Steven Romick just loaded up on these China stocks

Prominent American fund manager Steven Romick has disclosed his share portfolio for the third quarter of 2021, and it makes for interesting reading.

Romick, whose Los Angeles-based firm First Pacific Advisors manages $26 billion in assets, has done what few have been bold enough to do and bet big on Chinese technology stocks.

It’s a sign that contrarian investors (of which Romick is one) think the Chinese government’s crackdown on tech companies will be short-lived and valuations will rise significantly from current levels.

Here are the stocks Romick is expecting to rebound:

Baidu Inc (NASDAQ: BIDU)

Steven Romick added 3.4 million shares of Baidu Inc, increasing his fund’s holdings by a massive 767.85% on the previous quarter.

Baidu, a multinational internet and artificial intelligence company, has suffered a 30% hit to its share price since the end of 2020.

Like many Chinese stocks, Baidu has been hit hard by the Chinese Government’s regulatory crackdown and fears Chinese real estate giant Evergrande could collapse under mounting debt.

Romick will be banking on those issues being overcome and strong revenue growth lifting the share price rise in coming months.

It should be noted that Romick also added more Baidu shares in the second quarter of 2021, albeit a much smaller amount.

Alibaba Group Holdings (NYSE: BABA)

Steven Romick increased his fund’s exposure to Alibaba Group Holdings by 4.9 million shares in the third quarter of 2021.

Alibaba Group, an e-commerce and retail giant, has enjoyed a minor resurgence in recent days, but overall has been a victim of Chinese regulators in 2021.

Over the past 12 months, its share price has fallen from US$37.80 to US$20.70.

Romick increased his fund’s exposure to Alibaba by 729.92% in the third quarter of 2021, having also added a smaller amount of shares the previous quarter.

Prosus NV (OTCMKTS: PROSF)

Prosus NV is not a Chinese company, but does have significant ownership of Tencent (HKG: 0700), which is a Chinese conglomerate that controls the majority of China’s music services and instant messengers Tencent QQ and WeChat.

Steven Romick increased his fund’s holdings of Prosus shares by 149.82% in the third quarter of 2021, to now own a total of 172,286 shares.

Tencent shares have endured a turbulent 12 months, with the price falling from US$98.94 in February of this year to its current price of $63.70.

Screen Shot 2021 10 16 at 5.28.07 pm 1 Steven Romick
Stock buys for Steve Romick’s FPA Crescent Fund in Q3 2021. (Source: Dataroma.com)

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