On March 29, Zhang Kun, the star fund manager under E Fund Management, disclosed the annual reports of four funds managed by him for the year 2023. In the annual report, Zhang Kun stated that as the Chinese economy enters a high-quality growth stage, while the framework for investing in listed companies remains stable, stricter standards need to be adopted in certain specific aspects. The "miracles of great strength" and "turning a bird into a phoenix" that often occurred during the era of extensive growth will be more difficult to replicate. Business operations require more refinement, and investment targets need to be evaluated with more stringent and meticulous standards. Currently, Zhang Kun manages four public funds, namely E Fund Blue Chip Select, E Fund Quality Select, E Fund Quality Enterprise Three-Year Holding, and E Fund Asia Select. The largest fund is E Fund Blue Chip Select, with net assets of 41.738 billion RMB as of the end of the fourth quarter of 2023. Therefore, the stock operation of this fund is highly representative. Since the top ten heavy-weighted stocks have been disclosed in the fourth quarter report of 2023, the focus of this annual report falls on the hidden heavy-weighted stocks revealed in the 2023 report. Specifically, the 11th-20th hidden heavy-weighted stocks in this fund are Shanxi Fenjiu (600809.SH), WuXi AppTec (603259.SH), Yum China (09987), Li Ning (02331), Jiuzi Bio (02367), Samsonite (01910), Tasly Pharmaceutical (03347), L'OCCITANE (00973), Tongrentang Guoyao (03613), and CR Vanguard Lifestyle (01209). It is worth mentioning that out of the 10 stocks mentioned above, 6 are new additions in this report, including WuXi AppTec, Samsonite, Tasly Pharmaceutical, L'OCCITANE, Tongrentang Guoyao, and CR Vanguard Lifestyle. Their respective proportions of net asset value of the fund are 3.99%, 1.02%, 0.55%, 0.28%, 0.27%, and 0.11%. Zhang Kun believes that on the corporate governance front, in the era of extensive growth, growth can solve many problems. But in the era of high-quality growth, inefficient growth is no longer meaningful. It is expected that the management can allocate capital more finely, evaluate the opportunity cost difference between investing in new businesses and supporting existing businesses more prudently, and the importance of dividends and buybacks increases significantly. If the management's ability is poor, it may indirectly waste the shareholders' capital. As an investor, it is necessary to carefully evaluate the management's ability and willingness to return to the shareholders. The capital market is an amplifier, whether positive or negative, will be amplified. As time goes by, the amplified effect will continue to increase. Furthermore, in terms of company valuation, Zhang Kun believes that in the era of high-quality development, the probability of continuous high-speed growth of companies is decreasing. Unless a company is in a significant industry trend and has rare competitiveness (but such star companies often have a very high valuation), it is not suitable to overestimate its ability to sustain high growth judgments that are non-consensual. Regarding the company's business model, Zhang Kun points out that in the era of high-quality growth, the unique and difficult-to-imitate "traits" of the company become more important. All of the company's profits and losses come from all the decisions in history, and sometimes some very important decisions may even come from the distant past. Perhaps the management who made the decision in the first place is no longer in the company, but this decision is still playing an important role. Even in the rapidly changing technology industry in the conventional sense, companies are becoming long-lived. Among the top 20 tech companies in global market capitalization, the youngest is Meta, founded in 2004. Those seemingly "old" giants still maintain their agility. The top two companies in global market capitalization were founded in the 1970s. He further states that in an era of significant increments, a new strategic decision by a company may quickly elevate the company to a higher level; whereas in an era of limited increments, the marginal impact of a new strategic decision is difficult to avoid decline. And when a truly significant incremental trend arrives, such as AI (artificial intelligence), when all companies are fully committed, the resources they possess will become one of the key factors for success. In this AI revolution, tech giants are still leading, and the strongest infrastructure they rapidly build, the recruitment of the world's best talents become important conditions, and their niche businesses that can continuously produce cash flow are the prerequisites for all of this. At the same time, this also increases the operational flexibility of companies.