As the third-quarter financial reports from publicly listed companies begin to unfold, a trend emerges revealing the top-performing stocks unearthed by savvy fund managers during the third quarterThe latest disclosures, particularly through October 28, highlight remarkable growth potentials and noteworthy holdings that could point to significant returns for investors.

Among these standout performers, Changying Precision has reported an astonishing increase in its net profit attributable to its shareholders, reaching 594 million RMB with an impressive year-on-year surged profit growth of 38,159.10%. This significant upward trajectory has caught the attention of investment funds, as evidenced by the holdings managed by Chen Ying, which consist of three products under the Jin Ying technology innovation umbrella, totaling 9.7 million shares of Changying Precision.

Other companies have also demonstrated remarkable growth

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For instance, Shengyi Electronics recorded a 115.04% increase in stock price during the third quarter, alongside a staggering 1,156.98% year-on-year profit growth attributable to its shareholdersThis remarkable shift prompted notable fund managers, including Jin Zicai from Caitong Fund and Wu Yudi from Wanji Fund, to strategically position their portfolios to capitalize on these growth opportunities.

Uncovering Big Winners

The third-quarter earnings season commenced with the announcement from Jian Yuan Trust on October 9, 2024, setting the stage for what has become a peak period of disclosuresBy the end of October, a total of 2,769 companies had unveiled their financial results for the third quarter, revealing a diverse landscape of initial insights into corporate performance.

Among the disclosers, Ping An Insurance emerged as the leader in net profit, boasting an astonishing 119.182 billion RMB which marked a 36.1% growth year-on-year for the first three quarters

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Other giants like China National Offshore Oil Corporation (CNOOC) and China Mobile also reported profits surpassing 100 billion RMB during the same period, showcasing the vigor of the market and sound fundamentals behind many Chinese corporations.

The standout indication of revenue growth in the third quarter has unquestionably been Changying Precision, leading the pack in substantial profit increaseIn contrast, companies like Changchuan Technology, ZhiTian New Materials, and Baomo Coalso reported mind-boggling profit margins exceeding 10,000%. These performance-laden companies have become prime targets for investment funds seeking to leverage their soaring profitability.

Statistics reveal a collective affection from fund companies towards these high-performing stocks, with many firms having laid groundwork prior to these disclosuresHistorically, top-quality, well-respected stocks, often dubbed "white horse stocks" in investment parlance, have garnered a reputation for being solid long-term holds

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A report by Wind indicated that as of the end of Q3, 117 fund companies are holding Ping An sharesA staggering 66 firms have staked their interests in CNOOC, while 79 are involved with China Mobile.

Companies with fast-growing net profits have similarly drawn attention from the investment communityJin Ying Fund, Huaxia Fund, and Southern Fund are among the eight firms that collectively hold tens of millions in Changying Precision stocksThe most considerable stake comes from Jin Ying Fund, with a total of 9.7 million shares attributed to Chen Ying’s trio of managed productsChangchuan Technology also captured the attention of 30 fund companies, with Xin Dai Ao Ya Fund leading in terms of significant holdings.

Diverging Strategies

Despite positive earnings, differing strategies can be observed among fund managers regarding these high-performing stocks

• Calculating the Economics of Urban Renewal
• The Future of Oil Stocks and Currency Markets
• Decoding the 1% Risk Rule
• Urban Planning Adapts to New Economic Drivers
• The Strengthening Trend of the Dollar

For example, while Chen Ying reduced his holdings in Changying Precision, Zhang Chengyuan from Huaxia Fund chose to maintain their stake without any alterationsIn addition, new entrants like Jin Yuan Shun An Fund and Xinhua Fund have emerged in the investor lineup since Q3.

Similarly, while Feng Mingyuan from Xinda Ao Ya increased his holdings of Changchuan Technology, several fund managers, including Jin Xin Fund and Shen Wan Lingxin Fund, reduced their stakes during the third quarterThis dichotomy raises questions about the future valuation of these stocks as market conditions evolve.

The same inconsistent approach can be observed with Shengyi Electronics, where Wang Peng from Manulife has reduced positions across multiple fundsConversely, Jin Zicai and Wu Yudi have initiated positions in Shengyi Electronics during Q3, shedding light on the varied approaches to asset management evident in the market.

Concentration on Fundamentals

With each passing disclosure, fund managers are honing in on the fundamentals of listed companies

Fund giant Fuguo Fund has opined that industries and companies exceeding performance expectations may yield superior returnsHowever, they caution that the underlying policies will serve as crucial indicators going forward, emphasizing the importance of strategic policy follow-up in relation to the prospect of fundamental recovery and ongoing performance sustainment.

Meanwhile, Bosera Fund highlighted the current market's stability and wide fluctuations, awaiting risk assessments and vital signalsWith market risk appetite showing clear signs of recovery, they advocate maintaining an optimistic perspective, underscoring the importance of seizing structural opportunities, particularly in cyclical sectors that benefit from government support.

Fuguo Fund advised a triangular allocation strategy amidst the contest between profitability, interest rates, and policy directionsThey recommend concentrating on supply-side improvements linked to economic growth and spotlight industries benefiting from new cycles, like consumer electronics and semiconductor sectors