China appeared to be slightly struggling after the Evergrande debacle as depicted through its lethargic economy. The effects of the 2020 lockdowns are felt across weaker GDP, dormant stock market, and soaring unemployment. Nonetheless, some investors did not share the view.
David Tepper, founder of Appaloosa Management, is one among many who still bet on China. His recent filings showed Alibaba as his top holding which now accounts for 12% of USD 6.2 billion equity held by Appaloosa. In addition to Alibaba, JD and KE Holdings are also major parts of Appaloosa’s portfolio.
Michael Burry, founder of Scion Capital, also holds Alibaba as his largest yet, in addition to other Chinese tech stocks. Given the foregoing, BCA Research, an investment research firm in Canada, also promoted China’s onshore-listed to overweight. Meanwhile, George Boubouras, Managing Director of K2 Asset Management, puts his money on China’s emerging markets.
Furthermore, the tourism industry, according to the Chinese Ministry of Transport, has also encountered a leap in summer during which China has recorded around 872 million trips, a 6.2% upswing from last year. According to Song Zhiyong of the Civil Aviation Administration, Beijing is projecting air travel to be record-higher than 619 million trips in 2023.
“This is what’s driving support on China stocks in the near term, at least for the end of this year,” said Eric Lin, Head of Greater China Research, noting a 10% upside of MSCI China price target anticipated by his team for the rest of 2024.
