Fang Zheng’s Keywise Capital Management is a China-based hedge fund focused primarily on investing in companies from the Greater China Markets, such as Hong Kong, Shanghai, Taiwan and Singapore. Recently, the fund disclosed its long equity positions as of June 30 2014. By the end of the second quarter, the fund held an equity portfolio valued at almost half a billion dollars. Most of its stocks (85%) belong to the technology sector, while the remaining ones (15%) are services stocks.
Between April and June, Keywise started 2 new stock positions – 58.com Inc (ADR) (NYSE:WUBA) and JD.Com Inc JD.Com Inc (ADR)(ADR) (NASDAQ:JD), increased its stakes in six of its preexisting holdings, and sold out of seven of them, including the one in YY Inc (ADR) (NASDAQ:YY), which accounted for 24% of the fund’s first quarter portfolio. Below, we will look into the fund’s top picks for the second quarter of 2014.
The first position in Keywise’s this list – VipshopHoldings Ltd – ADR (NYSE:VIPS), remained unchanged in rank over the quarter, although the fund decreased its exposure by 22%. The fund now owns 563,579 shares (worth more than $105 million) of this $12 billion market cap Chinese online discount retailer. The stake at VipshopHoldings Ltd – ADR (NYSE:VIPS) accounts for roughly 22% of the fund’s total equity portfolio.
Tiger Global Management’s star fund Tiger Global, managed by Feroz Dewan, also seems to feel bullish about VipshopHoldings Ltd – ADR (NYSE:VIPS), holding more than 2.23 million shares. The stock is up 154.4% year-to-date, but analysts expect it to halt at this point for a while.
The second largest position in Keywise’s equity portfolio is occupied by one of the newcomers: 58.com Inc (ADR) (NYSE:WUBA), a $4.34 billion market cap Chinese online marketplace. The fund now owns a $96 million stake at 58.com Inc (ADR) (NYSE:WUBA), which contains 1.78 million shares of the company, and accounts for almost 20% of its total equity portfolio’s value.
Once again, Tiger Global can be counted amongst 58.com Inc (ADR) (NYSE:WUBA)’s largest hedge fund investors, with 1.26 million shares –disclosed by the end of the first quarter of 2014.
Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), an $8.8 billion market cap Chinese travel services provider, escalated from the ninth position in the first quarter, to the third spot in the second quarter, after the fund added 10,340 shares to its holdings. Keywise now owns more than 1.12 million shares of Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), valued at more than $72 million –which represents almost 15% of the fund’s total equity portfolio. The stock has gained 36.55% year-to-date, and 32.4% over the second quarter of the year.
Other major hedge funds betting on Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) are Lei Zhang’s Hillhouse Capital Management and Philippe Laffont’s Coatue Management, which last disclosed (by the end of the first quarter) ownership of 3.75 million shares and 3.61 million shares, respectively.
The fourth largest bet was placed on Canadian Solar Inc. (NASDAQ:CSIQ). The fund increased its exposure to the company by 731% over the quarter and now owns 1.98 million shares of Canadian Solar Inc. (NASDAQ:CSIQ), worth almost $62 million.
In the fifth place, same as in the previous quarter, is Himax Technologies, Inc. (ADR) (NASDAQ:HIMX), a small-cap semiconductor developer. Keywise boosted its wage in the company by 68% between April and June, and now owns about 7.05 million shares of Himax Technologies, Inc. (ADR) (NASDAQ:HIMX), with a value of $48 million.
Another big hedge fund with stakes in both Canadian Solar Inc. (NASDAQ:CSIQ) and Himax Technologies, Inc. (ADR) (NASDAQ:HIMX) is Steven Cohen’s former SAC Capital, which last disclosed ownership of approximately $4 million in stock in each of these companies.
Disclosure: Javier Hasse holds no position in any stocks or funds mentioned.