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Kylin Management’s Top Picks: How Ted Kang Outperforms the Market with Asian, Tech & Financial Stocks

Kylin Management is a New York-based hedge fund founded by Ted Kang, a former Tiger Management employee, in December of 2005. The firm manages approximately $2.5 billion in assets, and last disclosed with the SEC an equity portfolio comprising nine long positions valued at more than $829 million as of December 31. Around 40% of the fund’s equity portfolio is amassed by technology stocks, followed by financial and consumer discretionary companies, which represent some 34% and 24% of the equity portfolio, respectively. According to our calculations, during the fourth quarter, the fund’s five long positions in companies with market caps above $1.0 billion delivered a weighted average return of 14.1%, based on the size of those positions at the beginning of the quarter. For 2015, the firm’s qualifying stock picks posted a weighted average return of 19.8%, making it one of the top-20 best performing funds in our database. In this article, we’ll take a look at Kylin Management’s top picks heading into 2016.

Hedge fund sentiment is an important metric for assessing long-term profitability. At Insider Monkey, we track over 700 hedge funds, whose quarterly 13F filings we analyze to determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks (read more details here).

#5. Inc (ADR) (NYSE:WUBA)

– Shares Owned by Kylin Management as of December 31: 749,968

– Value of Holding as of December 31: $49.46 Million

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Trade (NYSE:WUBA) Now! Inc (ADR) (NYSE:WUBA) represents a new position initiated by Kylin during the fourth quarter . The stock has lost almost 19% in value since the beginning of 2016. A couple of weeks ago, billionaire Chase Coleman‘s Tiger Global Management also disclosed a new position, comprising 8.84 million shares, in the online marketplace operator. Last Thursday, the company posted a fourth quarter net loss of $0.35 per share, considerably better than expected, on revenue of $255.3 million, up by 218.2% year-over-year, and $12.2 million above consensus. However, the strong results were overshadowed by weak guidance for the first quarter and the resignation of co-chairman Mark Yang.

#4. International, Ltd. (ADR) (NASDAQ:CTRP)

– Shares Owned by Kylin Management as of December 31: 1.74 Million

– Value of Holding as of December 31: $80.64 Million

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Despite a 19% reduction in Kylin’s stake over the fourth quarter, International, Ltd. (ADR) (NASDAQ:CTRP) maintained the fourth spot in the fund’s top picks list. Even more bullish on the stock seemed Ken Fisher’s Fisher Asset Management, which last disclosed ownership of 8.83 million shares – after more than having doubled its exposure during the fourth quarter. The opposite was the case of Andreas Halvorsen’s Viking Global, which, on February 16, said it had trimmed its stake from 3.76 million shares to 470,893 shares. The shares have tumbled more than 10% year-to-date. The company will report its fourth quarter financial results on March 17, and analysts currently expect the company to report flat earnings, up from the net loss of $0.13 per share seen a year ago, on revenue of $434.35 million, up by more than 40% year-over-year.

On the next page we will take a look into Kylin Management’s top three picks heading for 2016.

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