Regulatory records showed that large Asian hedge funds acquired Chinese education enterprises and U.S. tech giants projected to benefit from ChatGPT and other artificial intelligence systems in the first quarter of 2023.
New Oriental and TAL Education (TAL.N), which survived China’s nearly two-year crackdown on after-school education, attracted investors.
Hong Kong-based Greenwoods Asset Management purchased 3.7 million of New Oriental’s U.S.-listed American depositary receipts (ADRs), making it the fund’s second-largest holding. Greenwoods also bought 2.2 million TAL Education shares.
FengHe of Singapore also wanted TAL. John Wu’s fund increased its major tutoring investment by 2.1 million shares. New Oriental’s second-largest U.S. exposure yielded modest profit during the quarter.
After Beijing banned K-12 private tutoring, New Oriental and TAL shares fell over 90%. However, after China relaxed COVID-19 regulations in October, two stocks doubled.
Analysts say education enterprises stand out in China’s market conditions because parents invest in their children’s future and spend more on education.
“The past quarter was the turning point for both New Oriental and TAL, which offered very positive guidance for the next quarter and FY24,” BOCI research education analyst Tina Li wrote this week.
Reuters found that Tairen Capital, Dantai Capital, Keystone Investors, and CloudAlpha Capital were active buyers of U.S.-listed Chinese education companies.
By March 31, investors owned U.S.-listed stocks, revealing investment trends.
US AI giants were another first-quarter consensus buy.
Trivest Advisors, which manages over $3 billion, bought 800,000 Nvidia Corp (NVDA.O) shares to develop a stake in the world’s largest AI chip designer. In addition, the Hong Kong fund notably added Meta Platforms Inc (META.O) and Microsoft Corp (MSFT.O). Meta, Microsoft, and Nvidia were its top three U.S.-listed AI bets by March.
Greenwoods bought Nvidia, Microsoft, and Alphabet Inc. (GOOGL.O) in the quarter. At a March investor seminar, Greenwoods portfolio manager Jin Meiqiao said ChatGPT is a revolutionary product, and the fund has been allocated to infrastructure.
According to Linus Yip, chief strategist at First Shanghai Securities, fund managers are looking for future investment themes and have higher convictions in U.S. AI domains in terms of technology superiority and scenarios of applications.
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