Riyup Investment Chairman Wang Wen Reveals His Heavily Weighted Stocks and Discusses Five Major Stock Selection Criteria

AI · What policy dividends support the heavy holdings behind the financial sector?

Cailian Press, March 17th (Reporter Wu Yuqi) — On March 13th, the “Index Navigation, Gathering Strength to Move Forward” 2026 Spring Investment Strategy Conference, jointly hosted by China Merchants Securities, China Merchants Fund, and Cailian Press, was held in Shanghai. During the keynote speech session, Wang Wen, Chairman of Shenzhen Ridu Investment Management Co., Ltd., shared his views on the 2026 market environment, asset pricing logic, and key allocation directions under the theme “Eastern Winds Bring Spring.”

In his speech, Wang Wen continued his consistent value investing approach. Unlike market discussions focused on short-term style rotations and hot topics, he emphasized analyzing from valuation, cash flow, dividend capacity, and industry cycles to find assets with both safety margins and growth potential. He believes that investment opportunities in 2026 are not based on high valuation expansion but more on the recovery of undervalued assets and revaluation space driven by policy, capital, and industry changes.

Wang Wen’s market outlook mainly revolves around several main themes: maintaining a low valuation stock selection framework, optimistic about the long-term space of capital markets under the background of a strong financial nation, and focusing on sectors such as finance, internet, energy, metals, and pharmaceuticals. Overall, Wang Wen holds a relatively positive attitude toward the 2026 market, but this optimism is not simply based on emotional uplift but on low valuations, increased policy support, and expectations of fundamental improvements in certain industries.

Chairman Wang Wen of Ridu Investment

Low valuation remains the core starting point, with value investing logic贯穿 in stock selection and allocation

Wang Wen first mentioned that his focus is not on a short-term hot trading clue but on value investing itself. He stated that, although subjective bullishness faces pressure from ETF and quantitative strategies, it still has its value. Truly excellent investment managers can deliver returns different from passive tools to their clients. The premise behind this is to adhere to value investing and integrate this approach into daily research and investment practices.

Specifically, Wang Wen listed five major stock selection criteria: low valuation, high cash flow, high dividends, long-term business sustainability, and “having a dream.” He believes that investment first needs to address whether the purchase price is cheap enough; low valuation is the starting point for long-term returns, while cash flow, dividend capacity, and business sustainability determine whether a company can withstand industry cycles.

Among these five standards, low valuation remains the most fundamental. Wang Wen repeatedly emphasizes that the source of investment returns primarily depends on whether the purchase price is sufficiently cheap. For him, valuation is not just a simple number comparison but a direct reflection of safety margins. Over the past few years, the market has long chased high prosperity and high imagination sectors, with many companies being overly optimistic at high valuations. But as market conditions change, such pricing methods have undergone repeated corrections. Compared to that, undervalued assets, while not always the most popular in the short term, often imply lower downside risk and are easier to release potential during recovery phases.

This framework is not static valuation alone. Alongside low valuation, Wang Wen places great importance on cash flow. He considers cash flow one of the most critical indicators of a company’s operations, as it relates to the company’s genuine ability to generate internal funds and determines whether it can maintain resilience amid industry competition, capital expenditure, and external environment changes. In the current AI investment boom, he emphasizes balancing投入与回报. He believes that if a leading company can maintain steady progress during a new technology cycle while also engaging in buybacks, dividends, and maintaining financial discipline, this capability itself indicates quality.

High dividends are the third screening criterion in his stock selection framework. Dividends are not just about financial returns but also reflect corporate governance and shareholder awareness. Compared to companies that continuously raise funds and expand but delay sharing profits with shareholders, he prefers companies with strong capital distribution willingness and a willingness to share operational results. Extending this, he further emphasizes long-term business sustainability, clearly stating to avoid industries in decline or lacking long-term vitality.

However, merely having low valuation, high cash flow, and high dividends is not enough for a complete investment logic. Wang Wen stresses that the business must have long-term sustainability. He does not agree with simply buying seemingly cheap companies in industries that are already in decline, as such low valuations often reflect risks rather than opportunities. Truly worthy assets should be in industries capable of持续经营 and creating value, with companies possessing strong competitiveness that can maintain profitability and market position over the long term.

In other words, low valuation is not about “picking up cigarette butts” but requires companies to be cheap while also having stable cash flow, reasonable dividends, ongoing operational capacity, and growth potential for excess returns.

Beyond these four standards, “having a dream” is a more subjective and active part of Wang Wen’s stock selection framework. He believes that the significance of subjective bulls and private equity is not just to achieve average market returns but to pursue higher excess returns under the premise of risk control.

Therefore, the companies in his portfolio should not be mediocre but should have the potential for significant future appreciation, truly driving portfolio gains. This does not mean taking risks beyond safety margins; rather, it is about pursuing more returns on the basis of “not losing money and standing firm,” so that the entire portfolio can withstand volatility while maintaining an offensive capacity for growth.

Financial sector as a heavy holding, backed by a focus on recovery, revaluation, and institutional dividends

In terms of industry allocation, the financial sector is undoubtedly Wang Wen’s most prominent expression. He clearly states that he is heavily invested in finance, viewing insurance, banks, and securities firms as the most promising directions in the near future. The core reasoning is straightforward: first, valuations in the financial industry are still low; second, the operating environment is changing; third, the market’s long-term valuation of these sectors is still insufficient.

Regarding insurance, he pays more attention to both asset side and liability side improvements. On the asset side, there is still room for enhancement in equity allocations; on the liability side, the downward shift of product cost centers may gradually ease pressures. If A-shares enter a longer-term slow bull market, insurance companies, with their capital attributes and asset allocation capabilities, could benefit over a longer horizon. The current low valuation levels also strengthen this logic.

His view on banks is more related to the correction of real estate-related bad debt expectations. Wang Wen believes that the market’s long-term low valuation of banks largely reflects concerns over non-performing risks related to real estate. As real estate gradually recovers and expectations improve, provisions and bad debt pressures are expected to ease, leading to valuation repair. In other words, he does not see banks as purely high-dividend assets but as part of the macro recovery chain, with potential revaluation as a pro-cyclical financial asset.

Securities firms are even more undervalued but have more resilience and are worth paying attention to. He states that he is one of the few investors optimistic about securities companies. The basis is that China’s wealth structure is still evolving toward securitization, financialization, and wealth management, which offers further expansion opportunities for securities firms’业务边界, industry concentration, and capital market service capabilities.

Currently, the overall valuation of securities firms is not high, and market expectations for industry consolidation, wealth management transformation, and business expansion in a long bull environment are not fully reflected in prices. Therefore, in his framework, finance is not a traditional defensive allocation but an important main line with both trend and undervaluation characteristics.

This view is supported by his ongoing关注政策与制度环境变化. From active capital markets and a strong financial nation to investor-centric policies, and interpretations of “strong currency,” “strong central bank,” “strong financial institutions,” and “strong international financial centers,” Wang Wen aims to illustrate that the financial system’s role in economic operation is being reinforced, which will also be reflected in capital market and financial asset pricing.

Based on this understanding, he remains confident in the long-term revaluation of RMB assets. With a large trade surplus and China’s manufacturing competitiveness, RMB assets have significant upside potential, and RMB appreciation will be an important variable in boosting market confidence and attracting global capital to Chinese assets. He believes that currently, the proportion of global allocations to Chinese assets is not high, but if RMB appreciation trends further clarify, China’s quality assets could attract more external funds.

Not chasing high power, nor avoiding growth—finding opportunities in “wealth, health, and fun”

Although most of his emphasis is on the financial sector, Wang Wen’s portfolio is not limited to a single direction. From his statements, current allocations mainly revolve around three main themes: “wealth,” “health,” and “fun,” corresponding to wealth management, healthcare, and industries that bring enjoyment and emotional value. This seemingly emotional summary actually follows a long-term demand, clear industry space, and relatively reasonable valuation logic.

For example, in internet giants, he does not see aggressive AI investment as the only correct approach. Instead, he values whether companies can maintain steady capital expenditure, continue buybacks, and keep dividends during AI transformation. Under this logic, internet platforms are not passive assets missing the AI wave but can leverage existing ecosystems, cash flow, and capital allocation to achieve more sustainable returns during the new technology cycle.

Energy, metals, and pharmaceuticals form another part of the portfolio. Wang Wen mentions that these allocations are related to extending the AI产业链, and also reflect his approach of “not directly追逐高波动算力标的 but participating in growth more稳健的方式.” This aligns with his consistent style of starting from cheap valuations, gradually entering after long industry adjustments, and waiting for industry prosperity and corporate earnings to rebound, thus capturing both valuation recovery and earnings growth.

At a higher level, Wang Wen’s core outlook for 2026 remains that “this year is a very good year.” He sees the current macroeconomic recovery from lows, the marginal stabilization of real estate, and the overall market position, industry trends, and residents’ capital behavior as being in a relatively favorable stage.

Especially, he believes that the large-scale participation of retail funds in the stock market has not yet fully arrived, meaning the market has not reached the end of emotional euphoria but is closer to the middle or early stage of a bull market. Therefore, although his portfolio emphasizes prudence, it is not conservative but maintains some offensive stance between safety margins and industry trends.

The guiding principle throughout this approach is the repeatedly emphasized “investment is a practice.” This is not just an abstract statement but a reflection of the most practical aspect of value investing: the real challenge is not knowing what a good company is but holding the portfolio through volatility, disagreements, and long waits, and sticking to the method.

Wang Wen’s optimism for 2026 is neither based on linear extrapolation of hot topics nor on simple short-term sentiment bets. Instead, he attempts to integrate valuation principles, industry comparisons, market cycles, and policy environment into a unified framework, seeking assets that can both safeguard the bottom line and open up gains during recovery and revaluation.

(Reporter Wu Yuqi, Cailian Press)