The Matthews China Fund (Trades, Portfolio) disclosed this week that it purchased 4 new shares all through the initial quarter: Kingdee International Software package Group Co. Ltd. (HKSE:00268), Hangzhou Tigermed Consulting Co. Ltd. (SZSE:300347), Weimob Inc. (HKSE:02013) and Concentrate Media Info Technological innovation Co. Ltd. (SZSE:002027).

Overseen by Andrew Mattock and Winnie Chwang, the fund aims for extensive-time period cash appreciation by investing at least 80{e0233a5a8ca3dab8ed448c5451aba2c38c77d167988a5d203483ecea09d61312} of its internet property in widespread and most popular shares of businesses located in China and special administration region Hong Kong. The China Fund seeks to make investments in businesses able of sustainable growth dependent on essential qualities like variety of workers, measurement and security of dollars flows and management’s depth and integrity.


Fund updates portfolio general performance in light of coronavirus outbreak

As of quarter-finish, the fund’s $785 million fairness portfolio consists of 39 shares with a turnover ratio of 12{e0233a5a8ca3dab8ed448c5451aba2c38c77d167988a5d203483ecea09d61312}. The fund’s leading 4 sectors in conditions of excess weight are shopper cyclical, money solutions, communication solutions and know-how, with weights of twenty five.39{e0233a5a8ca3dab8ed448c5451aba2c38c77d167988a5d203483ecea09d61312}, 23.58{e0233a5a8ca3dab8ed448c5451aba2c38c77d167988a5d203483ecea09d61312}, 15.02{e0233a5a8ca3dab8ed448c5451aba2c38c77d167988a5d203483ecea09d61312} and 8.thirty{e0233a5a8ca3dab8ed448c5451aba2c38c77d167988a5d203483ecea09d61312}.


The fund stated in its quarterly letter that it returned -8.seventy four{e0233a5a8ca3dab8ed448c5451aba2c38c77d167988a5d203483ecea09d61312} all through the initial three months of 2020, outperforming the MSCI China Index’s return of -10.22{e0233a5a8ca3dab8ed448c5451aba2c38c77d167988a5d203483ecea09d61312}.

When Chinese equities were impacted by the coronavirus outbreak, the fund outperformed the benchmark on the heels of favorable mix of inventory range and sector allocation. According to the letter, the fund’s absence of publicity to the power sector contributed to relative general performance as oil price ranges plunged all through the quarter owing to an OPEC price tag war. Regardless of this, the fund’s large publicity to financials detracted from relative general performance while inventory range in know-how and shopper cyclical boosted relative benefit.


The fund purchased six.447 million shares of Kingdee, supplying the stake 1.08{e0233a5a8ca3dab8ed448c5451aba2c38c77d167988a5d203483ecea09d61312} excess weight in the fairness portfolio. Shares averaged 9.52 Hong Kong dollars ($1.23) all through the initial quarter.


The Shenzhen, Guangdong-dependent business offers business administration application largely to the Asia-Pacific region. GuruFocus ranks Kingdee’s money toughness 8 out of 10 on various good investing indications, which involve a powerful Altman Z-rating of 10 and personal debt ratios that are outperforming in excess of 70{e0233a5a8ca3dab8ed448c5451aba2c38c77d167988a5d203483ecea09d61312} of world opponents.


The Matthews Asia Modest Firms Fund (Trades, Portfolio) also has a keeping in Kingdee.


Hangzhou Tigermed Consulting

The fund purchased 831,236 shares of Hangzhou Tigermed Consulting, supplying the posture .ninety five{e0233a5a8ca3dab8ed448c5451aba2c38c77d167988a5d203483ecea09d61312} excess weight in the fairness portfolio. Shares averaged seventy three.08 yuan ($10.29) all through the initial quarter.


Hangzhou Tigermed Consulting offers a wide range of scientific demo solutions, which involve bioanalytical, health-related creating, biostatistics analysis and health-related imaging. GuruFocus ranks the company’s profitability 10 out of 10 on various good investing indications, which involve growing working margins, a four.5-star company predictability rank and a large Piotroski F-rating of seven.



The fund purchased six.544 million shares of Weimob, supplying the keeping .52{e0233a5a8ca3dab8ed448c5451aba2c38c77d167988a5d203483ecea09d61312} excess weight in the fairness portfolio. Shares averaged HK$four.seventy two all through the initial quarter.


The Shanghai-dependent business offers cloud company and marketing and advertising solutions for modest and medium-sized enterprises in China. According to GuruFocus, Weimob’s personal debt ratios are outperforming just fifty three{e0233a5a8ca3dab8ed448c5451aba2c38c77d167988a5d203483ecea09d61312} of world opponents, suggesting modest money toughness.


Concentrate Media

The fund purchased 5,754,207 shares of Concentrate Media, supplying the stake .forty five{e0233a5a8ca3dab8ed448c5451aba2c38c77d167988a5d203483ecea09d61312} excess weight in the fairness portfolio. Shares averaged 5.58 yuan all through the initial quarter.


GuruFocus ranks the Shanghai-dependent marketing company’s money toughness 8 out of 10 on various good investing indications, which involve a powerful Altman Z-rating of 12 and personal debt ratios outperforming in excess of seventy seven{e0233a5a8ca3dab8ed448c5451aba2c38c77d167988a5d203483ecea09d61312} of world opponents.


Disclosure: No positions.

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James Li

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