5 China Stocks in Ray Dalio’s Portfolio

1. Baidu, Inc. (NASDAQ:BIDU)

Number of Hedge Fund Holders: 45

Baidu, Inc. (NASDAQ:BIDU) is a Beijing-based company that provides internet search services in China. The company posted a Q2 Non-GAAP EPADS of $2.36 and a revenue of $4.43 billion on August 30, outperforming Wall Street estimates by $0.79 and $230 million, respectively. The company had a free cash flow of $823 million. Ray Dalio boosted his Baidu, Inc. (NASDAQ:BIDU) stake by 2% in Q2 2022, holding 1.14 million shares worth over $170 million. 

On August 31, JPMorgan analyst Alex Yao upgraded Baidu, Inc. (NASDAQ:BIDU) to Overweight from Neutral with a price target of $200, up from $160, after lifting his FY22 and FY23 EPS estimates by 20% and 22%, respectively, as he expects a margin recovery. He forecasts Baidu, Inc. (NASDAQ:BIDU)’s EPS growth to continue being “notable” after Q4 and projects upward revisions of other earnings estimates to support a higher stock price.

Among the hedge funds tracked by Insider Monkey, 45 funds were bullish on Baidu, Inc. (NASDAQ:BIDU) at the end of June 2022, compared to 47 funds in the last quarter. John W. Rogers’ Ariel Investments is the largest stakeholder of the company, with 2.64 million shares worth about $393 million. 

Here is what Horos Asset Management has to say about Baidu, Inc. (NASDAQ:BIDU) in its Q1 2022 investor letter:

“Although the initial reaction of the Chinese government was passive, it seems that the blacklist published by the SEC, which already includes companies as important as the technology giant Baidu, has shaken things up. Thus, at the beginning of April the CSRC (China Securities Regulatory Commission) announced possible changes in its regulation that would allow this inspection by foreign auditors, provided that the companies previously communicate to this body the state secrets that would be exposed, as well as the sensitive information that they might have to hand over, and the subsequent audit is carried out in a framework of collaboration with the CSRC. In short, a move in the direction desired by the SEC, although still far from the optimal result, that is, unrestricted access to information.

While these negotiations between the two regulatory bodies are progressing, Chinese companies have to decide how best to preserve their interests. In this regard, some companies are already listed on the Hong Kong stock exchange, as is the case of the three major technology companies (Alibaba Group, Tencent Holdings and Baidu).”

You can also take a look at Best Artificial Intelligence Stocks To Buy Now and Best Defensive Stocks Under $50. 

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