China’s value investing landscape has evolved into a unique and dynamic ecosystem, shaped by global principles and deeply rooted in local market realities. While inspired by Western pioneers like Benjamin Graham and Warren Buffett, Chinese value investors have developed distinct methodologies that reflect the country’s economic structure, policy environment, and cultural ethos. This article explores the core philosophies, landmark investments, and localized strategies of China’s most influential value investors—spanning generations and sectors.
First-Generation Pioneers of Value Investing
Zhang Lei: Long-Termism and Value Creation
Zhang Lei, founder of Hillhouse Capital, champions long-termism as the cornerstone of investment success. His philosophy blends Graham’s margin of safety with Philip Fisher’s growth-at-a-reasonable-price approach, forming a “dumbbell strategy” that simultaneously targets technological innovation and consumer upgrade trends.
His early investment in Tencent in 2005—viewed not just as a social media company but as digital infrastructure—yielded over 300x returns after two decades. In 2020, he took a bold position in Longi Green Energy at 70 RMB per share, maintaining conviction despite short-term industry headwinds in 2025 due to overcapacity. He remains bullish on solar energy’s long-term displacement potential.
👉 Discover how long-term strategic thinking drives market-beating returns.
Zhang’s 2025 moves into AI ecosystems—through companies like Inspur Information and Runhe Software—highlight his forward-looking integration of computing power, data, and application layers. His book Value articulates a vision where capital serves not just financial return, but societal progress through enterprise empowerment.
Duan Yongping: Rationalism and the Circle of Competence
Duan Yongping emphasizes simplicity: “Buying stocks is buying businesses.” He strictly adheres to his circle of competence, concentrating over 80% of his portfolio in a few high-conviction names. His hierarchy of analysis prioritizes business model > management quality > price.
His Apple investment since 2011—driven by understanding its ecosystem strength and cash flow resilience—delivered more than 10x returns. He similarly recognized early potential in Pinduoduo’s social commerce model, capturing over 500% gains during its growth phase.
In 2025, Duan increased stakes in Microsoft and NVIDIA, viewing AI as a transformative force reshaping global tech competition. His Zen-like decision-making reduces investing to an arithmetic principle: “Buy $1 bills for 40 cents,” focusing on intrinsic value versus emotional market swings.
Mid-Generation Anchors of Value Investing
Qiu Guolu: Contrarian Thinking and Common-Sense Investing
Qiu Guolu, former CEO of Gopher Asset Management, advocates the “Three Good Principles”: good industry, good company, good price. His contrarian mindset shines brightest during market panics.
During the 2013 liquor scandal, when sentiment crushed premium baijiu stocks, Qiu bought茅台 (Kweichow Moutai) and Wuliangye based on their addictive consumption patterns and unshakable brand moats—achieving over 10x returns in ten years.
In 2025, he positioned in Xiaomi and SMIC, betting on China’s semiconductor self-reliance driven by both technological advancement and state support. His framework outlined in The Simplest Things in Investing combines low valuation with high barriers to entry.
Qiu’s “Four Cycles and Three Levers” model—analyzing policy, market, economic, and earnings cycles alongside financial, operational, and valuation leverage—has become a benchmark for systematic risk assessment.
Li Lu: Civilizational Perspective and Institutional Arbitrage
Li Lu elevates value investing to a historical narrative, framing modernization as the ultimate source of value creation. Drawing from Charlie Munger’s multidisciplinary thinking, he identifies opportunities at the intersection of structural reform and institutional change.
His 2002 investment in BYD was predicated on foresight about China’s energy transition and electric vehicle revolution—returns exceeding 300x over two decades. This success directly influenced Warren Buffett’s entry into BYD.
In 2020, Li invested heavily in Postal Savings Bank of China (H-share) at HK$4.20, capitalizing on financial liberalization and inclusive finance policies—delivering over 60% returns within a year.
He introduced the concept of early capture of institutional dividends, arguing that China’s “policy-driven market” offers unique alpha for patient investors who understand regulatory direction.
Sector Specialists and Strategic Innovators
Dong Baonian: Banking Sector Revival and Value Recovery
Dong Baonian focuses on deeply undervalued sectors using an industrial mindset to interpret financials. He believes bank valuations in the past reflected excessive fear about bad loans rather than reality.
Starting in 2017, he built large positions in Chinese banks. When sector sentiment improved in 2023, his portfolio surged over 200%. He also executed a sophisticated hedge during the 2012 Moutai crisis—pairing stock ownership with liquor futures—to achieve over 30% annualized returns.
His theory of ideological correction posits that mispricing in China’s banking sector stems from foreign investors’ misunderstanding of state-backed risk absorption mechanisms—a gap that narrows with policy clarity.
Deng Xiaofeng: Cyclical Growth and Supply-Demand Imbalance
Deng Xiaofeng identifies growth within cyclical industries, focusing on sectors where supply constraints meet rising demand. At High-Flyer Fund Management, he leverages deep supply chain intelligence.
His investment in Zijin Mining in 2019—at under 3 RMB per share—combined low-cost acquisition strategy with rising copper prices. Over five years, the stock returned over 400%, generating nearly 10 billion RMB in unrealized gains.
In 2025, he entered TCL Tech and BOE A-share, seeing panel industry consolidation creating oligopolistic stability. His “cyclical growth” concept redefines how investors assess maturity-phase industries through technological upgrading lenses.
👉 Learn how data-driven insights unlock hidden market opportunities.
Next-Generation Value Investors
Chen Guangming: From Sector Rotation to Deep Value
Chen Guangming transitioned from tactical sector rotation to deep value investing, emphasizing sustainable earnings quality over timing. As founder of Fullgoal Fund Management, he prioritizes ROE consistency and governance standards.
His early advocacy for Wanhua Chemical—based on its MDI monopoly and technical moat—generated over 10x returns in seven years. The Fullgoal Growth Value Fund focuses on consumer staples and healthcare, delivering consistent returns via high-quality compounders.
He promotes value-for-money investing: favor companies with high certainty of earnings growth at fair valuations—not just cheap stocks or popular growth names.
Zhu Renwei: Niche Contrarianism and ESG Integration
Zhu Renwei targets overlooked niches where innovation meets policy tailwinds. In 2021, he went overweight on CATL and Longi Green Energy amid carbon neutrality momentum—achieving fund-level returns exceeding 300% that year.
He also ventured into cultural investment, co-producing films like The Path of Deng Xiaoping, aligning social impact with financial return through policy-supported content.
A pioneer in integrating ESG factors into valuation models, Zhu argues that sustainability is not ethical window-dressing but a core component of long-term enterprise value.
The Localization of Value Investing in China
Shared Core Principles
Despite diverse styles, top Chinese value investors share key traits:
- Deep fundamental research: On-the-ground supply chain checks, management interviews, and industry immersion.
- Contrarian courage: Acting decisively when fear dominates—e.g., buying banks during NPL fears or AI during tech selloffs.
- Long holding periods: Average tenure of 5–10 years; Li Lu held BYD for over two decades.
Distinctly Chinese Characteristics
- Policy sensitivity: Strategic alignment with national priorities—semiconductors under "Made in China 2025," EVs under carbon neutrality.
- Institutional arbitrage: Exploiting structural shifts like share reform or registration-based IPOs.
- Cultural synthesis: Blending Confucian ethics (“righteousness alongside profit”) with modern finance—Wang Guoqin advocates investing that creates both economic and social value.
How to Apply These Lessons: A Practical Guide
Study Foundational Texts
- Zhang Lei’s Value: Understand long-term capital as a force for industrial transformation.
- Qiu Guolu’s The Simplest Things in Investing: Master contrarian frameworks.
- Li Lu’s Civilization, Modernization, Value Investing and China: See investing as part of national development.
Build Your Investment Process
- Define your circle of competence (e.g., consumer goods, healthcare).
- Use valuation tools: DCF models, P/E-PB percentiles, PEG ratios.
- Balance portfolios dynamically—reduce exposure when overvalued; add during downturns.
- Limit single-sector exposure to ≤30%; maintain 50–70% equity in bear markets.
Leverage Research Tools
Utilize platforms like Wind and Xueqiu for data tracking. Attend shareholder meetings and industry forums to gather edge insights directly from executives and suppliers.
Frequently Asked Questions
Q: Is value investing still effective in China’s volatile stock market?
A: Yes—volatility creates mispricing opportunities. Investors like Zhang Lei and Dong Baonian have proven that disciplined valuation analysis leads to outperformance over time.
Q: How do Chinese value investors handle government policy risks?
A: They view policy not as risk but as signal. Leaders like Qiu Guolu and Li Lu actively monitor policy direction to anticipate structural shifts before they’re priced in.
Q: Can retail investors replicate these strategies?
A: Absolutely—with focus. Start small within your knowledge domain, prioritize quality businesses at reasonable prices, and avoid emotional trading.
Q: What role does ESG play in Chinese value investing?
A: Increasingly central. Zhu Renwei and others treat ESG metrics as indicators of management quality and long-term resilience—not just compliance items.
Q: How important is holding period for success?
A: Critical. Compounding works only with time. Most top investors hold for 5+ years to allow value realization and business evolution.
👉 Start applying these proven strategies with tools built for modern investors.