Jiang Jinzhi "takes over" Buffett, "regrets" PDD

The most experienced mainland buyer of US stocks, Jinglin Assets, recently disclosed the latest traces of overseas investments!

The latest data shows that as of mid-2024, the market value of this billion-dollar private equity giant's US stock holdings reached USD 3.795 billion, equivalent to a scale of RMB 27 billion, with a quarterly growth rate of 18%.

During this quarter, Jinglin made a significant increase in holdings in the listed platform Pinduoduo owned by China's new richest man, Huang Zheng, with the holdings of this stock approaching nearly 20% of Jinglin's total US stock portfolio assets.

Moreover, Jinglin has held this stock as the largest heavy position in its portfolio for six out of the past seven quarters, fully demonstrating the institution's attention to this stock.

What other investment changes has Jinglin made?

What new investment ideas do founder Jiang Jinzhi and the team have?

(The US stock portfolio of Jinglin Assets mentioned in this article is the position invested by the private equity through its Hong Kong subsidiary, and does not include US stock positions of mainland Chinese entities.)

Core Allocation

ZiShiTang found that Jinglin has adhered to the "tradition" of subjective stock selection strategy, with core positions in key stocks, with the top six stocks accounting for as much as 60% of the investment portfolio by market value.

In other words, the fluctuations in the performance of these six stocks almost determine the overall performance of the investment portfolio.

The assets in this core allocation are: Pinduoduo (18.24%), Facebook (15.44%), TSMC (12.45%), Microsoft (10.67%), NetEase (9.62%), Manbang Group (5.72%).

Among them, Pinduoduo is Jinglin's top heavy position. Since the end of the fourth quarter of 2022, this e-commerce platform has become the top holding in Jinglin Assets' US stock portfolio.

Moreover, in the second quarter of 2024, Jinglin made a significant increase in holdings, with a quarter-on-quarter increase of up to 43%.

External speculation suggests that Jinglin, which values the intrinsic value of companies, may have increased its holdings in Pinduoduo when the stock experienced a significant pullback in June this year. The stock price surged earlier in the year, then rapidly declined after the end of May, with a drop of over ten percentage points by the end of June.

In addition to the above six stocks, the top ten heavy positions also include: New Oriental, Futu Holdings, food delivery platform DoorDash, NVIDIA.

Chinese Concept Stocks "Big Buyers"

For a hedge fund with a subjective long strategy, if the percentage of shares held in a listed company exceeds 2%, it can be considered a significant "big buyer".

According to Whalewisdom's penetration of Jinglin's US stock holdings, four Chinese concept stocks have become key holdings for Jinglin.

Specifically, these include Manbang Group, Futu Holdings, TAL Education, 360 DigiTech, with the first two stocks ranking among Jinglin's top ten holdings.

This may indicate Jinglin's strategic thinking in the allocation of the above-mentioned Chinese concept stocks In addition, Jinglin significantly increased its holdings in Ke Holdings (+326%), Alibaba Group (+323%), Ctrip (+126%), and NetEase (+49%).

Reduced Holdings in Semiconductors

Of note: Jinglin made significant adjustments to its investments in the hot semiconductor sector, indicating a cooling-off trend.

In terms of reduced holdings, the top targets sold off were: ASML Semiconductor ETF, Micron Technology, and NVIDIA, with quarter-on-quarter reductions of 70%, 44%, and 42% respectively.

Taking ASML Semiconductor ETF as an example, Jinglin's reduction was timely, reducing its holdings near the relative high point in the past year, and the net asset value of this ETF rapidly declined after mid-July this year. In addition, NVIDIA saw a rapid market capitalization evaporation after a more than 60% increase in the second quarter of this year, with a sharp decline in value after crossing July.

Another popular stock that Jinglin made significant adjustments to is Tesla, with a reduction of over 70% quarter-on-quarter. The company's stock price saw a rapid increase of up to 60% from the end of April to the end of June this year, but quickly turned around and dropped rapidly after mid-July.

"Taking Over" Buffett?

Capital Watch found that Jinglin Asset Management made a "repurchase" of individual "big stocks" in the U.S. stock market.

The most typical example is Apple Inc.

Many investors must have seen the "stock god" Buffett's actions in the second quarter: halving the position in Apple, which inevitably led to a considerable number of investors picking up these chips.

Jinglin is one of them. This private equity firm repositioned Apple in the second quarter, buying 165,600 shares, with a market value close to 35 million yuan.

Another example is Amazon, as Jinglin reacquired 22,400 shares of this leading online retailer.

Other newly added listed companies include: Li Auto, Daqo New Energy, Petrobras, ALB Chemicals, and UnitedHealth Group.

Liquidation of JD.com

In the second quarter of 2024, Jinglin completely liquidated six stocks, including the well-known Chinese concept stock JD.com.

In the previous quarter, Jinglin held 170,000 shares of JD.com. Going back two years, JD.com was once Jinglin's second largest heavy stock, but since then, Jinglin has gradually reduced its holdings in this platform-based company.

In addition, Jinglin also completely liquidated a former core holding, namely MongoDB (a universal database platform provider), AbbVie biopharmaceutical company, AMD semiconductor, and Johnson & Johnson.

Jinglin's Latest Strategy

Information from sources revealed that Jinglin Asset Management had communicated with high-net-worth clients before, mentioning the attractive prospects of Chinese stocks.

Firstly, the reversal of the yen carry trade, combined with concerns about a U.S. recession, triggered the unwinding of the yen carry trade and led to significant volatility in equity assets, causing market stampedes Secondly, due to the fact that there are fewer Japanese yen carry trade investors investing in the A-share or Hong Kong stock markets, the short-term fluctuations in overseas markets have a relatively small impact on the Chinese market.

Thirdly, overseas institutions are still significantly underweight Chinese assets, focusing on the rebalancing of overseas institutional positions.

Fourthly, Chinese stocks still have a significant valuation discount compared to emerging markets, making them quite attractive