On October 22, Shi Cheng Managed Guotou Ruibin Jinbao Flexible Allocation Hybrid Fund released its third quarter report for 2024, becoming the first actively managed equity fund to disclose its third quarter report. The data shows that the fund experienced a slight net redemption in the third quarter, with total shares decreasing from 895 million to 861 million, and the equity position increasing by 92.77%. In terms of holdings, as of the end of the third quarter, the fund's major holdings were concentrated in sectors such as power equipment, non-ferrous metals, and new energy vehicles. The most significant change was in the adjustment of major holdings, with the fund replacing four of its top ten major holdings in the third quarter. DeYe Shares (605117.SH), Suntech Power (300274.SZ), BYD (002594.SZ), and Jinlang Technology (300763.SZ) entered the top ten, while Purui Lai (603659.SH), Tianqi Lithium (002466.SZ), Fluoride (002407.SZ), and Ganfeng Lithium (002460.SZ) exited the top ten. In addition, Shi Cheng significantly reduced its holdings in several stocks such as Yiwei Lithium Energy (300014.SZ), Ningde Times (300750.SZ), and Tianci materials (002709.SZ) in the third quarter. Shi Cheng stated in the third quarter report that the current core contradiction lies in the unmet demand for differentiated needs globally (with a focus on China, Asia, Africa, and half of Europe) and the ample supply of manufacturing capacity. Companies that innovate products and control channels will enjoy the greatest dividends in this process. If the industry becomes more prosperous, it will enter a time of cyclical performance. Investments in emerging industries in the field of equipment manufacturing require more time, as the pace of capacity expansion following the previous round will slow down. Overall, capital expenditure in manufacturing is currently at a relatively low point and is expected to recover in 1-2 years as profits in emerging industries improve. Shi Cheng mentioned that the destocking cycle in new energy applications has ended, and the restocking cycle has not yet started. The significant drop in prices will stimulate demand in the next 1-2 years. Demand for energy storage is expected to grow rapidly, driving growth in the new energy industry. The equalization of light storage will further stimulate the rapid growth of photovoltaics and energy storage installations. On the other hand, the globalization of automobiles will provide a stable foundation for growth, and China's continuously innovating automotive products are likely to undergo globalization in the coming years. The new cycle is expected to unfold in the order of applications-midstream-upstream. Shi Cheng stated that it remains relatively optimistic about this current upswing period. With the significant drop in product prices and the application of new technologies, the cost-effectiveness of products has greatly improved. The increase in unit consumption in end markets and the emergence of new application areas will bring about a new round of demand growth. However, the greatest risk lies in overseas political factors affecting expectations abroad. Regarding the TMT industry, Shi Cheng expressed optimism about continued investment in AI and the emergence of AI applications. The Scaling Laws have been widely recognized in the market, and the sustainability of AI capital expenditure is increasing. The development of scaling laws in the training process of reinforcement learning currently adheres to the development rules. Shi Cheng believes that investment in computing power will continue, and blockbuster applications are likely to emerge at some point in the future. In 2024, some sectors, such as new energy and TMT, have already shown a profit rebound. The acceleration of new demands in energy storage and heavy trucks is also on the horizon, and the market is optimistic that companies with growth potential can be realized in 2024-2025.