2. iShares MSCI China Multisector Tech ETF (NASDAQ:TCHI)
iShares MSCI China Multisector Tech ETF (NASDAQ:TCHI) seeks to track the investment results of an index consisting of large and mid-cap Chinese companies in the technology sector. These companies specialize in ecommerce, streaming, and automation. The ETF was established in January 2022, with net assets of $8.5 million and an expense ratio of 0.59%. iShares MSCI China Multisector Tech ETF (NASDAQ:TCHI)’s portfolio has 175 holdings.
Pinduoduo Inc. (NASDAQ:PDD) is the biggest stock in iShares MSCI China Multisector Tech ETF (NASDAQ:TCHI)’s portfolio. The company operates an e-commerce platform in China. On May 31, Citi analyst Alicia Yap raised the price target on Pinduoduo Inc. (NASDAQ:PDD) to $62 from $61 and kept a Buy rating on the shares. The company’s Q1 results were stronger than forecasted against “relatively muted” expectations, the analyst told investors. The analyst believes Duoduo Grocery possibly benefited from the lockdown.
Among the hedge funds tracked by Insider Monkey, 36 funds were bullish on Pinduoduo Inc. (NASDAQ:PDD) at the end of Q1 2022, up from 34 funds in the preceding quarter. Chase Coleman’s Tiger Global Management held the largest position in the company, comprising 5.7 million shares worth $231.5 million.
Here is what Baillie Gifford has to say about Pinduoduo Inc. (NASDAQ:PDD) in its Q2 2021 investor letter:
“As many countries enjoy a relaxation of Covid restrictions, Mr Market is focussed on short-term beneficiaries of ‘the pleasure after the plague’. There are interesting parallels with the Roaring 20s here, but to our minds, they extend beyond post-pandemic hedonism. Much of the new wealth created in the 1920s was patchily distributed and accompanied by a pervasive sense that the older generation had let down younger people. In 1920, John F. Carter, an irate 23-year-old wrote “the older generation had certainly pretty well ruined this world before passing it on to us. We have been forced to live in an atmosphere of ‘tomorrow we die,’ and so, naturally, we drank and were merry.”
In a similar vein, some of the greatest Growth opportunities are materializing from the companies that are shifting humankind towards more sustainable ways of consuming by driving efficiencies and eliminating surplus. Pinduoduo’s ‘farm to table’ platform is one example – cutting out huge waste in farm produce and short circuiting layers of infrastructure by matching Chinese food supply and demand through a group buying model. In a similar vein, Meituan is well on the way to developing China’s primary ‘Software as a Service’ ecosystem for food distribution which we believe has a strong chance of replacing wasteful wet markets as the primary channel for transacting in produce.
Pinduoduo’s share price pulled back following news that Chinese regulators are investigating possible anti-competitive activities by the country’s large online companies. However, Pinduoduo appears well placed to navigate such regulatory scrutiny in the long-term, helped in part by its community-buying business model that benefits consumers, manufacturers and farmers alike. Its business fundamentals are stellar– the company remains the largest Chinese e-commerce platform, with over 820 million annual active users (surpassing Alibaba and JD.com), while revenue growth increased by 239% over the previous year.”
