5 Chinese Stocks That This China-Focused Investor Loves

#3 500.com Ltd (NYSE:WBAI)

Shares held (as of September 30): 592,400
Total Value (as of September 30): $9.61 million
Percent of Portfolio (as of September 30): 17.13%

500.com Ltd (NYSE:WBAI) has had a roller-coaster year, as China’s government previously suspended online lottery sales and now apparently plans to allow provinces to approve plans for lottery payouts and sales. As a provider of online lottery services and information, the company’s fortunes heavily depend on what Beijing wants to do. Given that shares are up by 20.46% year-to-date, it seems investors think Beijing’s laws and 500.com’s business model can co-exist. Keywise Capital is one of the believers, as it established a brand new position of 592,400 shares in the quarter, good for 17.13% of its U.S equity portfolio.

#2 Vipshop Holdings Ltd – ADR (NYSE:VIPS)

Shares held (as of September 30): 611,470
Total Value (as of September 30): $10.27 million
Percent of Portfolio (as of September 30): 18.32%

Although Vipshop Holdings Ltd – ADR (NYSE:VIPS) shares are roughly flat year-to-date as growth slows, Keywise Capital increased its position by 61% during the quarter to 611,470 shares. China’s economy is going through a soft patch as it becomes wealthier. Because growth is slowing, online e-commerce flash sales are no longer rising as fast as they once did. This means Vipshop’s GMV and active customer growth won’t be as eye-popping as they once were. Long-term shareholders are still happy, however, as Vipshop’s flat performance is a lot better than Alibaba Group Holding Ltd (NYSE:BABA)’s return of negative 27.25% year-to-date.

#1 Qihoo 360 Technology Co Ltd (NYSE:QIHU)

Shares held (as of September 30): 238,600
Total Value (as of September 30): $11.41 million
Percent of Portfolio (as of September 30): 20.35%

Qihoo 360 Technology Co Ltd (NYSE:QIHU) is a new position in the third quarter for Keywise. The stock is down by 5.45% year-to-date as investors worry about the macro economic climate of China. Long-term, however, the company’s future is still promising as demand for PC security and mobile security will only increase. With a forward P/E of 11.6 versus the NASDAQ’s forward P/E of around 18, shares look cheap. If the Shanghai index begins trending higher again, private investors could try to take Qihoo private again, at a presumably nice premium to today’s price.

Disclosure: None