China robotaxis and Indian pharma were among the hedge fund’s top picks at Sohn Hong Kong. The leading choices at this year’s conference were geographically more diverse than in 2024, as investors sought to broaden their exposure to counter-tariff uncertainties and market volatility.
San Francisco-based Flight Deck Capital saw upside potential in Chinese search engine giant Baidu, betting on its fast-growing auto-driving business. Flight Deck founder and managing partner Jay Kah said Baidu’s Apollo Go, similar to Google’s self-driving unit Waymo, was the only robo-taxi player in China that was not dependent on the capital markets to scale.
He also expected China’s taxi and ride-share industry to grow to around $237B by 2034, with Apollo taking a 15% market share. However, the market gave zero valuation to that segment and Baidu’s cloud business.
Hong Kong’s Apeiron Capital pitched Chinese ride-hailing company DiDi Global, citing its improving margin at home and fast market share growth in Latin America. Triata Capital was also upbeat about the Chinese discount e-commerce player PDD, the owner of Temu. Triata CIO Sean Ho referred to Temu’s monthly active users, saying one statistic that many people did not know was that their MAU was currently bigger than Amazon’s.
Investors set their focus on the healthcare and security sectors
BREAKING: China robotaxis and Indian pharma emerge as top hedge fund picks at Sohn Hong Kong conference. 🚗💊
Singapore’s Arisaig Partners favors MedPlus Health Services, a pharmacy chain in India, as its private label products strengthened its low-price proposition, widening the gap with competitors.
India-based hedge fund startup Panvira Management was bullish on Piramal Pharma, a contract development and manufacturing organization (CDMO), expecting its growth to accelerate to high teens and to benefit from tax rate normalization.
“Inflation is lower, the government is focusing on the middle class, and consumer spending is coming off a low base. I simply believe this is the time when the consumer space in general will do better.”
– Vatsal Mody, partner and head of India research at Arisaig Partners
Other emerging hedge funds like Korea-focused fund MY.Alpha Management and Hong Kong’s Frontline Global Management were keen on opportunities in the security sector driven by geopolitical conflicts. MY.Alpha Management’s Jon Jhun said Korea dominated the ex-Russia and ex-China nuclear supply chain.
Jhun chose Hyundai Engineering & Construction, which engages in nuclear plant engineering, procurement, and construction (EPC). Frontline Global Management picked Spanish defense firm Indra Sistemas, believing the firm would win more European contracts.
Japan companies hog the spotlight in 2024 as hedge funds tout top Asia picks
Asset managers emphasized Japan Inc.’s efforts to improve capital efficiency, as Japanese companies in outsourcing, robotics, and the drug sector were in favor at the 2024 Sohn Hong Kong Investment Leaders Conference. Last year’s event invited 14 funds to pitch their top investment ideas, but only two funds pitched ideas on Chinese stocks, down from seven in 2023.
David Mitchinson, founding partner at Zennor Asset Management, said the biggest opportunities in the world’s third-largest economy were in companies with “improving stories” or those that strengthened corporate governance rather than firms that were already excellent. He recommended Transcosmos, which was likely to benefit from Japan’s tight labor market.
Seth Fischer, founder of activist fund Oasis Management, said Japan’s government continued to raise the bar for management, so investors who engaged with Japanese companies had higher chances of winning. Fischer also said the activist fund saw upside potential for Kobayashi Pharmaceutical, a drugmaker that recalled a health supplement after five deaths possibly linked to the product occurred.
Hong Kong’s Tybourne Capital Management placed its bet on Samsung Electronics, claiming that the tech giant could grab the global memory chip market share from rival SK Hynix. CloudAlpha Capital Management, also from Hong Kong, was bullish on South Korea’s HD Hyundai Electric, citing AI-linked demand for electricity equipment.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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