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

Zhang Kun, manager of a US$3.1 billion fund, cut holdings in Kweichow Moutai by 47%, Wuliangye by 71%, Luzhou Laojiao by 52%, and Alibaba by 75% in the second quarter, pivoting to AI-linked stocks like SMIC and Suzhou Dongshan Precision Manufacturing, citing downside pressure on the economy exceeding expectations.

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’ Zhang Shidong /author/zhang-shidong in Shanghai 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 baijiu distillers – 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 https://www.scmp.com/tech/tech-trends/article/3359851/chinas-circuit-board-makers-push-capex-towards-record-feed-ai-boom?module=inline&pgtype=article , 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 https://www.scmp.com/economy/economic-indicators/article/3357227/chinas-economic-imbalances-deepen-may-retail-sales-drop-first-decline-late-2022?module=inline&pgtype=article , with sales of high-end plunging on falling demand and online shopping stalling because of reduced subsidies from e-commerce platforms. Zhang had https://www.scmp.com/topics/baijiu?module=inline&pgtype=article baijiu doubled down on his https://www.scmp.com/business/china-business/article/3351290/baijiu-bet-chinas-top-fund-manager-doubles-down-consumers-amid-signs-recovery?module=inline&pgtype=article in the first quarter. baijiu positions“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.