Recently, fund manager Zhang Kun of E Fund disclosed the first quarter report of 2024 for the funds under his management. As of the end of the first quarter of 2024, the total assets under Zhang Kun's management for 4 funds amounted to approximately 64.732 billion yuan, which is a decrease of approximately 742 million yuan compared to the end of the fourth quarter of 2023, a decline of 1.13%. Specifically, except for the E Fund Asia Select Stocks (QDII) fund which saw an increase in size compared to the previous period, the sizes of the other 3 products all declined. The sizes of E Fund Blue Chip Selection Hybrid, E Fund Quality Enterprise Three-Year Holding Hybrid, and E Fund Quality Select Hybrid (QDII) decreased by 1.42%, 3.72%, and 1.65% respectively. In terms of returns, during the period, the net asset value growth rates of E Fund Blue Chip Selection Hybrid, E Fund Quality Select Hybrid, E Fund Quality Enterprise Three-Year Holding Hybrid, and E Fund Asia Select Stocks were 0.91%, -0.42%, 0.79%, and 9.67% respectively. In terms of top holdings, taking a look at Zhang Kun's flagship E Fund Blue Chip Selection Hybrid, the top ten holdings were: CNOOC Limited, Wuliangye Yibin, Luzhou Laojiao, Tencent Holdings, Kweichow Moutai, Yanghe Shares, Hong Kong Exchanges and Clearing, Meituan-W, Shanxi Fenjiu, and China Merchants Bank. Among them, Kweichow Moutai saw continuous decrease in holdings by Zhang Kun for 4 consecutive quarters, and is currently ranked as the fifth largest holding; CNOOC Limited became the top holding for the first time. Additionally, WuXi AppTec exited the top ten holdings, while Shanxi Fenjiu entered the top ten holdings of E Fund Blue Chip Selection for the first time. Taking a look at the second largest fund in terms of size, E Fund Quality Select Hybrid, Zhang Kun significantly increased holdings in Alibaba, with a quarterly increase of 3.28 million shares, an increase of over 18%. Meanwhile, Kweichow Moutai saw a slight decrease in holdings and exited the top three holdings. Additionally, WuXi AppTec and JD.com exited the top ten holdings, while Huazhu Group-S and CNOOC Limited entered the top ten holdings. Furthermore, there were significant changes in the top holdings of E Fund Asia Select, with JD.com, WuXi AppTec, and Sea Ltd ADR exiting the top ten holdings, and Prada, ASML, and Samsonite entering the top ten holdings. Looking back at the first quarter of 2024, Zhang Kun pointed out that in the bond market, especially long-term government bond yields declined significantly. In the stock market, there was significant differentiation during the first quarter, with industries with high proportion of bond-like assets such as banks, petroleum and petrochemicals, and coal performing well, while industries such as pharmaceuticals, computers, and electronics lagged behind. Zhang Kun stated, "We believe that from the performance of stock assets with long-term government bonds and bond-like characteristics, market risk appetite has decreased to a very low level, specifically reflected in giving a high weight to the static dividend yield level at the time of pricing, and having a skeptical attitude towards growth especially towards the long-term growth of companies. Under a simplified model, between Company A with a 5% dividend yield and 1% growth and Company B with a 3% dividend yield and 8% growth, the market currently tends to choose Company A. These types of companies have also attracted a large amount of fixed income fund allocations." "If we review the long-term history of the capital market, one of the important reasons why stocks have a higher long-term return than bonds is that stocks have sustained growth potential, and the necessary condition for high-quality stocks is long-term sustained growth. Therefore, we believe that as stock investors, we should always give considerable weight to finding long-term growth potential. Although during the period of high-quality development, the probability of sustained high-speed growth of companies is decreasing, we should never give up the search for companies with moderate and sustained growth potential, and growth potential can also be obtained by searching in different segment structures." Zhang Kun believes that growth must be of high quality, not brought about by reckless operation or burning money, but should be obtained under conditions of a reasonable marginal investment return rate. He will pay close attention to the company's ability to control costs and expenses, manage operational capital, generate free cash flow, allocate capital, and return value to shareholders. Additionally, from a valuation perspective, Zhang Kun stated that over the past three years, due to the continuous adjustments in market expectations for long-term growth potential, the valuation of Company A has increased, while the valuation of Company B has decreased. Looking at the absolute and relative levels of various valuation dimensions (P/E ratio, market value/free cash flow), the current market pricing makes Company B with long-term high-quality growth attractive.