Tiger Pacific’s New Investments in Chinese Stocks, Plus 1 It Sold Off

Tiger Pacific Capital is a New York-based hedge fund founded by Run Ye, Junji Takegami and Hoyon Hwang in 2012, with seed money from legendary investor Julian Robertson. According to its recently-released 13F filing for the third quarter, Tiger Pacific’s U.S. equity portfolio was worth $576 million, and consisted of just eight long positions.

Tiger Pacific, which focuses primarily on companies based in China, made a number of noteworthy moves in Chinese equities during the quarter. We’ll take a look at those moves in this article and see what Chinese stocks the fund is bullish on, as well as one that simply is not any longer.

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Baidu Inc (ADR) (NASDAQ:BIDU)

Tiger Pacific sold all 75,404 Baidu Inc (ADR) (NASDAQ:BIDU) shares that it had owned on June 30 during the third quarter. The stock has lost 7.62% so far this year and the company reported its biggest earnings drop ever in the second quarter, amid government-imposed ad restrictions that have severely dented its search business. Baidu posted net income of 2.4 billion yuan ($360.5 million) for the quarter, down by 36% from a year earlier. While its income rebounded in the third quarter, its revenue fell by 0.7% year-over-year, and the company has warned that revenue could slide by as much as 4.6% year-over-year during the fourth quarter. Ken Fisher’s Fisher Asset Management reported ownership of about 1.22 million shares of Baidu Inc (ADR) (NASDAQ:BIDU) at the end of third quarter.

China Lodging Group, Ltd (ADR) (NASDAQ:HTHT)

– Shares Owned by Tiger Pacific Capital (as of September 30): 42,314

– Value of Tiger Pacific Capital’s Holding (as of September 30): $1.91 million

Tiger Pacific bought 42,314 shares of China Lodging Group, Ltd (ADR) (NASDAQ:HTHT) in the third quarter, with the aggregate value of the new stake being $1.91 million on September 30. The Shanghai-based hotel company earned $0.72 in the second quarter, well above analysts’ forecasts of $0.41, while revenue came in at $254.4 million, beating the estimates of $248.76 million. The company expects third quarter net revenue to grow by between 10% and 12.5% year-over-year. The stock is up by over 44% so far this year. Fisher Asset Management has 65,937 shares of China Lodging Group, Ltd (ADR) (NASDAQ:HTHT) in its portfolio as of the end of the third quarter.

On the next page we’ll discuss three more of Tiger Pacific’s third quarter moves.