“Big Short” investor Michael Burry has bet half his portfolio on Chinese stocks. It’s finally starting to pay off.

• Renowned “Big Short” investor Michael Burry is benefiting from the recent surge in Chinese stocks.

• Burry’s Scion Asset Management has almost half of its portfolio invested in Chinese tech giants such as Alibaba.

• China’s recent stimulus measures, including interest rate cuts, have sparked a surge in stock market gains.

The rise in Chinese stocks this week should be music to the ears of hedge fund manager Michael Burry of “The Big Short” fame.

Burry started aggressively buying Chinese stocks in the fourth quarter of 2022, and it looks like it’s finally paying off.

According to 13F filings, Burry’s Scion Asset Management, which manages about $200 million, has about half of its portfolio invested in Chinese tech giants.

Burry counts Alibaba as the largest position with 21% of the portfolio and was still buying the stock in the second quarter, increasing its holding by 24%.

Burry also has 12% of its portfolio invested in Baidu, and another 12% of its portfolio invested in JD.com. In total, Burry had about 46% of his portfolio invested in the three Chinese stocks as of June 30.

All three stocks rose this week as China got serious about announcing stimulus plans to revitalize its struggling economy.

The People’s Bank of China announced key interest rate cuts, reduced bank reserve requirements to boost lending and said it planned to support stock market liquidity.

The country also encouraged its companies to start buying shares.

All these measures and conciliatory speeches from policymakers led to a massive rally in China’s stock markets this week.

The iShares MSCI China ETF is up 18% so far this week. Meanwhile, shares of Alibaba, Baidu and JD.com are up 19%, 18% and 32% respectively so far this week.

According to data from HedgeFollow, which tracks and compiles data from 13F filings, recent gains in China’s stock market should mean Burry is also seeing some sizable gains in his portfolio, with Alibaba leading the way.

HedgeFollow estimates that Burry has an average cost per share of $78.83 for its Alibaba stake. Alibaba shares hit $105.25 in Thursday afternoon trading, representing an expected 34 percent gain.

That assumes Burry hasn’t sold any shares since Scion 13F’s last filing, which gives data as of June 30.

Burry isn’t the only hedge fund manager cashing in on China’s recent stock market rally.

Billionaire investor David Tepper said Thursday it was a time to buy “all in” for Chinese stocks.

Like Burry, Tepper counts Alibaba as his hedge fund’s largest position, accounting for about 12 percent of his $6.2 billion Appaloosa fund. Tepper believes Chinese stocks have more upside because of low valuations.

The story continues

“Even with the recent moves, they’re kind of low compared to where they’ve been in the past. And you’re there with a single multiple PEs with double-digit growth rates for large trading stocks. here,” Tepper said in an interview with CNBC on Thursday.

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