Duan Yongping’s Latest Moves: Major Pinduoduo Bet, Apple Trimmed, and Tencent Put Strategy

Portfolio Shifts: Pinduoduo and Occidental Petroleum Surge, Apple Reduced

Duan Yongping’s latest U.S. stock portfolio adjustments have caught the market’s attention. Through his H&H International Investment fund, Duan made significant changes in Q3, including a massive increase in Pinduoduo and Occidental Petroleum holdings, a reduction in Apple shares, and a complete exit from Bank of America. Furthermore, he has been actively selling Tencent and Pinduoduo put options daily, a strategy that has sparked intrigue among investors.

Key Portfolio Adjustments in Q3

As of the end of Q3, H&H International Investment fund held 8 stocks with a total value of $16.5 billion. Apple remained the largest holding, though the fund trimmed its position by 11.2 million shares, reducing its stake from 63.92 million to 52.77 million shares. Despite this reduction, Apple still accounted for $12.295 billion of the portfolio, with its weight dropping from 80.95% to 74.33%.

Meanwhile, Pinduoduo saw the most significant increase, with an additional 3.8 million shares purchased during the quarter. This brought the fund's Pinduoduo stake to $527 million, making it the fifth-largest holding and representing a 36-fold increase in allocation. Occidental Petroleum also saw its stake grow from 1.54 million to 9.22 million shares, with its value rising to $475 million.

In contrast, small reductions were made in Berkshire Hathaway (-3%) and Alibaba (-13.69%), while Bank of America was completely divested.

By the end of Q3, the fund’s top five holdings were Apple ($12.295 billion), Berkshire Hathaway ($1.741 billion), Alphabet ($847 million), Alibaba ($578 million), and Pinduoduo ($527 million).

Pinduoduo and Tencent: Strategic Focus

Duan’s recent activity underscores his sharp focus on Pinduoduo and Tencent as key opportunities.

In late August, following Pinduoduo’s disappointing earnings report, its stock price plummeted 30% in a single day—the largest drop since its IPO. Seizing this opportunity, Duan began selling Pinduoduo put options to build his position. On August 27, he remarked, "I started selling some puts on Pinduoduo. While I don't fully understand their business model yet, it’s becoming increasingly interesting over the years."

By September 27, Duan shared, "The recent surge in prices seems excessive. I spent a lot of time analyzing Pinduoduo and Tencent and saw this as a great opportunity, so I sold more puts. It seems like I may have missed out on bigger gains, though."

On October 18, he noted, "I’ve resumed selling puts on Pinduoduo and Tencent. The previous sharp rally created another great entry point." These moves suggest further increases in Pinduoduo's allocation for Q4.

Tencent, on the other hand, has been a steady focus. Rather than purchasing shares outright, Duan has consistently sold 1,000 Tencent put options daily. On October 26, he revealed, "Selling 1,000 Tencent puts each day is much easier than directly buying stocks. Incidentally, I acquired most of my Apple shares the same way—though my position in Apple is proportionally larger than Buffett’s."

Opportunities Amid Trade Tensions

Duan’s contrarian approach stands out in the face of broader market sentiment. Following Donald Trump’s election, fears of U.S.-China trade conflicts weighed heavily on Chinese equities. However, Duan took advantage of this pessimism to increase his Tencent exposure.

On November 13, he commented, "Many investors are selling Chinese stocks out of concern over trade tensions, creating opportunities to buy at attractive prices. Selling puts is a perfect strategy in these conditions—it even allows you to buy some calls. The 'Tencent Insurance Company' is now open for business." This reference humorously illustrates his confidence in generating income through put options while building long-term positions.

Duan’s Perspective on Pinduoduo and Tencent

Duan views Pinduoduo and Tencent with distinct perspectives. He stated, "Pinduoduo is still a startup with many uncertainties ahead. Tencent, by comparison, is more mature and predictable." This suggests that while he sees long-term potential in Pinduoduo, Tencent remains a cornerstone of his portfolio due to its stability.

In conclusion, Through dynamic strategies like selling puts and leveraging market pessimism, Duan Yongping continues to demonstrate his skill in navigating complex market conditions. His ability to identify opportunities in Tencent and Pinduoduo highlights his forward-looking approach, which could yield substantial rewards in the long run.