Tracking Short Interest in US Listed China/H.K. Stocks: Market Insights
Author:
Ihor Dusaniwsky
Managing Director of Predictive Analytics, S3 Partners
China has been actively injecting fiscal stimulus into their economy in order to slow and hopefully reverse falling property values, support the markets and stabilize economic confidence. As a result the CSI 300 Index is up +27.2% since its September 13th year-to-date low. Surprisingly, even with the broad rally in U.S. listed China\H.K. stocks, we have not seen a rush of short covering as short sellers incur mark-to-market losses. Just over 50% of U.S. listed China\H.K. short interest is comprised by just three online marketplace securities, and the top twenty shorts are:
U.S. Listed China\H.K. Short Interest
Ticker
SI % Float
Short Interest
Alibaba Group Holding Ltd
BABA US
2.74%
$6,978,508,236
PDD Holdings Inc
PDD US
2.27%
$4,125,236,366
JD.com Inc
JD US
2.36%
$1,346,110,838
NIO Inc
NIO US
8.65%
$1,120,130,880
Baidu Inc
BIDU US
3.19%
$958,715,504
Li Auto Inc
LI US
3.43%
$762,455,714
Trip.com Group Ltd
TCOM US
1.67%
$668,962,584
KE Holdings Inc
BEKE US
2.61%
$600,653,038
XPeng Inc
XPEV US
5.10%
$476,675,925
Yum China Holdings Inc
YUMC US
2.88%
$476,494,023
BeiGene Ltd
BGNE US
2.18%
$470,583,492
New Oriental Education & Techn
EDU US
3.38%
$427,513,704
Futu Holdings Ltd
FUTU US
4.92%
$410,856,881
NetEase Inc
NTES US
0.68%
$409,823,790
Bilibili Inc
BILI US
5.24%
$404,938,375
H World Group Ltd
HTHT US
3.35%
$400,230,531
ZTO Express Cayman Inc
ZTO US
2.35%
$348,072,585
TAL Education Group
TAL US
5.69%
$322,866,415
Tencent Music Entertainment Gr
TME US
2.85%
$298,537,226
Full Truck Alliance Co Ltd
YMM US
3.75%
$295,213,483
Total Sector
3.53%
$24,478,251,515
Shorting U.S. listed China\H.K. stocks has been very active in 2024 with total short interest increasing by $5.6 billion, or +30%. This increase is made up of $4.6 billion in increased short selling coupled with a $1.0 increase in the value of shares shorted. Alibaba Group (BABA) and JD.com Inc had the largest increase of short selling in the sector.
U.S. Listed China\H.K. Short Interest
Ticker
YTD Change
YTD Shares Shorted
YTD Ch MTM
Alibaba Group Holding Ltd
BABA US
$4,257,873,054
$3,253,649,411
$1,004,223,644
PDD Holdings Inc
PDD US
($297,460,793)
$50,164,150
($347,624,943)
JD.com Inc
JD US
$694,067,987
$443,316,973
$250,751,015
NIO Inc
NIO US
($387,377,912)
$9,859,794
($397,237,705)
Baidu Inc
BIDU US
$384,605,241
$451,132,397
($66,527,156)
Li Auto Inc
LI US
($432,882,003)
($56,684,373)
($376,197,631)
Trip.com Group Ltd
TCOM US
$362,746,724
$163,591,599
$199,155,124
KE Holdings Inc
BEKE US
$140,581,061
$35,567,703
$105,013,358
XPeng Inc
XPEV US
($311,744,900)
($181,512,269)
($130,232,630)
Yum China Holdings Inc
YUMC US
$151,871,130
$132,055,591
$19,815,540
BeiGene Ltd
BGNE US
$140,085,154
$59,182,882
$80,902,272
New Oriental Education & Techn
EDU US
$83,349,860
$71,326,620
$12,023,240
Futu Holdings Ltd
FUTU US
$144,559,450
($55,395,226)
$199,954,676
NetEase Inc
NTES US
($140,397,150)
($142,464,368)
$2,067,218
Bilibili Inc
BILI US
$142,159,026
($99,891,635)
$242,050,661
H World Group Ltd
HTHT US
$83,733,605
$48,146,622
$35,586,983
ZTO Express Cayman Inc
ZTO US
$2,837,675
($53,782,162)
$56,619,837
TAL Education Group
TAL US
($72,313,933)
($47,595,617)
($24,718,316)
Tencent Music Entertainment Gr
TME US
$169,199,649
$125,560,774
$43,638,875
Full Truck Alliance Co Ltd
YMM US
$94,525,118
$37,267,379
$57,257,739
Total Sector
$5,634,442,612
$4,610,330,193
$1,024,112,420
Prior to the recent rally short sellers were profitably building their positions in a falling market but since the market low on 9/13 we have seen short selling slow substantially. As the market rallied the value of shares shorted in the sector increased by $5.8 billion and new short selling slowed to just $132 million.
Even though short sellers were taking massive mark-to-market losses on their positions there was selective short covering and even some new short selling in different stocks in the sector. BABA continue to see increased short selling while PDD saw large short covering.
U.S. Listed China\H.K. Short Interest
Ticker
9/13 Change
9/13 Shares Shorted
9/13 Ch MTM
Alibaba Group Holding Ltd
BABA US
$1,851,126,886
$613,814,002
$1,237,312,884
PDD Holdings Inc
PDD US
$792,922,011
($490,291,173)
$1,283,213,184
JD.com Inc
JD US
$421,529,745
($41,628,161)
$463,157,906
NIO Inc
NIO US
$183,575,622
($64,753,422)
$248,329,044
Baidu Inc
BIDU US
$221,170,714
$35,007,979
$186,162,735
Li Auto Inc
LI US
$224,842,452
$32,064,810
$192,777,643
Trip.com Group Ltd
TCOM US
$148,463,433
$12,205,377
$136,258,055
KE Holdings Inc
BEKE US
$166,871,240
($34,858,051)
$201,729,291
XPeng Inc
XPEV US
$120,166,793
($27,069,003)
$147,235,796
Yum China Holdings Inc
YUMC US
$125,721,704
$17,163,920
$108,557,784
BeiGene Ltd
BGNE US
$60,596,934
$1,606,594
$58,990,339
New Oriental Education & Techn
EDU US
$74,275,150
($22,656,217)
$96,931,367
Futu Holdings Ltd
FUTU US
$166,286,949
$163,179
$166,123,770
NetEase Inc
NTES US
$85,978,563
$17,458,319
$68,520,244
Bilibili Inc
BILI US
$120,205,274
($27,057,721)
$147,262,994
H World Group Ltd
HTHT US
$78,992,158
($15,713,318)
$94,705,476
ZTO Express Cayman Inc
ZTO US
$33,207,807
($6,597,737)
$39,805,544
TAL Education Group
TAL US
$106,872,938
($7,969,658)
$114,842,596
Tencent Music Entertainment Gr
TME US
$50,324,345
($8,228,439)
$58,552,784
Full Truck Alliance Co Ltd
YMM US
$66,207,692
$7,839,925
$58,367,767
Total Sector
$5,888,385,923
$131,514,515
$5,756,871,408
Short sellers were up $3.7 billion in year-to-date mark-to-market profits prior to 9/13 but are now down -$3.2 billion for the year after incurring -$6.9 billion in mark-to-market losses as the CSI 300 rallied +27%.
BABA and JD are the most unprofitable trades on the short side for the year while NIO, LI, XPEV and PDD short sellers are still profitable for the year.
Mark-To-Market P\L
Ticker
9/13 MTM P\L
P\L %
YTD MTM P\L
P\L %
Alibaba Group Holding Ltd
BABA US
($1,701,881,078)
-28.53%
($2,121,756,668)
-55.92%
PDD Holdings Inc
PDD US
($1,454,936,053)
-42.31%
$136,457,888
3.52%
JD.com Inc
JD US
($542,742,236)
-50.46%
($484,453,793)
-58.42%
NIO Inc
NIO US
($220,175,441)
-23.89%
$349,437,307
38.36%
Baidu Inc
BIDU US
($220,668,929)
-27.46%
($3,606,676)
-0.57%
Li Auto Inc
LI US
($259,472,736)
-40.26%
$285,374,151
36.93%
Trip.com Group Ltd
TCOM US
($154,988,791)
-27.42%
($246,489,034)
-49.35%
KE Holdings Inc
BEKE US
($267,098,334)
-55.35%
($191,973,802)
-47.03%
XPeng Inc
XPEV US
($143,448,647)
-35.25%
$147,535,711
33.47%
Yum China Holdings Inc
YUMC US
($120,113,731)
-30.60%
($42,466,534)
-11.50%
BeiGene Ltd
BGNE US
($58,827,634)
-14.07%
($87,312,111)
-28.34%
New Oriental Education & Techn
EDU US
($99,729,374)
-26.68%
($24,116,820)
-5.75%
Futu Holdings Ltd
FUTU US
($198,353,548)
-66.07%
($199,033,819)
-83.85%
NetEase Inc
NTES US
($77,375,166)
-21.57%
($34,431,143)
-7.87%
Bilibili Inc
BILI US
($196,890,912)
-62.10%
($274,470,008)
-99.18%
H World Group Ltd
HTHT US
($104,827,816)
-30.17%
($43,546,290)
-13.15%
ZTO Express Cayman Inc
ZTO US
($46,037,499)
-15.17%
($47,713,821)
-13.76%
TAL Education Group
TAL US
($122,441,307)
-51.19%
$7,858,387
2.90%
Tencent Music Entertainment Gr
TME US
($76,925,166)
-30.05%
($87,770,990)
-31.69%
Full Truck Alliance Co Ltd
YMM US
($68,342,501)
-26.72%
($78,825,616)
-27.22%
Total Sector
($6,882,807,644)
-33.53%
($3,186,236,816)
-17.40%
As a result of these large mark-to-market losses U.S. listed China\H.K. stocks are becoming more squeezable. While these shorts are less crowded than the average U.S. listed stock with a 28.27 S3 Crowded score versus the U.S. average Crowded Score of 33.71.
These stocks are also becoming significantly more squeezable with an average S3 Squeeze score of 69.37 versus the U.S. average of 36.77.
Crowded & Squeeze Scores
Ticker
Crowded Score
Squeeze Score
Alibaba Group Holding Ltd
BABA US
32.50
72.50
PDD Holdings Inc
PDD US
25.00
75.00
JD.com Inc
JD US
22.50
72.50
NIO Inc
NIO US
47.50
97.50
Baidu Inc
BIDU US
27.50
57.50
Li Auto Inc
LI US
32.50
72.50
Trip.com Group Ltd
TCOM US
17.50
47.50
KE Holdings Inc
BEKE US
22.50
72.50
XPeng Inc
XPEV US
27.50
67.50
Yum China Holdings Inc
YUMC US
20.00
60.00
BeiGene Ltd
BGNE US
30.00
60.00
New Oriental Education & Techn
EDU US
25.00
55.00
Futu Holdings Ltd
FUTU US
20.00
70.00
NetEase Inc
NTES US
17.50
47.50
Bilibili Inc
BILI US
22.50
82.50
H World Group Ltd
HTHT US
30.00
60.00
ZTO Express Cayman Inc
ZTO US
22.50
52.50
TAL Education Group
TAL US
30.00
80.00
Tencent Music Entertainment Gr
TME US
15.00
45.00
Full Truck Alliance Co Ltd
YMM US
25.00
55.00
Total Sector
28.27
69.37
U.S. Average
33.71
36.77
The most squeezable U.S. listed China\H.K. stocks are NIO, BILI, and TAL with PDD, BABA, JD, LI, BEKE, and FUTU not far behind.
If the Chinese market continues to rally, we should expect a significant amount of short covering in the sector pushing stock prices even higher. BABA’s stock price might see the greatest impact if shorts begin covering in size as the stock has seen increased short selling into this rally. With short selling no longer offsetting some of the long buying pressure in the stock, buy-to-covers side-by-side with long buying may steepen the trajectory if its price moves.
Want to know more?
Access this data in real time using S3’s BLACK APP or Contact us to get started.