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Hong Kong stock market
BusinessMoney

US fund manager piles US$1.2 billion into Alibaba, JD.com, Chinese tech peers in 12 months waiting for policy, valuation payoff

  • San Francisco-based fund accumulated US$1.26 billion worth of stocks including Alibaba, JD.com and Baidu over the past four quarters, 13F filings show
  • Like Singapore’s Temasek, money manager is banking on policy support, cheap valuations in decision to load up securities

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An electronic screen showing the prices of major Chinese tech stocks in Hong Kong in March 2022. Photo: Bloomberg
Cheryl Heng
It may be all doom and gloom for Chinese tech stocks for much of the past year, with Alibaba Group Holding at the forefront of a US$2 trillion sell-off. One US money manager, however, is making a big bet on a rebound.
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San Francisco-based Dodge & Cox spent US$716 million loading up on the American depositary shares of Alibaba, NetEase, JD.com and Baidu and other Chinese peers in the first three months this year, according to its US regulatory filings. That raised its total net purchases to more than US$1.26 billion over a four-quarter sequence.

Its holdings in selected Chinese tech stocks in the 13F filings amounted to US$3.6 billion on March 31. In all, Dodge & Cox listed ownership in 197 stocks globally, valued at US$164.6 billion.

It reflects one of the most aggressive bets at a time when many peers are shunning the securities and the sector because of the growing risk of state intervention in private businesses. Just like Singapore’s Temasek Holdings, the fund manager is banking on cheap valuations and policy support in looking beyond the current bearish streak.

“We believe depressed prices for equities in China present compelling opportunities for long-term investors,” the managers said in a March report to investors. “Recent concerns about ADR issuance and US listings for Chinese companies [are] a red herring – almost all of the fund’s investments in China already have listings in Hong Kong and/or Shanghai and have the ability to adapt.”

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