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China’s biggest fund manager with 87 per cent gains picks market laggard and rival to Foshan Haitian as winning recipe

  • Zhang Kun, who oversees the largest sum among China’s mutual fund managers, has spent US$459 million this year on food-seasoning maker Jonjee
  • He cuts holdings of liquor producer Sichuan Swellfun in sign star fund managers are getting out of ‘bubble stocks’

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Jonjee’s headquarters in Zhongshan, Guangdong province. The firm produces food seasoning from soybean sauce to edible oil and chicken essence. Photo: Handout
Zhang Shidong

Zhang Kun, who manages US$18.4 billion in assets as China’s biggest money manager at E-Fund Management, has been building up a substantial stake in Jonjee Hi-Tech Industrial and Commercial Holding as a winning recipe for his market-beating funds.

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This year alone, Zhang’s three equity mutual funds have spent 3 billion yuan (US$459 million) on picking up 53.5 million shares in Jonjee from the market, according to the company’s latest shareholding data. These purchases have increased his overall stake to 74 million shares, or 9.3 per cent of the company’s capital base, as of April 1.
Jonjee, based inZhongshan in China’s southern Guangdong province, produces food seasoning ranging from soybean sauce to edible oils and chicken essence, having transformed itself from an obscure business of developing industrial development zones since it went public in 1995.

Zhang, who is himself based in the provincial capital of Guangzhou, could not be reached for comment. The stock’s attraction may lie in its valuation, which has lagged behind market leader Foshan Haitian Flavouring & Food for the past year.

“The company’s business is stable and healthy,” said Zhang Yuguang, an analyst at Kaiyuan Securities. “And its current valuation has fallen to a level that is worth buying.”

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Jonjee aims to achieve 11 per cent profit growth this year on top of a 24 per cent increase in 2020, according to its annual results. The stock is valued at 43 times projected earnings, compared with the multiple of 71 times for Foshan Haitian, China’s biggest food-seasoning producer.

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