In this article, we discuss the 5 top Chinese companies on NASDAQ. If you want to read our detailed analysis of these companies, go directly to the Top Chinese Companies on NASDAQ.
5. NetEase, Inc. (NASDAQ: NTES)
Number of Hedge Fund Holders: 32
NetEase, Inc. (NASDAQ: NTES) is a technology company that offers interactive entertainment services. The online gaming business of the firm is likely to help the stock gain value in the coming weeks and months as it is one of the fastest growing markets in the world. On May 18, NetEase, Inc. (NASDAQ: NTES) reported that the online game services revenue for the first three months of 2021 had increased 11% to $2.3 billion.
NetEase, Inc. (NASDAQ: NTES) stock has offered investors returns exceeding 36% over the course of the past twelve months. In addition to gaming and interactive entertainment, the firm also dabbles in the communications and ecommerce businesses. It is ranked fifth on our list of top Chinese companies on NASDAQ.
Out of the hedge funds being tracked by Insider Monkey, Bermuda-based investment firm Orbis Investment Management is a leading shareholder in NetEase, Inc. (NASDAQ: NTES) with 18.2 million shares worth more than $1.8 billion.
4. Bilibili Inc. (NASDAQ: BILI)
Number of Hedge Fund Holders: 53
Bilibili Inc. (NASDAQ: BILI) is a video sharing website that primarily caters to the young generation of Chinese people who want a YouTube-esque experience in the country. The firm also offers gaming and other services on its platform. The firm has seen its user base grow in recent months, reporting on May 13 that monthly active users had reached 223 million by the end of March, an increase of 30% compared to a year ago. The total time spent by the users on the platform also increased with the daily average crossing 82 minutes per user.
Bilibili Inc. (NASDAQ: BILI) stock has returned more than 170% to investors over the past year. On April 8, investment advisory Credit Suisse upgraded Bilibili Inc. (NASDAQ: BILI) to Outperform from Neutral with a price target of $140.
At the end of the first quarter of 2021, 53 hedge funds in the database of Insider Monkey held stakes worth $3.01 billion in Bilibili Inc. (NASDAQ: BILI), up from 46 in the preceding quarter worth $3.08 billion.
In its Q4 2020 investor letter, Tao Value, an asset management firm, highlighted a few stocks and Bilibili Inc. (NASDAQ: BILI) was one of them. Here is what the fund said:
“Bilibili (ticker: BILI) similarly reported a blast Q3 2020. Bilibili reached average MAU of 197m with high 7.6% pay ratio, showing strong user growth and high engagement. Additionally, the high margin advertisement segment showed exceptionally strong trend, growing 126% yoy. Though surprising to many, I think it is a natural outcome of building an ever-more valuable user generated contents platform. If it is not by ads, I believe these values created by Bilibili will accrue to it in other ways. One interesting data point is that management mentioned the average age of new cohorts are still around 20, indicating it is still in its early stage of a long growth runway. I am happy to see this position played out like how I envisioned in original thesis and will be excited to continue to follow its progress.”
3. Pinduoduo Inc. (NASDAQ: PDD)
Number of Hedge Fund Holders: 56
Pinduoduo Inc. (NASDAQ: PDD) is a retailer that focuses on agriculture-related products. Amid the dramatic rise of ecommerce platforms, the firm has established a name for itself among the rural user base in China, something that other retail giants have struggled with in recent years. The company has doubled down on this brand recognition, pledging to sell $145 billion worth of farm produce on its platform by 2025. In 2019, estimates suggested that almost 12 million farmers in the country supplied their produce to merchants who used Pinduoduo to sell products.
Pinduoduo Inc. (NASDAQ: PDD) recently beat market estimates on revenue and earnings per share for the first quarter of 2021. Average monthly users on the platform increased 49% year-on-year during the period. The company’s shares have offered investors returns exceeding 47% over the past year.
At the end of the first quarter of 2021, 56 hedge funds in the database of Insider Monkey held stakes worth $6.2 billion in Pinduoduo Inc. (NASDAQ: PDD), up from 54 in the preceding quarter worth $10.5 billion.
In its Q1 2021 investor letter, Tao Value, an asset management firm, highlighted a few stocks and Pinduoduo Inc. (NASDAQ: PDD) was one of them. Here is what the fund said:
“Pinduoduo reported a strong quarter, reporting MAU of 720 million, now surpassing Taobao. However, it was overshadowed by a bigger news on Colin Huang resigning from Board and completely disassociating himself from PDD’s management & operation. Huang explained in his letter to shareholders that he would start fundamental research initiatives in food science. Although not entirely shocked (as he already stepped down from CEO July 2020), I am surprised by the fast pace of such transition. I remain confident in the organization and the culture Huang built but will monitor it closely.”
2. JD.com, Inc. (NASDAQ: JD)
Number of Hedge Fund Holders: 75
JD.com, Inc. (NASDAQ: JD) is one of the largest ecommerce platforms in China. It has grown during the pandemic as the coronavirus lockdowns encouraged people to shop online. In the coming weeks, the stock is expected to soar further as a major shopping festival begins in China. In late May, the share price of the firm jumped more than 2.5% as the firm reported strong earnings results for the first fiscal quarter, beating market expectations on revenue and reporting a 49% year-on-year increase in monthly active users.
JD.com, Inc. (NASDAQ: JD) had announced in late March that it would be selling its artificial intelligence and cloud businesses worth over $2.4 billion. The businesses would be sold to JD Digits, the fintech arm of JD.com, Inc. (NASDAQ: JD).
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Tiger Global Management LLC is a leading shareholder in the firm with 51.6 million shares worth more than $4.3 billion.
In its Q1 2021 investor letter, Arisaig Partners, an asset management firm, highlighted a few stocks and JD.com, Inc. (NASDAQ: JD) was one of them. Here is what the fund said:
“Our largest holding as a firm, JD.com, we expect to grow earnings at an annualised rate of 30% over the next five years, implying it will trade on an EV / EBITDA of 7.5x at the end of this period. Is this a growth stock or a value stock? Does anyone care? Do these labels really matter?
For the Asia Fund, with a higher pre-existing allocation to our core FMCG holdings coming into the year, we took advantage of capital market volatility to further concentrate on our highest conviction names. JD.com has been the main destination for our limited reallocations as evidence continues to emerge supporting our thesis that the company has a strong right-to-win in the large and highly fragmented USD1.8th Chinese grocery market. We have also been encouraged by the fact that after years of persistence, the company is beginning to engage with us on ESG issues (we have specifically discussed data protection, climate change and the circular economy). ESG is now being considered at the board level, and specific sustainability reporting should follow in the coming months. Having long displayed a healthy obsession with customer service, we interpret these latest conversations as a sign that JD is beginning to develop a more sophisticated understanding of its impact on all stakeholders.”
1. Baidu, Inc. (NASDAQ: BIDU)
Number of Hedge Fund Holders: 89
Baidu, Inc. (NASDAQ: BIDU) is one of the largest technology corporations in the world and is known as the ‘Google of China’ as it operates the most popular internet-based search engine in the Asian country. Like other mega tech firms, Baidu, Inc. (NASDAQ: BIDU) has diversified business beyond the core internet service to artificial intelligence, cloud computing, and internet streaming services. The company is placed first on our list of top Chinese companies on NASDAQ.
Baidu, Inc. (NASDAQ: BIDU) stock was upgraded to Buy from Hold by investment advisory Loop Capital Markets in late March on the back of the company’s entry into the autonomous vehicles market. The company’s shares have returned more than 52% to investors over the past year.
At the end of the first quarter of 2021, 89 hedge funds in the database of Insider Monkey held stakes worth $6.5 billion in Baidu, Inc. (NASDAQ: BIDU), up from 51 in the preceding quarter worth $4.6 billion.
In its Q1 2021 investor letter, Horos Asset Management, an asset management firm, highlighted a few stocks and Baidu, Inc. (NASDAQ: BIDU) was one of them. Here is what the fund said:
“We have also fully exited our stake in Baidu, following their outstanding performance during the period and their lower relative upside potential compared to other investment alternatives, which we will discuss below.
The Chinese technology platform company Baidu has also been held in the portfolios managed by Alejandro, Miguel and myself for several years. During this period, we have seen very high volatility in its share price, which we have taken advantage of to make significant rebalancing moves in our position (in fact, we even sold our entire position once, when we thought the stock’s upside potential was exhausted). After several years of instability, market sentiment turned very positive, putting an end to the historical advertising problems in the healthcare sector, the divestments in O2O (Online-to-Offline) businesses that continued to weigh on the company’s margins, the IPO of part of the iQiyi streaming business (which hid Baidu’s underlying cash generation capacity) and the tough competition from other industry giants such as Tencent and Alibaba, as well as the entry of new players with disruptive business models (ByteDance). At the same time, the company’s recent commitment to electric vehicles contributed even more to this change of narrative. Baidu’s share price rose almost fourfold from the March 2020 lows to all-time highs and reached a valuation where the margin of safety, in our view, was too narrow.”
You can also take a peek at Billionaire Stan Druckenmiller’s Top 10 Stock Picks and Billionaire Julian Robertson On Interest Rates and His Top Stock Picks For 2021.
