Alpha Call Episode 5 Live Review | Has the Middle East conflict created a golden buying opportunity? Long-term investment principles in turbulent times

Guest: Sheng Jin | Portfolio Director at Value Partners Group, 27 years of experience in insurance and asset management

Hosts: Richard Yu / Freya Sun | Futu Institutional and Private Wealth Team

After 'Correlation Tending to One,' is our investment framework wrong?

02:04 - 05:28

The core methodology can be summarized in eight words:Think from a higher perspective, act on a lower level.Use a telescope to assess whether long-term trends are disrupted and a magnifying glass to examine micro-level changes in industries and companies—extend the time horizon and ease short-term anxieties.

Weak dollar: Is it a long-term cycle or a short-term narrative?

11:29 - 13:38

A weaker dollar aligns with multiple US interests: easing debt pressure, ensuring Treasury continuity, and encouraging manufacturing reshoring.From a fundamental debt perspective,The long-term weakening of the dollar remains a high-probability trend.

Assessment: A weak dollar is the cornerstone of the revaluation of all assets.During the weak-dollar cycle, valuations in China and Hong Kong markets remain below historical averages, offering a clear comparative advantage over high-valuations in US equities.

What is the essence of AI? Why is it not "Internet 2.0"?

16:07 - 18:47

The essence of AI is productivity economics—creating value by accomplishing complex human tasks.

Computing power scale and efficiency represent the most significant barriers in the AI business model.Only by addressing the bottlenecks across the entire AI infrastructure chain can large models truly enhance productivity and reduce costs on the end side.

The Great Profit Migration in A-shares: With no improvement in the traditional economy, why has ROE stabilized?

25:16 - 27:19

The ROE of A-share listed companies has stabilized for three consecutive quarters. The reason lies in a qualitative change in the profit structure:

– The competitiveness of new economy manufacturing continues to improve, with an expanding contribution to profitability;

– The proportion of overseas revenue has shifted from quantitative to qualitative changes — overseas operations are growing rapidly, with overseas gross margins significantly higher than domestic ones.

Allocation conclusion: Triple focus on region, industry, and style

27:19 - 29:26

Value Partners is currently overweight on A-shares and Hong Kong stocks. South Korea was previously overweight but had realized profits and returned to benchmark allocation before the Spring Festival as valuations exceeded historical averages by six standard deviations.

three main threads:

– AI industry chain-related — bottlenecks across the entire computing power infrastructure chain

– Globalization 'going out' demand — leading manufacturers with increasing overseas revenue

– High-dividend robust assets — strong cash flow, industry barriers, excellent corporate governance, enjoying valuation premiums in volatile markets

Q&A Highlights

Q1: Apart from semiconductors, which industries in the Korean market benefit from the G2 landscape?

34:53 - 37:24

Take the transformer industry as an example — the US has restricted the use of Chinese transformers in high-end computing power data centers, resulting in South Korean companies securing a large number of orders.

Microsoft (MSFT.US) 、 $Meta Platforms (META.US)$ Major companies pay Korean firms in full upfront to secure delivery schedules three years out.

Q2: What does Wash's appointment as Fed Chair mean for the market?

41:15 - 44:05

Regardless of who becomes the Fed Chair, the chronic issue of US debt and bipartisan division are predetermined constraints.

The Fed Chair is inevitably walking a tightrope between independence and political pressure. The broader trend of a weak dollar cycle will not change due to a leadership transition.

Q3: Storage manufacturers collectively expanding Capex, will the market trend diverge?

44:56 - 46:50

This aligns with the general rule of cyclical industries:Supply-demand tension → full production expansion → supply release → price decline。The current profitability cycle in the storage industry is evolving towards its peak, with market consensus expecting the peak around 2027. When the second derivative of price increases begins to slow, it signals the need to manage risks and reduce positions at the top.

The above content was compiled by AI based on the live recording of the fifth Alpha Call session in April 2026.

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