Yang Dong, the helmsman of private equity giant Ningquan Assets, is known for his "contrarian investment", and the information disclosed by the Hong Kong Stock Exchange shows that Ningquan Assets raised the Hong Kong stock property leader Country Garden Services (06098) for the first time on February 14, with a shareholding ratio of more than 5%. At the same time, it has intensively increased its holdings in 10 Hong Kong-listed companies such as Vanke Enterprise (02202), Xinte Energy (01799), and Xinyi Energy (03868) during the year, covering real estate, energy, communications and other industries.

In the context of intensified volatility in the Hong Kong stock market, Yang Dong's layout logic and market prediction have become the focus.

Raise the brand Country Garden Service: Bucking the trend to buy the bottom of the property leader, optimistic about the long-term value

On February 14, Ningquan Assets increased its holdings of 900,000 shares of Country Garden Services at a price of HK$5.13 per share, costing about HK$4.617 million, with a total shareholding ratio of 5.02%, triggering the first listing. After this increase, the market value of Ningquan Asset's shareholding in Country Garden Services reached HK$1.03 billion.

As a leader in the domestic property management industry, Country Garden Services' market value exceeded HK$200 billion in 2021, but its performance has been under pressure in recent years due to the downturn in the real estate industry and the drag of its parent company, Country Garden. In the first half of 2024, the company's revenue increased by 1.5% year-on-year, but net profit fell by 38.7% year-on-year. As of March 2025, its share price has shrunk by more than 90% from its peak.

Although the market doubted its prospects, Yang Dong chose to increase his position against the trend. According to the analysis, Country Garden Services has recently optimized its structure through the sale of assets (such as the sale of Zhuhai Wanda's equity in September 2024 to withdraw 3.79 billion yuan), and plans to implement share repurchase and equity incentives, releasing positive signals. Ningquan Assets said in the monthly report that the current stock price has reflected excessive pessimistic expectations, and it is expected to rebound with the recovery of the industry in the future. Ningquan Asset Management believes that the current valuation of Hong Kong stocks is at a historical low, and the stock prices of some industries (such as real estate and property management) have reflected excessive pessimistic expectations. Country Garden Services' current price-to-earnings (PE) ratio is less than 10 times, far below the industry average.

Country Garden Services' share price rebounded significantly after Ningquan Assets increased its holdings, rising by more than 10% in a single month in February, closing at HK$6.13 per share on March 3 and HK$5.97 per share on March 4, with a total market value of HK$20.5 billion. This move is also seen as a signal for private placements to buy the bottom of low-valued assets in Hong Kong stocks.

Investment strategy: focus on structural opportunities and lay out the dual main lines of "undervaluation + growth".

According to Ningquan Asset's monthly investment report in January 2025, its top five holding industries are real estate, basic chemicals, communications, power equipment, and public utilities, with an equity asset allocation ratio of nearly 50%. Yang Dong believes that despite the market volatility at the beginning of 2025, equity assets are still a "pretty good choice" for mainland funds, and the slow bull market needs to gradually emerge through phased adjustments.

In addition to Country Garden Services, Ningquan Assets also increased its holdings in Vanke Enterprise and COFCO Jiakang (01610), betting on the increase in concentration after the industry was cleared. The logic lies in the fact that under the easing of real estate policies and the promotion of guaranteed delivery, the long-term demand of the property management industry is stable, while leading enterprises are more resilient by virtue of scale effect and brand advantages.

In terms of energy transition, new energy companies such as Xinte Energy and Xinyi Energy have also been given key positions. Yang Dong believes that under the policy support and technology iteration of the new energy industry, the future growth space is clear, especially in the field of clean energy such as photovoltaic and wind power. In terms of communications and utilities, targets such as China General Number (688009/03969) and Xintian Green Energy (00956) were included in the portfolio to balance the volatility of the portfolio. The communications sector benefits from the acceleration of 5G infrastructure, while the utilities sector (e.g., power, water) has stable cash flows and is suitable as a defensive allocation.

The reason why Yang Dong is known to the outside world is because he rarely publicly persuaded the people to redeem when the Shanghai Composite Index soared to 6,000 points in 2007, bluntly talking about the risk of market bubbles; In 2015, after the A-share market stood at 4,400 points, it once again warned that the bubble could trigger a crisis, and even predicted that the intensity of the adjustment may exceed the 2008 financial crisis. These two warnings have made it known as the "conscience of the industry". Yang Dong recently said that "the market is only in the continuous ups and downs, and the silhouette of the slow bull will be hidden in it", and Hong Kong stocks have become the focus of layout due to low valuation, high liquidity and policy support.

According to the data, in February 2025, the net purchase of Hong Kong stocks by southbound funds reached HK $152.8 billion, a new high in the past four years.

Yang Dong's intensive actions are not only an optimistic prediction of the valuation repair of Hong Kong stocks, but also a reflection of the initiative of private equity institutions in a complex market environment. With the gradual emergence of policy effects and the improvement of corporate earnings, the outline of the "slow bull" of Hong Kong stocks may gradually become clear, and the dual logic of "undervaluation + growth" may become the main line in the future. Investors need to pay attention to structural opportunities in the market and be wary of short-term volatility risks.