British ultra-long-term tech stock investment giant Parky filed a 2-quarter U.S. stock position report with the U.S. Securities and Exchange Commission on August 8th. The report shows that as of the end of the 2nd quarter, the market value of Berkey's U.S. stock portfolio position was $97.508 billion, compared with $142.654 billion at the end of the previous quarter, a shrinkage of 31.65%. in the 2nd quarter, the portfolio bought 28 new stocks, increased holdings of 113 stocks, liquidated 33 stocks, and reduced holdings of 186 stocks. The top 10 long positions accounted for 35.7 percent of the total.
Berkeley's $454.9 billion under management at the end of 2021 is roughly equivalent to 307.56 billion yuan.
As an early investor in Alibaba, the Berkey U.S. Equity Portfolio liquidated Alibaba in the 2nd quarter. What's going on, let's find out.
Adding a position in Azalea
At the end of the 2Q, the top 10 long positions in Berkey's U.S. Equity Portfolio were Modena, Tesla, Amazon, Ingenium, Free Markets, Spotify, Nvidia, Azalea, Advertising Autonomous Services Platform, and Weppenstein Medical. Of those, Berkey increased its holdings in Free Market, Spotify, and Azera Motors by 7%, 12%, and 8%, respectively. in the 2nd quarter, Berkey only increased its holdings in these three of its top 10 positions.
In particular, it added 7,980,518 shares to Azera Motors. As of the end of the 2Q, Azera Motors ranked as the 8th largest position in Parky's U.S. equity portfolio.
Azalea has now rebounded more than 50% from its May 11 stage lows, though the stock is down 39.74% since 2022.
As of Aug. 8, Azera had 733 institutional investors. That includes Parky, as well as global custody trio BlackRock, Vanguard Pilot and State Street. Recently, Azera has made further plans for the development of the European market. According to Smart Car Pie, Azera announced that it will soon put into operation an electric vehicle exchange station in Hungary, which is another important step for the company to enter the European market.
Data shows that Azalea launched the Azalea ES8 model in Norway in 2021 to enter the European market. The first power exchange station was completed in early 2022, and now this company is focused on expanding in geographies such as Germany, the Netherlands, Sweden and Denmark later this year. In China, Azera has more than 1,000 power exchange stations (1,047 as of July 31, 2022***) with more than 10 million cumulative uses. Azera has plans to build more than 4,000 power exchange stations by the end of 2025, including about 1,000 abroad.
Liquidating Alibaba ADRs
In the second quarter, the Berkeley American Equity Portfolio liquidated a portion of its stocks including Alibaba, Sohu and Jingdong, among other Chinese stocks. in the first quarter of 2022, the Berkeley American Equity Portfolio began to reduce its holdings of Alibaba ADRs in a big way. at that time, the company did not respond to reporters' inquiries whether it was to reduce its holdings of Alibaba Inc. or exchanging Alibaba ADRs for Hong Kong shares. At present, Alibaba and Jingdong are both listed in Hong Kong.
A few days ago, Alibaba Group announced that the Board of Directors has authorized the Group to submit an application to the Hong Kong Stock Exchange to add Hong Kong as a dual primary listing. After the HKEx completes the review process, Alibaba will be listed on the main board of the HKEx and the New York Stock Exchange as a dual primary listing. The relevant process is expected to be completed by the end of 2022, according to the announcement. Jingdong has also completed its secondary listing in Hong Kong.
The real reason why the long-term investment giant is clearing out Alibaba is not yet known.
According to Alibaba's latest earnings report, the group's revenue was 205.555 billion yuan (CNY, hereinafter referred to as "RMB") in the June quarter, remaining stable year-on-year. For the quarter, non-GAAP net profit fell 30 percent year-on-year to 30.252 billion yuan, and non-GAAP diluted earnings per ADS fell 29 percent year-on-year to 11.73 yuan. Adjusted EBITDA, a non-GAAP financial measure, declined 15% year-over-year to NT$41,114 million. Adjusted EBITA, a non-GAAP financial measure, declined 18% year-over-year to $34,419 million.
Hundred-billion-dollar trust still heavy in Alibaba Hong Kong shares
But the most recognizable product under Parky's umbrella, the Scottish Mortgage Trust (ScottishMortgageTrust: SMT). The product, established in 1909, had a size of 13.89 billion pounds, or 113.389 billion yuan, at the end of June 2022. The product's top 10 long positions at the end of June 2022 include Modena, Esmere, Tesla, Tencent, Ingenium, Meituan, SpaceX, Azera Motors, battery company North-volt, and Alibaba. Alibaba is the 10th largest long position.
As you can see, Berkey's flagship product is still long Alibaba Hong Kong shares.
BaillieGifford ChinaFund, one of Berkey's China funds, still had no second-largest position in Alibaba as of the end of May. the fund raised its position in NetEase by a massive 100.33 percent in May.
Park Fund Manager: Still Bullish on China's Long-Term Investment Opportunities
Sophie Earnshaw is one of the managers of the Park China Growth Trust.
Sophie Earnshaw recently said in a video program that we continue to believe that our China Growth Trust portfolio represents the best of the best and China's most innovative listed and unlisted growth companies. While the portfolio's net worth has weakened in the short term, we expect investors to judge our investment returns based on a five-year or longer time horizon.
It is encouraging to see that the business of our positions remains strong. In terms of portfolio positioning and trading, we continue to upgrade our portfolio by investing in companies that are well positioned for China's growth over the next decade and are aligned with China's policies. Overall, we continue to believe that China offers an attractive long-term risk and reward portfolio.
The long-term opportunities in China remain attractive. That said, it is a volatile market and investors must be clear that they need to be comfortable with this volatility before investing. We remain confident in the companies we invest in and believe that over time their strong businesses will be reflected in their share prices.
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