5 Big Investors Betting on Chinese Stocks Despite Delisting Risks

Chinese stocks, like JD.com (NASDAQ:JD) and Pinduoduo (NASDAQ:PDD), closed up across the board today. Why? Well, investors learned that the China Securities Regulatory Commission had begun “drafting a framework” to allow the more than 200 Chinese companies listed on U.S. exchanges to stay listed.

delisted stocks concept image of delist Chinese stocks from US stock market
Source: Akarat Phasura / Shutterstock.com

To do this, China must give U.S. regulators access to Chinese audited filings. This is great news for Chinese stocks, as it appears Beijing is willing to comply with U.S. regulators. However, it was also reported that the Chinese government believes that some Chinese companies may be delisted. This is because some Chinese companies may hold sensitive state data that could compromise national security if shared.

The update today was welcome after turmoil on Thursday. Through it all though, some on Wall Street have remained bullish on Chinese stocks. Let’s look at five big investors in that camp.

Investors Betting on Chinese Stocks: JD.com (JD)

Institutional Investor: Tiger Global

Tiger Global is the largest U.S. investor in e-commerce company JD.com, falling only behind Tencent (OTCMKTS:TCEHY) and JD CEO Liu Qiangdong. The hedge fund, run by famed investor Chase Coleman, owns 53.7 million shares of JD stock as of Q4. In addition, Tiger Global has massive assets under management (AUM) of $79 billion. JD is currently Tiger Global’s largest position; the fund first bought shares in 2014.

Nio (NIO)

Institutional Investor: Originalwish

Originalwish is the largest shareholder of Nio (NYSE:NIO), boasting a 174-million-share stake as of Q4. This amounts to 10.4% ownership stake. Investors should note that the fund is beneficially owned by Nio CEO William Li. This is a great sign for investors, as it shows that the CEO is aligned to the company’s success and has skin in the game.

Investors Betting on Chinese Stocks: Pinduoduo (PDD)

Institutional Investor: Banyan Partners

Based on available Q4 data, Banyan Partners owns the largest stake in PDD stock, with a 318-million-share position. This amounts to a 6.4% ownership stake. Pinduoduo founder Colin Huang, Tencent, and Qubit GP are all reported as having a larger stake. However, these three entities have not yet filed a position update as of Q4. Banyan may have been wary of delisting risks, as the fund reduced its position by 22.69 million shares during Q4.

Baidu (BIDU)

Institutional Investor: BlackRock

As of Q4, BlackRock (NYSE:BLK) had amassed a 12.6-million-share position in Baidu (NASDAQ:BIDU). The share count amounts to an ownership stake of 4.53%. Like Banyan Partners, BlackRock may have been wary of delisting risks. The $3.9 trillion investment firm sold just over 1 million shares of BIDU stock during Q4.

However, BlackRock is known as a long-term investor and holds each position in its portfolio for an average of 23.43 quarters.

Investors Betting on Chinese Stocks: DiDi (DIDI)

Institutional Investor: CEO Wei Cheng

DiDi Global (NYSE:DIDI) has had a rough time since debuting on U.S. markets, down more than 80%. However, DiDi CEO Wei Cheng is the largest shareholder in his own company as of Q4. Cheng last reported a 83-million-share position, which accounts for 1.9% of all shares outstanding. It should also be noted that Uber (NYSE:UBER) owns a 143-million-share stake in the Chinese ride-hailing company. However, Uber has not yet reported a Q4 position update.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.


Article printed from InvestorPlace Media, https://investorplace.com/2022/04/5-big-investors-betting-on-chinese-stocks-despite-delisting-risks/.

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