8 Chinese Stocks in Cathie Wood’s Portfolio

In this article, we discuss the 8 Chinese stocks in Cathie Wood’s portfolio. You can skip our comprehensive analysis of these Chinese stocks and Cathie Wood’s investment strategy, and go directly to 5 Chinese Stocks in Cathie Wood’s Portfolio.

2021 was a depressing year for Chinese stocks. Those in power in Beijing tightened regulations and cracked down on excessive wealth, anti-competitive behavior, and conglomerate monopolies. The NASDAQ Golden Dragon China Index dropped 60% in 2021, Alibaba Group Holding Limited (NYSE:BABA) dropped 58% from recent highs, and Pinduoduo Inc. (NASDAQ:PDD) fell 73% as the market reacted to the uncertain regulatory environment. Much on the priority list of China now pertains to their vision of ‘Common Prosperity’, which seeks to re-engineer Chinese society to eradicate the burgeoning wealth gap. Analysts feel that the Chinese government is willing to risk these market losses and volatility in order to reorganize society on a more equal footing for all citizens.

Cathie Wood spoke about China after scaling back her holdings in Chinese stocks dramatically while retaining stocks she believes are trying to get on the ‘right’ side of Beijing. She believes investors shouldn’t give up on China, as its focus on innovation and entrepreneurship deserves recognition in the long term. The portfolio manager for Fidelity’s China Focus Fund, Jing Ning talked positively about China in her 2022 outlook note in December:

“China may outperform other markets in 2022, given its easing cycle has already started. Valuations are more reasonable, and there is still low ownership among global investors,”

BlackRock’s chief China economist Yu Song also mentioned a promising outlook on Chinese stocks in a 2022 outlook report published in December:

“We recognise the [regulatory] risks, yet see current valuations as offering eligible investors adequate compensation for them. We stay moderately positive on Chinese equities as we see a shift to a slightly easier policy. We expect the regulatory clampdown to last but not intensify.”

Cathie Wood of ARK Investment Management

Our Methodology

13F filings for the third quarter of 2021 were used to compile the following list. Hedge fund sentiment around each stock was derived using Insider Monkey’s database of 867 elite hedge funds.

8 Chinese Stocks in Cathie Wood’s Portfolio

8. Yeahka Limited (OTC:YHEKF)

ARK Investment Management’s Stake Value: $189,000

Percentage of ARK Investment Management’s 13F Portfolio: 0%

Number of Hedge Fund Holders: N/A

As of the third quarter of 2021, Cathie Wood’s ARK Investment Management reported owning approximately 58,000 shares in Yeahka Limited (OTC:YHEKF). In Q2, Wood owned 8.63 million shares in the Chinese company and has reduced her stake by 99.32% over the previous quarter.

Yeahka Limited (YHEKF) is based in Shenzhen, China, and deals in the provision of payment and business services to consumers and merchants. It was founded in 2011.

Along with Tesla, Inc. (NASDAQ:TSLA), Twitter, Inc. (NYSE:TWTR), and Spotify Technology S.A. (NYSE:SPOT), Yeahka Limited (OTC:YHEKF) is a top stock in the portfolio of Cathie Wood.

7. BYD Company Limited (OTC:BYDDF)

ARK Investment Management’s Stake Value: $21.61 million

Percentage of ARK Investment Management’s 13F Portfolio: 0.05%

Number of Hedge Fund Holders: 2 

BYD Company Limited (OTC:BYDDF) deals in the production and sale of automobiles and is based in Shenzhen, China. ARK Investment Management disclosed owning 346,600 shares in the company at the close of the third quarter, valued at $21.61 million. This is a reduction in stake of 60% over the previous quarter, where the fund held 861,000 shares in the Chinese company.

BYD Company Limited (OTC:BYDDF) reported sales of 93,945 electric vehicles in December 2021, which was an increase of 225.7% year on year, despite the shutdown of one of the company’s production sites due to a Covid-19 outbreak in Xi’an, China.

As of the third quarter, 2 out of 867 elite hedge funds tracked by Insider Monkey reported owning stakes in BYD Company Limited (OTC:BYDDF), holding stakes worth $22.35 million.

6. JD Logistics, Inc. (OTC:JDLGF)

ARK Investment Management’s Stake Value: $22.54 million

Percentage of ARK Investment Management’s 13F Portfolio: 0.05%

Number of Hedge Fund Holders: N/A

JD Logistics, Inc. (OTC:JDLGF) is a Beijing-based company that provides supply chain solutions and logistics services. Cathie Wood’s ARK Investment Management owns 5.4 million shares in JD Logistics, Inc. (OTC:JDLGF) at the end of the third quarter, worth $22.54 million. This is an increase of 2% over the previous quarter where Wood held 5.3 million shares in the company.

On December 30, Jefferies analyst Thomas Chong initiated coverage of JD Logistics, Inc. (OTC:JDLGF) with a ‘Buy’ rating and a price target of HK$41, noting that the company is a “rapid growth and margin expansion story” in a supply chain logistics market that has significant potential.

In addition to Tesla, Inc. (NASDAQ:TSLA), Twitter, Inc. (NYSE:TWTR) and Spotify Technology S.A. (NYSE:SPOT), JD Logistics, Inc. (OTC:JDLGF) is an exciting stock in the portfolio of Cathie Wood’s ARK Investment Management.

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