On July 19, Zhonggeng Fund disclosed the second quarterly report of its well-known fund manager Qiu Dongrong. In terms of scale, except for the Zhonggeng Hong Kong Stock Connect Value 18-month closed-end fund, the scale of the other four funds managed by Qiu Dongrong has all shrunk to varying degrees. Data shows that as of the end of the second quarter, the total scale of Qiu Dongrong's managed funds was 14.708 billion yuan, a decrease of 5.146 billion yuan compared to the end of the first quarter. Specifically, by the end of the second quarter, the largest fund managed by Qiu Dongrong, Zhonggeng Value Leading, had a latest scale of 4.984 billion yuan, a decrease from 6.899 billion yuan at the end of the first quarter. Zhonggeng Value Leading's net asset value increased by 5.37% in the second quarter, but the net redemption share was as high as 11.17 shares. Zhonggeng Value Leading reduced its stock holdings from 92.5% to 84.77% compared to the first quarter. Holdings in stocks such as Saite Technology (603283.SH), China Overseas Development (00688), and Chuanyi Co., Ltd. (603100.SH) were significantly reduced; while holdings in Yuexiu Real Estate (00123) were reduced slightly. Lihua Co., Ltd. (300761.SZ), Hubei Xuanhua Co., Ltd. (000422.SZ), and China Xia Airlines (002928.SZ) were among the new top ten heavy-weighted stocks. Hubei Yihua Chemical and China Xia Airlines are among the top ten heavy-weighted stocks newly purchased in the first half of this year, but their stock prices in the second quarter all showed negative growth. By the end of the second quarter, the concentration of Zhonggeng Value Leading's holdings increased from 51.67% to 56.18%. In terms of regional allocation, there was a slight reduction in Hong Kong stocks and an increase in A-shares. The stock position of Zhonggeng Small Cap Value fund has remained almost unchanged, maintaining a high position operation of 91.77%. The focus was on reducing holdings, with significant reductions in Saite Technology, Chuanyi Co., Ltd., Changshu Automotive Decoration (603035.SH), Poly Development (600048.SH), Hua Gong Technology (000988.SZ), and Lihua Co., Ltd. (300761.SZ) being among those significantly reduced. Huafa Co., Ltd., Hangyu Technology, Dinsheng New Material, and Zhenjiang Co., Ltd. were among the new top ten heavy-weighted stocks. It is worth noting that the concentration of Zhonggeng Small Cap's holdings increased significantly to 64.99% in the second quarter. Looking at Zhonggeng Value Flexibility, the stock position of the product increased from 89.61% at the end of the first quarter to 93.96%, with significant increases in Huafa Co., Ltd. and Changchun High-tech (000661.SZ), while reductions in holdings of Ningbo Bank and Antu Biosciences exceeded 27%. There were six new top ten heavy-weighted stocks, including Lihua Co., Ltd., Western Mining (601168.SH), Muyuan Co., Ltd. (002714.SZ), Nasda (002180.SZ), Jinmou Co., Ltd. (601958.SH), and Hubei Yihua Chemical. In terms of regional allocation, there was a slight reduction in Hong Kong stock positions and an increase in A-shares market for Zhonggeng Value Quality. From the perspective of repositioning, China Overseas Development reduced its holdings by more than 28%, while reducing holdings of Saite Technology and Chuanyi Co., Ltd.; there was a slight increase in Green Leaf Pharmaceuticals. Zeropom Car (09863), Lihua Co., Ltd., Kuaishou (01024), China Overseas Hongyang Group (00081), and Hubei Yihua entered the top ten heavy-weighted stocks. The concentration of Zhonggeng Value Quality's holdings increased from 49.45% to 55.45%. On the other hand, the stock position of Zhonggeng Hong Kong Stock Connect Value fund decreased from nearly full position of 99.47% at the end of the first quarter to 95.94% at the end of the second quarter. From the perspective of repositioning, there was a significant increase in Zeropom Car and Kuaishou; reductions in China Overseas Hongyang Group, etc. Huafa Co., Ltd., Yuexiu Real Estate, Everbright Environment (00257) were among the new top ten heavy-weighted stocks. In terms of regional allocation, Qiu Dongrong reduced the Hong Kong stock allocation and increased the A-shares market allocation from 0.21% at the end of the first quarter to 9.9%. The main increase was in Huafa Co., Ltd., which is the only A-share company among the top ten heavy-weighted stocks in the Zhonggeng Hong Kong Stock Connect Value fund, accounting for 6.01% of the fund's net asset value. In the latest quarterly report, Qiu Dongrong once again mentioned, "Hong Kong stocks still have a high cost-effectiveness, and some of the scarce companies with high vitality and innovation in the Chinese economy should actively allocate equity assets." Regarding the current market main theme of high dividend stocks, Qiu Dongrong expressed his views on the risks: "We do not reject the underlying logic that the market values the return of listed companies' shareholders, but the high dividend strategy has been continuously strengthened and linearly traded in the trend, leading to a continuous decrease in the cost-effectiveness of benchmark companies." Qiu Dongrong also mentioned three major focus areas: first, technology stocks such as pharmaceuticals, Internet, and smart electric vehicles with strong business growth attributes and large future space; second, value stocks in Hong Kong with tight supply or rigidity, including real estate, resource companies represented by basic metals and precious metals, utilities, etc., with high growth or profit elasticity; third, high cost-effective companies with demand growth space, supply side clearance or imminent clearance, and competitive advantages in industries such as agriculture, forestry, animal husbandry, fishery, power equipment and new energy, basic chemical industries, etc. It is worth noting that at the end of April, there were rumors circulating in the market about "renowned fund manager Qiu Dongrong leaving." Many investors were concerned that if this news was true, it might bring considerable redemption risks to the products. On May 11, Zhonggeng Fund issued an announcement, announcing the appointment of additional fund managers for several of Qiu Dongrong's products. Specifically, Wu Chenggen was appointed as the fund manager for Zhonggeng Value Quality, Liu Sheng was appointed as the fund manager for Zhonggeng Value Leading, and Wu Chenggen was appointed for Zhonggeng Value Flexibility in 2020. Currently, only Zhonggeng Small Cap Value and Zhonggeng Hong Kong Stock Connect Value are managed independently by Qiu Dongrong.