A recent report from Goldman Sachs reveals that U.S. hedge funds have significantly increased their investments in Chinese companies listed in the U.S. during the third quarter. Among these, JD.com (JD, Financial) and GDS Holdings (GDS) were the most popular choices. The exposure of U.S. hedge funds to Chinese stocks has reached its highest level since the end of 2021.
According to the report, approximately 25% of U.S. long-short equity funds held at least one Chinese stock by the beginning of the fourth quarter. JD.com emerged as the most favored stock, attracting 47 hedge funds, with 26 of them increasing their holdings in the third quarter. Following JD.com, GDS Holdings and hotel chain Atour Group also saw increased interest, reflecting investor optimism about consumer recovery and growing demand for artificial intelligence.
The 13-F filings submitted to regulators show that Appaloosa Management, led by billionaire David Tepper (Trades, Portfolio), increased its investment in JD.com by 69% and more than doubled its stake in Pinduoduo during the three months ending in September. Additionally, Scion Asset Management, headed by "The Big Short" figure Michael Burry (Trades, Portfolio), doubled its long position in JD.com in the third quarter. However, Burry also increased his put options on the same stock to mitigate potential losses.
