5 Best Chinese Stocks To Buy Right Now

2. PDD Holdings Inc. (NASDAQ:PDD)

Number of Hedge Fund Holders: 71

PDD Holdings Inc. (NASDAQ:PDD) ranks 2nd on our list of the best Chinese stocks. It is a multinational commerce group that owns and manages a portfolio of businesses, including Pinduoduo, an e-commerce platform offering a wide range of products across different categories including agricultural produce, apparel, electronics, furniture, cosmetics, and more. 

On November 28, 2023, PDD Holdings Inc. (NASDAQ:PDD) reported a Q3 non-GAAP EPADS of $1.55 and a revenue of $9.44 billion, outperforming Wall Street estimates by $0.39 and $2.02 billion, respectively. The 94% year-over-year increase in revenue stemmed from an improvement in online marketing services and transaction services.

According to Insider Monkey’s fourth quarter database, 71 hedge funds were long PDD Holdings Inc. (NASDAQ:PDD), compared to 66 funds in the last quarter. Lei Zhang’s Hillhouse Capital Management is the largest stakeholder of the company, with 10.1 million shares worth $1.47 billion. 

GreenWood Investors stated the following regarding PDD Holdings Inc. (NASDAQ:PDD) in its fourth quarter 2023 investor letter:

“This herd-like mentality opened up two extremely high-quality investment opportunities for us in the back half of 2023. Using insights gleaned from our close proximity to e-commerce at CTT, we undertook a multi-month effort to underwrite PDD Holdings Inc. (NASDAQ:PDD). This US-listed Irish holding company owns China’s leading disruptive marketplace called PinDuoDuo. During the summer, as it became unbearable for most investors to remain publicly invested in Chinese equities, we took a position in PDD.

During our diligence phase, a local Hong Kong investor that was invested in the company noted that Western investors should just stay away as they won’t appreciate PDD’s operating culture. He highlighted how the company gives no guidance, talks to no investors, and does not optimize its business for the short term. This means that quarterly earnings often have very large deviations from consensus, driving >20%+ moves in the stock. Paired with an extremely bearish market sentiment on Chinese equities, this combination became “uninvestable for those in western markets…” (Click here to read the full text)