In this article, we will take a look at the 5 cheap Chinese penny stocks to buy according to hedge funds. To see more such companies, go directly to 11 Cheap Chinese Penny Stocks to Buy According to Hedge Funds.
5. LexinFintech Holdings Ltd. (NASDAQ:LX)
Number of Hedge Fund Holders: 9
Online consumer finance company LexinFintech Holdings Ltd. (NASDAQ:LX) ranks 5th in our list of the best cheap Chinese penny stocks to buy now. LexinFintech Holdings Ltd. (NASDAQ:LX) has a PE ratio of 2.20 as of October 9. LexinFintech Holdings Ltd. (NASDAQ:LX) jumped to new highs in August after the company posted record revenue growth. Profit margins jumped to 11.6% from 6.9% in the second quarter of 2022.
Insider Monkey’s database of 910 hedge funds shows that 9 hedge funds had stakes in LexinFintech Holdings Ltd. (NASDAQ:LX) as of the end of the second quarter. The most significant stakeholder of LexinFintech Holdings Ltd. (NASDAQ:LX) was D E Shaw which owns a $1.9 million stake in the company.
4. YS Biopharma Co., Ltd. (NASDAQ:YS)
Number of Hedge Fund Holders: 14
YS Biopharma Co., Ltd. (NASDAQ:YS) ranks 4th in our list of the best cheap Chinese penny stocks to buy according to hedge funds. Out of the 910 hedge funds tracked by Insider Monkey, 14 hedge funds reported owning stakes in YS Biopharma Co., Ltd. (NASDAQ:YS).
In August YS Biopharma Co., Ltd. (NASDAQ:YS) posted fiscal Q1 results. Revenue in the quarter came in at $24.4 million. Net loss in the quarter came in at RMB69.5 million, compared with RMB19.6 million in the same period of 2023.
3. Lufax Holding Ltd (NYSE:LU)
Number of Hedge Fund Holders: 16
Lufax Holding Ltd (NYSE:LU) – ADR is another personal financial services platform company in our list of cheap Chinese penny stocks. Lufax Holding Ltd (NYSE:LU), however, has pulled back significantly over the past one year, losing 50% in value. In August Lufax Holding Ltd (NYSE:LU) posted second quarter results. Total net income in the period came in at RMB $9.27 billion, down from RMB 15.3 billion posted in the same quarter last year.
However, Lufax Holding Ltd (NYSE:LU) was in 16 hedge fund portfolios, according to Insider Monkey’s database of 910 hedge funds. The biggest stakeholder of Lufax Holding Ltd (NYSE:LU) was Thomas Steyer’s Farallon Capital which owns a $29 million stake in the company. Ray Dalio’s hedge fund cut its stake in Lufax Holding Ltd (NYSE:LU) by 79% in the second quarter. That’s why Lufax Holding Ltd (NYSE:LU) features in our list of the Chinese companies Dalio’s fund is dumping from its portfolio.
2. Hello Group Inc. (NASDAQ:MOMO)
Number of Hedge Fund Holders: 17
Chinese social media services and entertainment platforms company Hello Group Inc. (NASDAQ:MOMO) is one of the best cheap Chinese penny stocks to buy according to hedge funds. In August Hello Group Inc. (NASDAQ:MOMO) posted second quarter results. Adjusted EPADS in the quarter came in at $0.43 beating estimates by $0.07. Revenue in the period ticked up 0.9% year over year to $432.7 million, surpassing estimates by $14.75 million.
Out of the 910 hedge funds tracked by Insider Monkey, 17 hedge funds had stakes in Hello Group Inc. (NASDAQ:MOMO).
1. Tencent Music Entertainment Group (NYSE:TME)
Number of Hedge Fund Holders: 23
Music streaming services platform company Tencent Music Entertainment Group (NYSE:TME) – ADR in August posted second quarter results. Tencent Music Entertainment Group (NYSE:TME)’s revenue in the quarter jumped 5.5% year-over-year (Y/Y) to RMB7.29 billion ($1.01 billion), driven by online music services.
As of the end of the second quarter of 2023, 23 hedge funds tracked by Insider Monkey had stakes in Tencent Music Entertainment Group (NYSE:TME). The biggest hedge fund stakeholder of Tencent Music Entertainment Group (NYSE:TME) was John Overdeck and David Siegel’s Two Sigma Advisors which owns a $39 million stake in the company.
Polen Global Emerging Markets Growth made the following comment about Tencent Music Entertainment Group (NYSE:TME) in its Q4 2022 investor letter:
“Tencent Music Entertainment Group (NYSE:TME), China’s equivalent to Spotify, almost doubled over the quarter after reporting third-quarter earnings with revenues and margins coming in better than expected. The company trades on very attractive valuations, and some of the mispricings we have discussed for a while have started to be realized by the broader market.”
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