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

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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.

At Insider Monkey, we track around 750 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).

Baidu Inc (ADR) (NASDAQ:BIDU), homepage, website, online, close up, magnifying glass

Gil C / Shutterstock.com

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.

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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.

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

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