China Evolution Equity Fund

Capital en riesgo. El rendimiento pasado no es un indicador fiable de los resultados actuales o futuros y no debe ser el único factor a tener en cuenta a la hora de seleccionar un producto o una estrategia.

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Descripción general

Manager's Outlook

We are positive on the outlook for Chinese equities in 2021 for three key reasons. First, China is expected to lead the recovery of Asia Pacific economies thanks to successful early control of the virus as many nations still struggle to emerge from the pandemic. Vaccine rollouts as well as the promotion of vaccine passports will likely accelerate the reopening of borders, providing a strong case for a pickup in economic activities. Second, the World Bank forecasts China's economy to expand by more than 8% in 2021, compared with 2.3% in the previous year, implying rapid expansion from multiple growth engines Third, despite being the world's second-largest economy, Chinese equities are still underrepresented in global indices. The equity market is poised to gain as the index weightings gradually normalize.

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In our view, China has done enough to successfully reflate its own economy. One consequence of China's early recovery is that expectations of fresh stimulus have been dampened. At the same time, there is no sign that the government will tighten policy prematurely. Rather, it appears to be taking a "wait and see" approach that could prevail for the next couple of quarters.

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The durability of the recovery in 2021 will require a shift in the sources of growth toward the consumer, including those consumer services that suffered most from the pandemic. The prospects for consumer demand look good: Auto sales, a key gauge of consumer confidence, ended last year above 2019 levels. Successive holidays and consumer festivals saw improving consumer confidence and pent-up demand. Residential property has rebounded, supported by a recovery in household income.

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The positive fundamental outlook for Chinese equities in 2021 is even more attractive in relative terms given the still uncertain outlook for many other economies, both developed and emerging. We expect the consumer to play a bigger role in driving China's economic growth next year.

Estrategia

Resumen del fondo

Nuestro enfoque se centra en descubrir empresas cuyos procesos de transformación y potencial de crecimiento están infravalorados o por descubrir. Aprovechando nuestro largo historial de inversiones en China, tratamos de identificar empresas innovadoras más allá de los valores de gran capitalización que ofrecen un potencial de crecimiento duradero o acelerado a largo plazo o una revalorización fundamental. El gestor no está limitado por el índice de referencia del fondo, que se utiliza únicamente a efectos de comparación de la rentabilidad.

Rentabilidad (después de comisiones)

Los resultados pasados no predicen rentabilidades futuras.

31-ene.-2022 - Wenli Zheng, Gestor de carteras,

La renta variable china arranco 2022 con mal pie ante la preocupación por la subida de los tipos de interés en Estados Unidos y las tensiones geopolíticas en Ucrania. Esto se sumó al temor a la desaceleración económica, las incertidumbres regulatorias y los brotes de coronavirus de China. En respuesta, el gobierno intensificó las medidas de flexibilización monetaria y afinó sus políticas para sanear el atribulado sector inmobiliario. En este contexto, el fondo se vio superado en rentabilidad por su índice de referencia debido a una desacertada selección de valores. También influyó negativamente el no estar invertidos en una plataforma de redes sociales, que se recuperó en bolsa después de tres trimestres consecutivos de caídas. Evitamos este valor al invertir fuera de este espacio de títulos populares de mega capitalización. Nuestra falta de exposición al sector financiero, también dominado por valores de gran capitalización, penalizó adicionalmente el comportamiento del fondo, al decantarse los inversores por los títulos orientados al valor en detrimento de los que tienen características de crecimiento. Nuestra sobreponderación del sector de la salud, que sufrió una recogida de beneficios, también detrajo rentabilidad, al igual que nuestra selección de valores en el mismo. Nuestra posición en una compañía biofarmacéutica restó valor, pero dada su cartera global de posibles fármacos, vemos potencial de revalorización conforme mejore la confianza de los inversores en el sector de salud. En cambio, nuestra sobreponderación y apuestas de valores en el sector inmobiliario influyeron positivamente en el comportamiento del fondo. También añadieron rentabilidad una gestora inmobiliaria de alta calidad y una promotora estatal, dos posiciones en cartera que consideramos ganadoras de cuota de mercado.

31-ene.-2022 - Wenli Zheng, Gestor de carteras,

Industriales y servicios empresariales era la mayor sobreponderación sectorial a finales de enero. Aquí, estamos invertidos en fabricantes de equipos eléctricos que, nuestro juicio, podrían beneficiarse de la transición ‘verde’ de China y de las perspectivas de un gran aumento de las inversiones en energías limpias. También deberían verse impulsadas por la tendencia a la electrificación de los vehículos. Estamos expuestos igualmente a un constructor naval bien gestionado en un sector que está entrando en una fase alcista del ciclo de actividad. Invertimos en un fabricante de herramientas para la construcción que vemos ganando cuota de mercado en un sector fragmentado. Recientemente, abrimos una posición en una empresa de transporte de mercancías, que ofrece servicios inteligentes de almacenamiento y transporte.

31-mar.-2021 - Wenli Zheng, Gestor de carteras,

We bought Shenzhen Megmeet Electrical, a supplier of industrial power sources, industrial automation products, and electric control products for smart home appliances. The firm has accelerated its production capacity expansion, R&D, and team building with the aim of realizing its 2025 revenue target of RMB 12 billion. We believe Megmeet new product launches are the start of a new chapter of long-term and steady growth for the company.
We bought Arctech Solar, which we view as a play on the solar theme as well as a penetration story. The company is a market leader in its field in China and one of the world's leading manufacturers and solution providers of solar tracking and racking systems. In our view, its differentiated technology and pricing power also gives the company lots of room to increase its penetration in the solar space.
We initiated a position in Yangzijiang Shipbuilding. We believe this is a value play on a global demand recovery; both shipping orders as well as the current idle fleet ratio are at record lows since the global financial crisis (GFC). Combined with a record-high freight rate, shipping lines could potentially accelerate their replacement processes and start a big order upswing cycle. Meanwhile, we believe the supply side has also improved tremendously after a decade-long consolidation process. With both strong demand and a disciplined supply, we could potentially be looking at one of the longest upswings since the GFC.
We bought Autel Intelligent Technology as a play on China's automotive aftermarket, which in our view has significant growth potential. The company is a leading supplier in China's high-profitability automotive intelligent diagnosis and detection industry. It launched a new product last year with a higher price point that is proving very popular, and further new product launches with large opportunity sets are anticipated. We also expect increased software revenue given requirements for updates post purchase.
We own a large position in JS Global Lifestyle, a leading producer of small household appliances, and continued to add to our exposure over the quarter. We believe that new product cycles, combined with deleveraging, can drive gains following several years of modest growth.
In contrast, we trimmed our position in Bafang Electric Suzhou, which is a leading manufacturer and distributor of electric bicycle driving components. During the quarter, we took advantage of share price strength to manage our exposure; however, we still find the business attractive long term given increasing penetration of e-bikes globally.

31-mar.-2021 - Wenli Zheng, Gestor de carteras,

Country Garden Services (CGS), one of China's leading property management companies, posted robust gains. The company reported a strong set of 2020 results and, more importantly, it provided a very bullish 2025 sales target that, in our view, implies�a six-fold increase in net profit over the next five years.
Shares of SITC International, a shipping logistics company, also made substantial returns. The company has benefited from favorable supply dynamics, which was reflected in solid 2020 earnings while the dividend payout surprised on the upside. We believe the company is run by a very high-quality management team with an excellent track record of capital allocation.
NARI Technology, a leading electrical equipment company that produces digital equipment that is used in China's grid, was another area of strength for the portfolio. During the review period, China's state-controlled power network operator the State Grid released a plan to achieve peak emissions and carbon neutrality. This confirmed our investment thesis, namely that Nari will be a main beneficiary as China shifts its focus to environmental efficiency.
However, those positives were offset to an extent by our position in Beijing Enterprise Urban Resources, an integrated waste management solution provider. The company listed last year amid high market expectations; however, preannounced 2020 numbers were below expectations and the stock price underdelivered.
Shares of JS Global Lifestyle, which specializes in small appliances such as blenders, rice cookers, and soymilk makers, rose significantly over the quarter. The company reported consensus-beating results, which were attributed to strong product momentum as well as optimization of the group's operational and supply chain efficiency.
Vipshop, which is the largest online apparel inventory clearance platform in China using a flash-sale model, added further value. An effective merchandising strategy and a steady expansion in its customer base have supported revenue growth, demonstrated by a solid set of fourth-quarter results.
Our position in HOPE Education, a leading private higher education provider in China, also boosted performance amid news of the company's commitment to ongoing mergers and acquisitions (M&A) activity. During the quarter, the company raised capital, earmarked for six domestic schools. HOPE's track record of acquisitions has so far been solid and prudent, in our view, as it tends to buy schools with smaller scale but with higher growth potential.
Shares of STAAR Surgical, the industry leader of the emerging refractive lens marketplace, registered solid gains. Myopia is a common issue in China. The mainstream method of treating it is with laser, but this is irreversible, while STAAR uses a reversible procedure, which is very popular in the country. During the review period, the company reported a good set of fourth-quarter results, which showed that its business has rebounded strongly from its initial COVID slump, with strength across all major markets.
Qingdao Haier Biomedical added further value. The company is independently run despite being part of the Haier Group state-owned enterprise, but it is benefiting from Haier Group's technology; for example, storage equipment for medical use. Qingdao Haier Biomedical is one of the few companies producing equipment for transporting the Pfizer vaccine.
However, our position in Shandong Weigao Group Medical Polymer, a medical device company, worked against the portfolio's performance. Pricing pressures for various business segments as well as industrywide concerns on price cuts held back the share price. However, the company continues to produce robust results, and we believe that its earnings will remain resilient in the face of potential policy changes given its diversified product offering.
Shares of Beijing Shunxin Agriculture, a market leader in China's attractive mass-market bajiu segment, fell sharply over the review period. Its shares pulled back, along with the white liquor industry, following strong share price performance. However, we still like the company as its distillery announced price adjustment plans; we think that the stock will benefit from this while still having room for further price hikes amid a recovery in consumption.
Despite reporting a good set of results, an improvement in its product mix, and profit delivery in a tough year, shares of Tsingtao Brewery fell over the review period. Instead, investors appeared to focus more on the risks from rising package costs and competition from other premium beer producers. We still like this leading Chinese brewery, which is a value play on the beer industry profit pool expansion thesis.

Fuente de datos de índice de referencia: MSCI. MSCI no formula declaraciones ni garantías, expresas o implícitas, y declina toda responsabilidad con respecto a cualesquiera datos de MSCI incluidos en este documento. Los datos de MSCI no podrán redistribuirse ni utilizarse de forma ulterior como fundamento para otros índices o cualesquiera valores o productos financieros. Este informe no ha sido autorizado, revisado ni elaborado por MSCI.

Fuente de rentabilidad: T. Rowe Price. La rentabilidad del fondo se calcula utilizando el valor liquidativo oficial con reinversión de dividendos, en su caso. El valor de una inversión y de cualquier renta que genere puede bajar al igual que subir. Los inversores podrían no recuperar el importe invertido. Se verá afectado por los cambios en el tipo de cambio entre la divisa base del fondo y la divisa de suscripción, si es diferente. Las comisiones de suscripción (hasta un máximo del 5% para la Clase A), impuestos y demás costes locales no se han deducido y en su caso se reducirán de las cifras de rentabilidad. La rentabilidad pasada no es un indicador fiable de rendimiento futuro. Los índices que se muestran no son índices de referencia formales. Se muestran únicamente a efectos comparativos.

Los datos de rentabilidad diaria se basan en el valor liquidativo disponible más reciente.

Los Fondos son subfondos del T. Rowe Price Funds SICAV, una sociedad de inversión de Luxemburgo con capital variable que está registrada ante la Commission de Surveillance du Secteur Financier, habilitada como organismo de inversión colectiva en valores mobiliarios (undertaking for collective investment in transferable securities, UCITS). Los detalles completos de los objetivos, las políticas y los riesgos de inversión se encuentran en el folleto que está disponible con los documentos de información clave en inglés y en una lengua oficial de las jurisdicciones en las que los Fondos estén registrados para la venta pública, junto con los estatutos y los informes semestrales y anuales (de manera conjunta, los «Documentos del fondo»). Toda decisión de invertir deberá basarse en los Documentos del Fondo, que pueden obtenerse de forma gratuita del representante local, el agente de información/agente de pagos local o los distribuidores autorizados. También se puede acceder a estos documentos así como a un resumen en inglés de los derechos de los inversores en www.troweprice.com. La sociedad gestora se reserva el derecho de rescindir los acuerdos de comercializacion.

La rentabilidad del fondo tiene un riesgo de alta volatilidad.

Los títulos específicos identificados y descritos en este informe no representan todos los títulos comprados, vendidos o recomendados para el subfondo SICAV y no se deben realizar suposiciones respecto a que los títulos identificados y analizados registraron o registrarán rentabilidad.

Se puede obtener una lista completa de las clases de acciones emitidas actualmente, incluyendo las categorías de distribución, con cobertura y acumulación, de forma gratuita y previa solicitud, en el domicilio social de la Sociedad.

Riesgos

Inversor típico