Core Viewpoint - Liu Zheng's investment strategy emphasizes a low valuation value investment approach, which has shown resilience and adaptability in the face of market fluctuations, leading to a year-to-date return exceeding 50% as of November 7, 2023 [1][5]. Investment Strategy - Liu Zheng's investment framework is rooted in a "low valuation value investment strategy," which has been validated through multiple market cycles and is considered scientifically sound and sustainable [2]. - The selection of stocks is deemed the lifeline of the portfolio, focusing on fundamental clues and valuation safety margins to identify undervalued assets with high implied returns and clear risk-reward characteristics [2]. - The strategy is not static; it evolves through practice, incorporating risk management indicators, especially after expanding into Hong Kong stocks, to address higher market volatility [2]. Market Perspective - Liu Zheng maintains a cautious stance towards high-growth sectors like AI, questioning the sustainability of high ROE in such environments and advocating for a return to fundamental business logic [3]. - The investment strategy prioritizes a comprehensive understanding of risk-reward ratios over rigid left-side or right-side positioning, allowing for flexibility in purchasing decisions based on future growth potential [3]. Market Outlook - The current equity market is viewed positively, with expectations of a cyclical recovery in active equity funds as economic conditions improve, providing fertile ground for excess returns [5]. - Liu Zheng identifies structural opportunities in sectors such as domestic demand, resources, midstream manufacturing, and technology, despite existing macroeconomic pressures [5]. - The risk premium levels in the market remain above historical medians, indicating that overall valuations are still within a reasonable range [5]. Hong Kong Market Analysis - The Hong Kong market is characterized by a low equity risk premium, with significant discounts for H-shares compared to A-shares, presenting unique investment opportunities [6]. - Liu Zheng highlights the presence of high-quality assets in the Hong Kong market that are not easily found in the A-share market, reinforcing the case for portfolio diversification [6]. - The analysis suggests that despite short-term uncertainties, there is confidence in the long-term potential of the Hong Kong market, driven by structural factors and relative valuation advantages [6].

Core Viewpoint - Liu Zheng's investment strategy emphasizes a low-valuation value investment approach, which has shown resilience and adaptability, leading to a year-to-date return exceeding 50% as of November 7, 2023 [1][3] Investment Strategy - The investment framework is rooted in a "low-valuation value investment strategy," which has been validated through multiple market cycles and is considered scientifically sound and sustainable [1] - Stock selection alpha is deemed essential for the portfolio's survival, focusing on fundamentally sound companies with low valuations and high implied returns [1] - The strategy is not static; it evolves through practice, incorporating risk management and liquidity considerations, especially when expanding into Hong Kong stocks [1] Market Perspective - Liu Zheng maintains a cautious stance towards high-growth sectors like AI, questioning the sustainability of high ROE in such environments and advocating for a return to fundamental business logic [2] - The current equity market is viewed positively, with expectations of a cyclical recovery in active equity funds as economic conditions improve [3] - Structural opportunities are identified in domestic demand, resources, midstream manufacturing, and technology sectors, despite existing macroeconomic pressures [3] Market Valuation Insights - The dynamic assessment of market conditions indicates that the risk premium for the CSI 800 index remains above historical medians, suggesting overall valuations are still reasonable [4] - In contrast, the Hong Kong market shows a low risk premium due to high benchmark yields, presenting unique investment opportunities, particularly in H-shares that are undervalued compared to A-shares [4]

Core Viewpoint - Liu Zheng's investment strategy emphasizes a low-valuation value investment approach, which has shown resilience and adaptability, achieving over 50% annual returns as of November 7 this year [1][5]. Investment Strategy - Liu Zheng's investment framework is rooted in a "low-valuation value investment strategy," which has been validated through multiple market cycles and is considered scientifically sound and sustainable [2]. - Stock selection alpha is deemed the lifeline of the portfolio, focusing on fundamental clues and valuation safety margins to identify undervalued stocks with high implied returns and clear risk-reward characteristics [2]. - The strategy is not static; it evolves through practice, incorporating risk management indicators, especially after expanding into Hong Kong stocks [2]. Market Perspective - Liu Zheng maintains a cautious stance towards high-growth sectors like AI, questioning the sustainability of high ROE in such environments and emphasizing a return to fundamental business logic [3]. - The core of the strategy is not about "left-side" or "right-side" buying but ensuring a "low valuation throughout the entire lifecycle" with a favorable risk-reward ratio [3]. Current Market Outlook - Liu Zheng is optimistic about the equity market, believing that active equity funds are experiencing a cyclical return as the economy begins to recover [5]. - He identifies structural opportunities in domestic demand, resources, midstream manufacturing, and technology sectors, despite ongoing macroeconomic pressures [5]. - The investment team uses a dynamic assessment model based on equity risk premium, indicating that the current valuation remains within a reasonable range despite recent market increases [5]. Hong Kong Market Analysis - The Hong Kong market is characterized by a low equity risk premium, with the Hang Seng Index's risk-free rate benchmark remaining high compared to U.S. Treasury yields [6]. - Liu Zheng highlights three considerations for investing in Hong Kong stocks: significant discounts of 30%-50% for H-shares compared to A-shares, unique high-quality assets in the Hong Kong market, and the relative undervaluation of certain stocks due to structural market factors [6].