In this article, we present the list of the 1o stocks that billionaire Zhang Lei is selling off. You can skip our comprehensive analysis of Hillhouse Capital’s history, investment philosophy, and hedge fund performance, and go directly to Chinese Billionaire Zhang Lei is Selling These 5 Stocks.
Zhang Lei is the CEO and founder of Hillhouse Capital Management. Zhang graduated from Yale University with an MBA and an MA in international relations. Zhang is vice chairman of the board of trustees at Beijing’s Renmin University, where he received his bachelor’s degree. Zhang has a net worth of $3 billion as of September 26, according to Forbes. He had a modest start, founding his company in 2005 with a $20 million grant from Yale University, his alma school. Zhang purposefully stays out of the spotlight despite the fact that Hillhouse Capital currently oversees assets worth more than $63 billion. In addition to investing money, Hillhouse also contributes resources and industry knowledge to produce solid returns on investments over the long run. The fund searches for businesses that are finding innovative and long-lasting solutions to difficult problems when investing in growth possibilities. Hillhouse is the largest private equity company doing business in Asia. It has offices in Beijing, Shanghai, Hong Kong, and Singapore. In addition, Hillhouse has offices abroad in London and New York. Over 350 investment professionals from top universities around the world work for the private equity firm.
In June this year, after the Hillhouse portfolio was hit by plunging tech stocks, there were rumors about widespread layoffs by the fund. However, the fund categorically denied the rumors. According to South China Morning Post, Hillhouse Capital has denied that it is engaging in a large-scale layoffs. The company, which made early investments in Tencent, Meituan, and JD.com, is one of the largest investors in China’s technology sector.
On Wednesday, September 21, Hillhouse Capital founder Zhang Lei, expressed his views at The BEYOND Expo 2022, which opened online on BEYOND Metaverse. The Expo, which is the biggest and most significant tech event in Asia, will feature more than 40 speeches and panel discussions where executives and subject-matter experts from many industries delve deeply into issues like consumer tech, health tech, global investments, sustainability, and Web3. According to Zhang, investing in ESG has emerged as a significant trend in the era of sustainable development as more and more individuals pay attention to long-term investments. Zhang added that sustainable investing calls for long-term funding to support exceptional businesses, in addition to investment institutions taking ESG into account in their investment aims. The carbon management department will eventually develop into a fundamentally functional department, similar to the finance and HR departments. According to Zhang, we must give the issue of sustainable development our full attention and set new standards for talent.
Hillhouse Capital is a hedge fund with 19 clients and discretionary assets under management of $63.691 billion. The fund itself states that it focuses on the media, consumer, industrial, and commodity-related sectors. Hillhouse Capital Management is one of the major players in Asia. Despite keeping a healthy balance of conventional bets, Hillhouse Capital makes several investments that could be considered contrarian. Their last reported 13F filing for Q2 2022 included $4.665 billion in managed 13F securities and a top 10 holdings concentration of 73.2%. For Q2, the healthcare sector comprises 32.03% of its 13F portfolio. Hillhouse Capital’s largest holding is BeiGene Ltd ADR, with shares held of 5.472 million. The hedge fund has undertaken portfolio rebalance during Q2 by purchasing 12 new stocks and increasing its share in 8 stocks. The fund also sold 12 stocks and reduced its holding in 9 stocks. Some of the top picks of the fund included Salesforce Inc (NYSE:CRM), JD.Com Inc (NASDAQ:JD) and DoorDash Inc (NYSE:DASH). However, in this article, our focus would be the stocks dumped by the fund during the second quarter.
Our Methodology
The stocks mentioned in the article are taken from Hillhouse Capital’s 13F filings as of the second quarter of 2022. All these stocks were completely dumped by Hillhouse Capital in the second quarter.
Chinese Billionaire Zhang Lei is Selling These 10 Stocks
10. ZTO Express (Cayman) Inc. (NYSE:ZTO)
Number of Hedge Fund Holders as of Q2 2022: 17
In China, express delivery and other value-added logistics services are offered by ZTO Express (Cayman) Inc. (NYSE:ZTO). The business reported earnings for the second quarter of 2022 on August 17, posting earnings per share of $0.33, surpassing market expectations by $0.06. The revenue for the time period was $1.29 billion, exceeding expert expectations by $30 million and increasing by more than 14% over the same time last year.
On August 25, Morgan Stanley analyst Qianlei Fan predicted that the ZTO Express (Cayman) Inc. (NYSE:ZTO) share price would increase in absolute terms over the ensuing 60 days. The analyst has an Overweight rating and a $38.80 price target on ZTO shares.
Platinum Asset Management, an Australian investment company with 15 million shares valued at more than $420 million, is the largest shareholder in ZTO Express (Cayman) Inc. (NYSE:ZTO) among the hedge funds Insider Monkey is monitoring. Before selling all of its shares during Q2, Hillhouse Capital Management held 200,000 shares of ZTO Express (Cayman) Inc. (NYSE:ZTO) worth roughly $5 million.
09. TScan Therapeutics, Inc. (NASDAQ:TCRX)
Number of Hedge Fund Holders as of Q2 2022: 6
Julian Baker and Felix Baker Baker Bros. Advisors is the largest shareholder of TScan Therapeutics, Inc. (NASDAQ:TCRX) during Q2, holding 2.78 million of its shares worth $8.75 million. Before dumping its entire stake, Hillhouse Capital Management held 669,513 shares of TScan Therapeutics, Inc. (NASDAQ:TCRX) valued at $1.875 million. A total of 6 hedge funds out of the 895 tracked by Insider Monkey are holding a stake in the stock during Q2 having a total value of $14.049 million.
TScan Therapeutics, Inc. (NASDAQ:TCRX) had $125.6 million in cash and cash equivalents as of June 30, 2022, excluding $5.0 million in restricted funds. The company anticipates that its present cash and cash equivalents will be enough to cover its operating costs and capital expenditure needs through 2024, based on its current operating plans.
While Hillhouse dumped TCRX, it is still holding onto major growth stocks like Salesforce Inc (NYSE:CRM), JD.Com Inc (NASDAQ:JD) and DoorDash Inc (NYSE:DASH).
08. Tango Therapeutics, Inc. (NASDAQ:TNGX)
Number of Hedge Fund Holders as of Q2 2022: 20
Based in Cambridge, Massachusetts, Tango Therapeutics, Inc. (NASDAQ:TNGX) was established in 2017. Tango Therapeutics, Inc. (NASDAQ:TNGX) is a biotechnology business that finds and creates medicines to cure cancer.
On August 10, Tango Therapeutics, Inc. (NASDAQ:TNGX) reported its quarterly results. For Q2, it reported an EPS of $0.28 as compared to $0.9 during Q2 in the prior year and revenue of $5.8 million as compared to $18.2 million last year. Both EPS and revenue figures beat Wall Street expectations for Q2. The stock fell 70.29% year to date.
According to Insider Monkey’s Q2 data, Tango Therapeutics, Inc. (NASDAQ:TNGX) was found in the public stock portfolios of 20 hedge funds, with collective stakes in the company worth $101.831 million. Hillhouse Capital Management disposed off 882,088 shares of Tango Therapeutics, Inc. (NASDAQ:TNGX) during Q2, worth $6.68 million.
07. Mereo BioPharma Group plc (NASDAQ:MREO)
Number of Hedge Fund Holders as of Q2 2022: 17
United Kingdom-based Mereo BioPharma Group plc (NASDAQ:MREO) was established in 2015 and is based in London. Mereo BioPharma Group plc (NASDAQ:MREO) creates and markets medications for the treatment of oncology and rare diseases in the UK and abroad. On August 12, analyst Kristen Kluska of Cantor Fitzgerald began covering Mereo BioPharma Group plc (NASDAQ:MREO) with an Overweight rating and a $4 price target.
During Q2, Hillhouse Capital Management dumped its entire stake in Mereo BioPharma Group plc (NASDAQ:MREO) of 2.97 million shares worth $3.33 million. Hedge fund sentiment around Mereo BioPharma Group plc (NASDAQ:MREO) has also decreased in the second quarter of 2022. At the end of the second quarter of 2022, 17 hedge funds in the database of Insider Monkey held stakes worth $64.05 million in Mereo BioPharma Group plc (NASDAQ:MREO), compared to 20 in the preceding quarter worth $83.415 million.
06. Li Auto Inc. (NASDAQ:LI)
Number of Hedge Fund Holders as of Q2 2022: 28
Li Auto Inc. (NASDAQ:LI) was founded in 2015 and is headquartered in Beijing, China. The company was formerly known as Leading Ideal Inc. and changed its name to Li Auto Inc. in July 2020. Li Auto Inc. (NASDAQ:LI), through its subsidiaries, designs, develops, manufactures, and sells energy-efficient vehicles in the People’s Republic of China.
On September 26, Li Auto Inc. (NASDAQ:LI) provided an updated third-quarter delivery outlook. The company has revised its previous vehicle delivery outlook from between 27,000 and 29,000 units to an estimated 25,500 vehicles for the third quarter. The supply chain constraint directly led to the revision, but overall demand for the company’s vehicles is still strong. To clear the bottleneck and boost output, the company has decided to keep working closely with its supply chain partners.
According to Insider Monkey’s data, 28 hedge funds were bullish on Li Auto Inc. (NASDAQ:LI) at the end of Q2, 2022, with collective stakes worth $1.40 billion. Chase Coleman and Feroz Dewan’s Tiger Global Management LLC is the largest shareholder of Li Auto Inc. (NASDAQ:LI), holding 12.79 million of its shares worth $490 million. Hillhouse Capital exited its entire stake during Q2 of Li Auto Inc. (NASDAQ:LI), comprising 2.496 million shares worth roughly $64.43 million.
Tech and growth stocks like Li Auto, Salesforce Inc (NYSE:CRM), JD.Com Inc (NASDAQ:JD) and DoorDash Inc (NYSE:DASH) are taking a beating in 2022.
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Disclosure: None. Chinese Billionaire Zhang Lei is Selling These 10 Stocks is originally published on Insider Monkey.