Keywise Capital Management, led by Fang Zheng, is a China-based hedge fund that is focused primarily on investing in companies from the Greater China Markets, such as Hong Kong, Shanghai, Taiwan and Singapore. With over $1.4 billion in assets under management, Keywise reported in its latest 13F, an equity portfolio worth $415.91 million, significantly higher than the previous quarter value of $301.28 million. However, while the majority of the companies are represented by Chinese, US-listed stocks, the fund has also been bullish on some Canada-based companies as well. In this piece, we will discuss some of the largest holdings in terms of value on which Keywise and Mr. Fang have been the most bullish.
The fund’s equity portfolio is divided among Technology (60%) and Service stocks (40%), with the largest holding represented by Vipshop Holdings Ltd – ADR (NYSE:VIPS), in which the fund owns 727,040 shares, down by over 30% over the quarter, with an aggregate value of $108.55 million.
At the same time, Keywise upped its exposure to Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) by over 1.1 million shares, currently holding 1.12 million shares, worth $56.32 million. Ctrip.com is engaged in providing hotel accomodations, airline tickets, as well as packaged tours in China. Its stock more than doubled over the past 52 weeks. During the past several quarters, the company has been beating the estimates for EPS and revenues, reporting a net income of $1.57 per share for the previous year, on revenues worth $890 million, versus $1.43 and $877 million consensus estimates. Another major Asia-focused hedge fund, Lei Zhang‘s Hillhouse Capital Management held 3.76 million shares of Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) at the end of 2013.
Keywise has been bullish on BlackBerry Ltd (NASDAQ:BBRY) as well. During the first three months of 2014, the fund raised its stake by almost a sixfold to 3.61 million shares, with a reported value of $29.17 million. BlackBerry Ltd (NASDAQ:BBRY) is not in a good position currently, with its stock losing over 50% over the past year, and edging down by 2% year-to-date on the back of a weak financial performance. The average recommendation for the stock is ‘Underweight.” However, as stated in the press release for the Q42013 results, the company expects an improvement, planning to maintain its strong cash position and looking for more opportunities to streamline operations. Blackberry also expects to break even its cash flow by the end of its fiscal 2015.
Hedge funds also seem to be divided around BlackBerry Ltd (NASDAQ:BBRY). The largest investor of the company is Prem Watsa‘s Fairfax Financial Holdings with 51.85 million shares, however, Dan Loeb of Third Point also seems to be bullish adding the company to its equity portfolio and reporting 10.0 million shares as at the end of 2013. Andreas Halvorsen‘s Viking Global, on the other hand, edged down its stake by 10% to some 7.28 million shares.
The next on the list is another Canada-based company, Canadian Solar Inc. (NASDAQ:CSIQ), in which Keywise raised its stake by almost 207,400 million shares to 238,200 shares, worth $7.63 million. The company finished the last year in green, reporting EPS of $0.77, versus a net loss of $3.04 in the previous year. Analysts expect the company to further increase its profitability, with the estimates for the current year standing at $3.70 for EPS. Moreover, Canadian Solar Inc. (NASDAQ:CSIQ) trades at a P/E of around 42.00, which is one of the largest in the industry.
The last two companies from our list are represented by ChinaCache International Holdings Ltd (ADR) (NASDAQ:CCIH), and E Commerce China Dangdang Inc (ADR) (NYSE:DANG), in which the fund initiated stakes during the January-March period. In ChinaCache International Holdings Ltd (ADR) (NASDAQ:CCIH) the fund disclosed holding 329,800 shares, with a total value of $6.77 million. The stock of the company specialized in Internet content and applications solutions has gained over 70% since the beginning of the year, Israel Englander‘s Millennium Management also added the company to its equity portfolio, reporting 221,000 shares held as at the end of last year.
E Commerce China Dangdang Inc (ADR) (NYSE:DANG) is a small-cap e-commerce company, whose stock gained 20% since the beginning of the year, a significant boost coming amid the Q42013 results release. The company delivered a net income of $0.05 per share for the fourth quarter, after reporting losses for several consecutive periods, and reducing its net loss for the full 2013 to $0.27, from $0.87 a year earlier. Moreover, E Commerce China Dangdang Inc (ADR) (NYSE:DANG) expects that its revenue will continue to increase, forecasting a 30% growth on the year for the first quarter of 2013.