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China's largest fund manager ups its tech investments from Meituan to TSMC due to AI growth

The largest fund manager in China increased his purchases of technology stocks in the first quarter, from Meituan to Taiwan Semiconductor Manufacturing Corp (TSMC), betting that the worst of a protracted regulatory crackdown on the industry is behind it and that an AI boom will boost demand for processing chips.

According to the first-quarter portfolio report released on Friday, Zhang Kun, who manages US$13 billion in assets for the Guangzhou-based E Fund Management, purchased 3 million shares of Meituan, China's largest on-demand delivery service provider, in his flagship Blue Chip Selected Mixed Fund.

In addition, he expanded his holdings in Alibaba Group and for the smaller Asian Elite Fund over the first three months and bought 112,000 shares of TSMC, the largest contract chip manufacturer in the world.

The portfolio recalibration demonstrates how China's top money managers have positioned their funds in response to a number of significant news stories, such as Jack Ma Yun's comeback and the introduction of AI-powered ChatGPT and its Chinese rivals.

In order to recoup from a decline that destroyed at least US$1 trillion in value when Beijing increased its monitoring of the tech sector, the Hang Seng Tech Index and the Nasdaq Golden Dragon China Index have added over US$40 billion in market capitalization between them this year.

According to Zhang in the quarterly report, the government's "unswerving" support for business this year, which is incorporated in the government work report, "boosts confidence in the market and among entrepreneurs." "We continue to adhere to high-quality companies with decent business models, clear industry landscapes and strong competitiveness."

Following the acquisition, his blue chip fund valued at 56 billion yuan ($8.13 billion) had 25 million shares of Meituan, ranking tenth among its holdings and accounting for 5.6% of the fund's net asset value as of the end of March. After Zhang marginally expanded its holding by purchasing 48,000 shares in the first three months, Kweichow Moutai, the world's largest producer of liquor, nevertheless represented the fund's largest investment, accounting for over 10% of the allocation.

According to the report, the fund's other top holdings include the WeChat operator Tencent Holdings, the Chinese baijiu producers Luzhou Laojiao and Wuliangye Yibin, and the oil producer CNOOC.


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