Wall Street's "Big Short" Rarely Bullish on Three Chinese Companies

Wall Street's famous short seller Michael Burry rarely goes public with a bullish stance on Chinese assets, directly naming three Chinese companies he favors.

In an article about Hong Kong stocks, Michael Burry pointed out that once market sentiment improves, Chinese stock earnings could grow in tandem, creating "huge upside potential" for Hong Kong-listed stocks.

A long-time bear, Burry is starting to reprice Chinese assets.

Before the 2008 financial crisis, Michael Burry successfully predicted and shorted the US housing bubble, making big profits from the subprime crisis. He also emerged unscathed from the 2000 dot-com bubble.

From 2000 to 2008, Burry’s fund returned 489.34%, while the S&P 500 gained less than 3% during the same period.

As a legendary investor who made a name for himself during the 2008 financial meltdown—also the inspiration for the movie "The Big Short"—Michael Burry’s recent moves have attracted global attention.

Known as a cold, cautious "Wall Street lone wolf," he has unprecedentedly started heavily bullish on Chinese assets.

In his latest statements, Burry publicly endorses three Chinese giants: BYD, Haidilao, and Pinduoduo.

At the same time, he offers a view: the current Hang Seng Tech Index is in a rare "bloodied golden pit" in history.

Burry’s "bullish list" includes Haidilao, BYD, and Pinduoduo.

His reasoning for favoring these three Chinese companies is as follows:

1. Haidilao (Burry score: 8/10)—"The monopoly on the dining table"

Burry’s highest score isn’t for tech stocks but for hotpot restaurants. He believes that as China’s only nationwide hotpot chain, Haidilao’s current market share is about 2.2%.

In his view, with brand effects already at their peak, its moat is deep, and future expansion potential remains huge. It’s one of the most cost-effective assets in China’s market today.

2. BYD (Burry score: 7/10)—"Vertical integration powerhouse"

Burry describes BYD as the most technologically advanced automaker globally. Unlike Tesla, which mainly relies on external supply chains, BYD develops chips, motors, and blade batteries in-house. This "vertical integration" gives it high tolerance in price wars.

He believes BYD is shedding dependence on government subsidies and government contracts. As about 40 billion RMB of receivables from the government are gradually collected, this huge cash reserve is fueling its overseas expansion.

3. Pinduoduo (Burry score: 6/10)—"Cautiously optimistic"

Regarding Temu’s parent company, Burry’s attitude is more nuanced. He notes Pinduoduo’s "float" logic—delaying payments to suppliers creates significant cash deposits (float), which can generate investment returns that once covered most of the company’s profits.

Despite its strong model, Burry thinks Pinduoduo’s financial disclosures are insufficient, so he recommends a light position (about 2%) until more transparency is achieved.

Additionally, Burry has rare social media comments criticizing the current state of the Hang Seng Tech Index: "This is the only major bear market in history caused purely by valuation compression."

He believes that although the stock prices of Hang Seng Tech companies have fallen sharply in recent years, their earnings are increasing. Yet, due to sentiment and external forces, their prices are being forcibly suppressed.

He points out that the 1929 Great Depression and the 2008 financial crisis were caused by company failures and fundamental collapses. But now, the revenue and profits of Hang Seng Tech stocks are still steadily growing.

Burry emphasizes that this isn’t due to company fundamentals failing but external factors—regulation, geopolitics, liquidity, foreign capital withdrawal, VIE concerns—causing irrational sell-offs. The current P/E ratio (TTM) is about 21 times, at a historically low level (15%-19%) since the index’s inception, making it one of the cheapest among global tech assets. Meanwhile, profits are accelerating: by 2026, overall EPS growth is expected to be 34%-40%. This extreme divergence—rising earnings while prices fall—is exactly the "bloodied golden pit" value investors dream of.

Recently, global capital has increased its focus on the Chinese market.

Not only Burry, but also South Korean retail investors and wealthy Middle Eastern sovereign funds are turning their eyes to Hong Kong and A-shares.

On the news front, the influx of Middle Eastern funds into Hong Kong has sparked discussion. Industry insiders in Hong Kong estimate that some of the new capital in the market comes from the Middle East.

According to China Galaxy Securities, in the week after the outbreak of the Middle East conflict, the average daily trading volume on the Hong Kong Stock Exchange reached 341.585 billion HKD, an increase of 99.749 billion HKD from the week before the conflict, marking the highest weekly volume in over half a year.

Amid increased volatility in global capital markets and rising geopolitical risks, Chinese assets are attracting overseas investors’ attention.

South Korean investors are actively buying A-shares, with "HALO" assets and semiconductor-related sectors especially favored.

SEIbro, a subsidiary of the Korea Securities Depository, reports that over the past month, the top 10 A-shares net bought by Korean investors are: Sany Heavy Industry, China Power Construction, Ganfeng Lithium, InnoTek, Changdian Technology, Guangxun Technology, Meihua Biological, Zhongji Xuchuang, Chip ETF, and Sunlord Electronics.

(These contents are purely objective data and do not constitute any investment advice.)

Over the past month, the top 10 Hong Kong stocks net bought by Korean investors are: Global X China Electric Vehicle ETF, China Energy Construction, Harbin Electric, Goldwind, China Resources Power, TianShu Zhixin, Zhuoyue Ruixin, Southbound 2x leveraged Samsung Electronics ETF, Baidu Group - SW, and China Power.