(Bloomberg) — Michael Varley's investment firm doubled its bet on JD.com and Alibaba Group Holding in the first quarter, when Chinese stocks bottomed out.
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According to the latest 13F filing, JD.com became Scion Asset Management's largest holding after increasing its stake in the e-commerce operator by 80% during the period. Alibaba added another 50,000 shares, taking the second-largest position with a total value of about $9 million.
Barry, who became famous for his book The Big Short, is returning to Chinese tech stocks after exiting them at some point in 2023. The bet appears to be paying off, with efforts by Chinese policymakers to stave off defeat and signs of improvement. Rising profits will help restore a turbulent market. Jingtocom's U.S.-listed shares have risen more than 16% this year, while Alibaba's has gained about 4.5%.
Baidu's American Depositary Receipt balance, to which Berry added a small $4.2 million stake, is still down 7% this year.
Global investors are cautiously returning to China's stock market as cheap valuations and policy support from the Chinese government have sent many stock benchmarks into a bull market. Sustained growth in profits is seen as essential for the economic recovery to continue. Tencent Holdings beat profit expectations, while Alibaba reported lower-than-expected profitability.
Read: Tencent stock outperforms Alibaba despite earnings divergence
Barry made a name for himself by predicting the 2008 U.S. housing crash, but in recent years he has repeatedly entered and exited Chinese tech investments. In late 2022, as China was emerging from the pandemic, he bought up New York-listed Alibaba and Jingtocom shares. He eventually closed the position in the second quarter of 2023, but reopened it a few months later.
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