Temasek Holdings cut its stakes in several major Chinese tech firms in Q2 2025, according to regulatory filings.

The fund reduced its holdings in JD.com by 87%, Alibaba by two-thirds, NetEase by 38%, and H World Group by 8%.

Its US-traded Chinese stock portfolio value fell by more than a third to US$1.3 billion at the end of June.

At the same time, Temasek increased its stake in PDD Holdings by 28%, in Yum China by 30%, and bought shares in KE Holdings and EV maker Xpeng for the first time.

Saudi Arabia’s Public Investment Fund sold all its Alibaba shares, worth US$212 million.

Other institutional investors, including Bridgewater Associates and Oaktree Capital Management, also exited or sharply cut their US-listed Chinese stock positions amid market volatility and renewed US-China trade tensions.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ Institutional investors are strategically rotating within Chinese markets rather than completely exiting

The moves by major funds reveal a nuanced strategy of sector rotation rather than a complete exit from Chinese markets.

Temasek’s portfolio changes show this selective approach clearly: while cutting tech giants like Alibaba by 67% and JD.com by 87%, it simultaneously increased consumer-focused holdings like PDD by 28% and Yum China by 30%1.

This suggests institutional investors still see value in Chinese markets but are repositioning toward companies with more predictable revenue streams and less regulatory risk.

The strategy aligns with the fact that consumer companies like Yum China benefit from China’s domestic growth without facing the same level of technology transfer restrictions or data security scrutiny that tech companies encounter.

Even as Temasek’s Chinese stock portfolio value dropped by $699.3 million, its overall equity portfolio grew 4.4% to $26 billion, indicating the fund is deploying capital elsewhere rather than holding cash1.

2️⃣ The scale and timing of divestments signals broader structural concerns beyond individual company performance

The timing of major institutional exits in Q2 2025 suggests investors are responding to systemic risks rather than company-specific issues.