunfeng: Sub - industries such as the Internet and AI edge devices are expected to enter a new period of prosperity driven by AI
In the first-quarter report of China Europe Technology Growth Fund, Dai Yunfeng wrote that he overall increased his holdings in high - quality assets in the Hong Kong stock market, mainly concentrated in fields such as the Internet, intelligent driving, and semiconductors. With the advancement of the AI industry, the relevant business potential of some Hong Kong - listed Internet companies is relatively large. The moats and safety margins of their traditional businesses are relatively high, and their assets are expected to be revalued, making them good investment options.
As the intelligent driving industry entered an accelerated penetration period in 2025, a few companies in the Hong Kong stock market have the potential to stand out in the long term, and they are also in a clear product up - cycle in the next 1 - 2 years. In addition to his existing holdings, Dai Yunfeng also increased the allocation of some other varieties. Moreover, he reduced the proportion of new energy holdings in his portfolio. Although the industry will still be in a stable growth period in the next 2 - 3 years, considering the marginal deterioration trend of the competitive landscape in some segments, the long - term profit curves of relevant companies will be negatively impacted.
Overall, Dai Yunfeng is optimistic about the investment opportunities brought by a new round of technological revolution driven by AI in the next 1 - 2 years. In the narrow - sense TMT industry, he is optimistic that sub - industries such as the Internet, AI edge devices, AI agents, advanced semiconductor manufacturing processes, and new materials are expected to enter a new period of prosperity driven by AI. In the general manufacturing field, including sub - industries such as machinery and equipment, auto parts, and new energy, new growth drivers will be generated under the drive of AI + applications such as intelligent driving and humanoid robots. At the same time, there are also relevant investment opportunities in some consumer fields related to population structure and key livelihood issues under potential policy support.