China’s star fund manager dumps long-held consumer bets in pivot to AI trade

Zhang Kun cuts US$3.1 billion fund’s holdings in baijiu and e-commerce as ‘downside pressure on the economy has exceeded expectations’

[artificial intelligence](https://www.scmp.com/topics/artificial-intelligence?module=inline&pgtype=article)-linked names, abandoning years-long bets to align with the evolving dynamics of the

[stock market](https://www.scmp.com/topics/stocks?module=inline&pgtype=article).

[Kweichow Moutai](https://www.scmp.com/topics/kweichow-moutai?module=inline&pgtype=article), Wuliangye Yibin and Luzhou Laojiao – China’s biggest

baijiudistillers – by at least 47 per cent in the second quarter, according to a comparison of quarterly portfolio reports. He also trimmed

[Alibaba Group Holding](https://www.scmp.com/topics/alibaba?module=inline&pgtype=article)by 75 per cent in the period, the data showed.

[Semiconductor Manufacturing International Corp (SMIC)](https://www.scmp.com/topics/smic?module=inline&pgtype=article)and

Suzhou Dongshan Precision Manufacturing, a maker of optical modules used in AI data centres, according to the fund’s second-quarter portfolio report, released this week. The two stocks made their way into Zhang’s top 10 holdings.

retail sales remained sluggish, with sales of high-end

plunging on falling demand and online shopping stalling because of reduced subsidies from e-commerce platforms. Zhang had

baijiudoubled down on hisin the first quarter.

baijiupositions“Judging from the data on retail sales and employment, the downside pressure on the economy has exceeded expectations,” Zhang said in his fund’s report this week. “Households are turning more cautious about future expectations. Excessive household savings have kept rising to cope with the uncertainty arising from employment.”

In the April-to-June period, Zhang cut holdings of Kweichow Moutai to 968,500 shares, a decrease of 47 per cent from the preceding three-month period, while paring positions in Wuliangye by 71 per cent to 7.53 million shares and in Luzhou Laojiao by 52 per cent to 12.18 million shares, according to the report. Zhang held 5.78 million Hong Kong-traded shares in Alibaba as of the end of June, compared with 23.5 million in the first quarter.