Tiger Pacific Unloads Several Chinese Favorites

In SINA Corp (NASDAQ:SINA), Tiger Pacific initiated a stake containing 124,294 shares worth $14.25 million between July and September. SINA Corp (NASDAQ:SINA) is an online media company that operates the popular Chinese social media platform Weibo. Its stock has surged by over 73% since the beginning of the year, on the back of strong financial results, growing ad revenue (which advanced by 44% on the year to $295.2 million in the second quarter) and alongside its peers in the Chinese Internet sector (for example, the KraneShares CSI China Internet ETF (NYSEARCA:KWEB), which offers exposure to Chinese companies operating in the Internet sector, is 63.5% in the green year-to-date). Therefore, given SINA Corp (NASDAQ:SINA)’s strong financial performance and the overall bullish sentiment surrounding Chinese Internet companies, Tiger Pacific probably considers that SINA Corp (NASDAQ:SINA) represents a good investment. During the third quarter, the fund added a bunch of other Internet-related stocks to its equity portfolio, including JD.Com Inc (ADR) (NASDAQ:JD) and Baidu Inc (ADR) (NASDAQ:BIDU), and it also owns a stake in Alibaba Group Holding Ltd (NYSE:BABA). These four companies are among Tiger Pacific’s top five positions in terms of value as of the end of September.

On the other hand, in Tarena International Inc (ADR) (NASDAQ:TEDU), Tiger Pacific sold its entire stake, which had previously contained 422,039 shares. The stake was added to the fund’s equity portfolio during the first quarter and the stock had had a decent run until August 22, having gained over 24%. On August 22, the stock lost over 24% as Tarena International Inc (ADR) (NASDAQ:TEDU) had posted second-quarter EPS of RMB 0.63 ($0.09), missing the consensus estimate by $0.07, the day before. Moreover, Tarena International Inc (ADR) (NASDAQ:TEDU) provided third-quarter revenue outlook of $83.65 million to $86.21 million and said it expects full-year revenue between $289.37 million and $301.43 million. After the earnings miss, Nomura downgraded the stock to ‘Neutral’ from ‘Buy’ and cut the price target to $19.50 from $20.50. The analysts said they expect slower revenue recognition, higher R&D costs and sustained investment to affect the company’s margins.

On the next page, we will discuss three other companies in which Tiger Pacific disposed of its positions during the third quarter.