We launched KWEB with an eye toward the secular growth of China’s domestic consumer market and China’s rapid adoption of E-Commerce. Fast forward ten years, and not only has that market grown incredibly, but China’s leading internet companies have also globalized. One company that exemplifies this trend is PDD Holdings, owner of shopping apps Pinduoduo and Temu, which has brought its unique model to the North American market with great fanfare and success.

In this edition’s theme highlight, we examine Temu’s rise and discuss its implications for China’s internet sector.

China Internet Highlights:

• Presidents Biden and Xi met in Woodside, CA, on November 15^th, 2023, on the sidelines of the Asia Pacific Economic Cooperation (APEC) Summit. We believe this represents a significant positive turning point in US-China relations.
• Many China internet companies continue to return capital to shareholders through share repurchase programs. Tencent bought back a staggering 47.5 million shares in the third quarter alone, representing approximately $1.8 billion. Meanwhile, in the third quarter, Baidu, Kuaishou, KE Holdings, and Trip.com also executed significant share repurchases.¹
• Many internet companies’ year-over-year growth figures are lower for the third quarter than the second due to a high base effect. The third quarter’s year-over-year results present the first full-year comparison in which China was not under a strict zero COVID policy.

China Internet Sector Earnings Report Contents:

• China Internet Sector recent Highlights
• Subsector Analysis
• Theme Highlight – China Internet: Going Global With PDD’s Temu
• KWEB Top 10 Holdings Earnings Update

1. Data from KraneShares and Bloomberg as of 9/30/2023.