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10 Chinese Stocks Billionaires Are Loading Up On

In this article, we discuss 10 Chinese stocks that billionaires are buying. If you want to see more stocks in this selection, check out 5 Chinese Stocks Billionaires Are Loading Up On

The economy of Asia and the Pacific stands out positively amid the global economy’s uncertain recovery. The International Monetary Fund predicts that this region will contribute approximately 70% of the world’s economic growth this year, a significant increase as compared to previous years. It is expected that the growth rate in Asia and the Pacific will increase to 4.6% in 2023, up from 3.8% last year. As per IMF, the primary factor contributing to this development is the reopening of China, which has led to a surge in consumption and subsequently boosted economic growth throughout the region. This positive trend continues to shine, despite weaker demand from other parts of the world. 

However, there are potential threats to this outlook, such as the spillover effects from the unexpected tightening of US monetary policy and disruptions in the supply chain due to geopolitical tensions. The IMF also noted that going forward, the Chinese economy, which has long played a crucial role in driving regional and global growth, is projected to experience a substantial deceleration due to unfavorable demographic conditions and declining productivity. To secure sustained growth in the long run, the region should give priority to enacting structural reforms, fostering innovation and digitalization, and accelerating the shift towards renewable energy sources, per the IMF. 

China Briefing recently discussed official economic data by National Bureau of Statistics (NBS) for the first quarter of 2023, which was published on April 18. The data showed that China’s economic recovery is moving along well after the country lifted some of the strictest COVID-19 restrictions near the end of 2022. Q1 2023 gross domestic product indicated a growth rate of 4.5%, exceeding both the 4% growth forecast by Wind, a Chinese data provider, and the expectations of economists surveyed by Reuters. This growth rate also represented the largest expansion of China’s economy since Q1 2022. In 2022, China’s GDP increased only by 3%, missing the official growth target of “around 5.5 percent”. The unexpectedly strong GDP growth in the first quarter of 2023, paired with the surprising double-digit growth in exports and retail sales in March, has generated optimism in the markets regarding China’s economic recovery.

According to a private sector survey cited by Reuters, China’s factory activity unexpectedly rebounded in May. This turnaround was supported by improvements in production and demand, offering relief for companies struggling with declining profits. China’s recovery from the uncompromising COVID-19 restrictions has been precarious and uneven, as demonstrated by a slump in imports, factory gate prices, and property investment during April 2023. However, the manufacturing subindexes disclosed that factory output experienced its quickest expansion in 11 months, and new orders, as well as new exports, also rose in May. Despite these positive developments, business confidence for the next 12 months dropped to a seven-month low due to concerns about the global economic outlook. Zhou Hao, an economist at Guotai Junan International, expressed the following in a written statement: 

“We need more time to see whether the improvement would be sustained, but it is a piece of good news for the Chinese economy. Further policy support is still required to boost domestic demand, we reckon a 10 bps MLF rate cut in June.”

Amid the significant economic activity taking place in the region, billionaires, eager to capitalize on profitable investments, are actively loading up on Chinese stocks. In the first quarter of 2023, some of the notable Chinese stocks favored by billionaires include Alibaba Group Holding Limited (NYSE:BABA), JD.com, Inc. (NASDAQ:JD), and PDD Holdings Inc. (NASDAQ:PDD).

Our Methodology 

Insider Monkey tracks billionaire-owned stocks and in this article, we selected the Chinese stocks that attracted the highest number of billionaire investors during the first quarter of 2023. We have also mentioned the overall hedge fund sentiment towards each stock as of Q1 2023. 

Chinese Stocks Billionaires Are Loading Up On

10. KE Holdings Inc. (NYSE:BEKE)

Number of Hedge Fund Holders: 39

No. of Billionaire Investors: 9

KE Holdings Inc. (NYSE:BEKE), a company based in Beijing, China, operates a comprehensive platform for housing transactions and services. KE Holdings Inc. (NYSE:BEKE) operates through four main divisions – Existing Home Transaction Services, New Home Transaction Services, Home Renovation and Furnishing, and Emerging and Other Services. KE Holdings Inc. (NYSE:BEKE) stock was found in 9 billionaire portfolios as of Q1 2023. 

On May 18, KE Holdings Inc. (NYSE:BEKE) reported a Q1 non-GAAP EPADS of $0.43 and a revenue of $2.95 billion, outperforming Wall Street estimates by $0.18 and $410 million, respectively. Revenue over the period climbed 61.6% on a year-over-year basis.  

New Street initiated coverage of KE Holdings Inc. (NYSE:BEKE) on May 9 with a Buy rating and a $22 price target. They informed investors that the company’s ability to acquire more shares after the pandemic may have a lasting impact and positive prospects.

According to Insider Monkey’s first quarter database, 39 hedge funds were bullish on KE Holdings Inc. (NYSE:BEKE), with collective stakes worth $1.76 billion. Lei Zhang’s Hillhouse Capital Management is the largest stakeholder of the company, with 31.2 million shares worth $588.35 million. 

In addition to Alibaba Group Holding Limited (NYSE:BABA), JD.com, Inc. (NASDAQ:JD), and PDD Holdings Inc. (NASDAQ:PDD), KE Holdings Inc. (NYSE:BEKE) is one of the top Chinese stocks that billionaires are piling into. 

Here is what Tao Value has to say about KE Holdings Inc. (NYSE:BEKE) in its Q3 2021 investor letter:

“As witnessed in the past quarter, the government intervention in the Chinese private sector is elevated to an unprecedented level. Given this background, I thoroughly reviewed all our Chinese holdings and made a few changes. We exited KE holdings (ticker: BEKE), for high potential regulatory risk and the passing of the visionary founder & CEO Zuo Hui (who was a core tenet of our original thesis).”

9. Hello Group Inc. (NASDAQ:MOMO)

Number of Hedge Fund Holders: 15

No. of Billionaire Investors: 10

Hello Group Inc. (NASDAQ:MOMO) operates in China and offers mobile-based social and entertainment services. The company provides a mobile application called Momo, which enables people to connect and engage in social interactions based on their location and interests. Additionally, Hello Group Inc. (NASDAQ:MOMO) offers applications including Tantan, a social and dating application, as well as applications under the names Hertz, Soulchill, Duidui, and Tietie. As of the first quarter of 2023, this Chinese stock has attracted the attention of 10 billionaires. 

On April 27, UBS revised its rating on Hello Group Inc. (NASDAQ:MOMO) from Neutral to Buy and increased its price target from $4.80 to $12.50. The firm believes that Hello Group Inc. (NASDAQ:MOMO) has passed the worst phase, considering the weak guidance for the first quarter, and anticipates a gradual recovery in earnings starting from the second quarter. UBS has adjusted its 2023 revenue estimate downward by 3% primarily due to the weaker performance in the first quarter. Additionally, UBS has shifted its valuation methodology from a sum-of-the-parts approach to a discounted cash flow model in determining the price target.

According to Insider Monkey’s first quarter database, 15 hedge funds were bullish on Hello Group Inc. (NASDAQ:MOMO), compared to 20 funds in the prior quarter. 

8. New Oriental Education & Technology Group Inc. (NYSE:EDU)

Number of Hedge Fund Holders: 31

No. of Billionaire Investors: 10

New Oriental Education & Technology Group Inc. (NYSE:EDU) delivers private educational services in China under the New Oriental brand. The company’s operations are divided into several segments, including Educational Services and Test Preparation Courses, Online Education and Other Services, Overseas Study Consulting Services, and Others. During the first quarter of 2023, New Oriental Education & Technology Group Inc. (NYSE:EDU) emerged as a highly favored Chinese stock among billionaires. As of the end of March, it was included in the investment portfolios of 10 billionaires.

On April 19, New Oriental Education & Technology Group Inc. (NYSE:EDU) announced an FQ3 non-GAAP EPS of $0.56 and a revenue of $754.15 million, topping Wall Street estimates by $0.30 and $38.62 million, respectively. The primary factors contributing to the growth of the company were the rise in revenues generated from its new educational initiatives, expansion of the East Buy private label products, and the success of its livestreaming e-commerce business.

According to Insider Monkey’s first quarter database, 31 hedge funds were long New Oriental Education & Technology Group Inc. (NYSE:EDU), compared to 36 funds in the preceding quarter. Fang Zheng’s Keywise Capital Management is the largest stakeholder of the company, with approximately 4 million shares worth $153.3 million. 

7. ZTO Express (Cayman) Inc. (NYSE:ZTO)

Number of Hedge Fund Holders: 23

No. of Billionaire Investors: 10

ZTO Express (Cayman) Inc. (NYSE:ZTO) operates in China and specializes in express delivery services and additional value-added logistics services. The company provides freight forwarding and delivery services for both e-commerce and traditional merchants. ZTO Express (Cayman) Inc. (NYSE:ZTO) is regarded as one of the prominent Chinese stocks among billionaires. According to Insider Monkey’s data, by the end of March, 10 billionaire investors held stakes in the company.

On May 18, BofA analyst Fan Tso raised the firm’s price target on ZTO Express (Cayman) Inc. (NYSE:ZTO) to $39 from $36 and reiterated a Buy rating on the shares. The analyst highlighted the company’s strong performance in Q1, with earnings exceeding expectations and a significant 20.5% growth in parcel volumes. Additionally, the firm is revising its model to incorporate lower unit cost assumptions.

According to Insider Monkey’s Q1 database, 23 hedge funds were bullish on ZTO Express (Cayman) Inc. (NYSE:ZTO), compared to 21 funds in the last quarter. Kerr Neilson’s Platinum Asset Management is the biggest stakeholder of the company, with 16 million shares worth $461 million. 

6. Trip.com Group Limited (NASDAQ:TCOM)

Number of Hedge Fund Holders: 41

No. of Billionaire Investors: 10

Trip.com Group Limited (NASDAQ:TCOM) is a travel service provider that offers accommodation reservations, transportation ticketing, packaged tours, in-destination activities, corporate travel management, and other travel-related services. The company caters to customers in China as well as internationally. At the conclusion of March 2023, Trip.com Group Limited (NASDAQ:TCOM) stock was found in the investment portfolios of 10 billionaires.

On April 21, Citi analyst Brian Gong initiated a “90-day positive catalyst watch” on Trip.com Group Limited (NASDAQ:TCOM)’s shares in anticipation of the company’s Q1 results. The analyst expects to see a release of pent-up demand during the Labor Day holiday and foresees a recovery in outbound travel. Despite Trip.com Group Limited (NASDAQ:TCOM)’s current valuation not appearing inexpensive, the analyst believes there is a reasonable potential for earnings to surpass consensus estimates. The firm maintained a Buy rating on the shares and set a price target of $45.

According to Insider Monkey’s first quarter database, 41 hedge funds were bullish on Trip.com Group Limited (NASDAQ:TCOM), compared to 36 funds in the prior quarter. Richard S. Pzena’s Pzena Investment Management is the largest stakeholder of the company, with 7.8 million shares worth $297 million. 

Like Alibaba Group Holding Limited (NYSE:BABA), JD.com, Inc. (NASDAQ:JD), and PDD Holdings Inc. (NASDAQ:PDD), Trip.com Group Limited (NASDAQ:TCOM) is one of the Chinese stocks favored by billionaire investors. 

Artisan International Value Fund made the following comment about Trip.com Group Limited (NASDAQ:TCOM) in its Q4 2022 investor letter:

“Trip.com Group Limited (NASDAQ:TCOM), a Chinese online travel agency, was the second-largest contributor to return in 2022. Trip.com is the dominant supplier of online travel reservations and is expected to benefit from China’s loosening COVID-19 restrictions on both domestic and international travel. Management of Trip.com has wisely spent the COVID-19 lockdown period reinforcing and improving the company’s market position and reducing unnecessary costs. We expect earnings to boom over the next year as travel picks up. Other investors appeared to agree, pushing the share price up 42% in 2022.”

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Disclosure: None. 10 Chinese Stocks Billionaires Are Loading Up On is originally published on Insider Monkey.

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Click to continue reading…