Himalaya Capital Management 13F Portfolio · Li Lu

The quarter's only discretionary bets were PDD Holdings and Berkshire Hathaway, and they pull in the same direction. PDD — the e-commerce platform behind Pinduoduo and Temu — now takes 22.17% of the book at $820.9M, after shares rose 133.5% and roughly $469.4M of capital went in, even though the position sits 14.2% below Himalaya's blended cost of $98.14.

That is a value buyer adding into a drawdown, not a momentum chaser. Berkshire got the same treatment at smaller scale: shares up 23.5%, $105.4M added, 14.98% of the book, and a 60.6% gain on an average cost of $315.73. One leg is a cheap, cash-generating consumer platform the market has marked down; the other is a balance-sheet fortress the fund already owns at a large profit.

The pairing is the tell. Li Lu is buying cash-generating businesses at discounts to his own estimate of value, and he is willing to be early on the one that hurts. Berkshire is not a new idea — it is ballast that lets him hold a concentrated, underwater China position without flinching.

Look at where the weights fell and you will not find a single sale. Finance slipped from 11.5% to 9.7% and consumer discretionary from 5.2% to 4.4%, yet East West Bancorp, Crocs and Tencent Music all carry identical share counts to the prior quarter. The decline is arithmetic — roughly $574.7M of additions entered the book and every untouched name was diluted — not a verdict on banks or footwear.

• East West Bancorp — 9.68% of the book, $358.4M, unchanged, sitting 128.4% above cost.
• Crocs — 2.89%, $107.0M, unchanged, 55.7% above cost.
• Tencent Music — 1.49%, $55.0M, unchanged, 35.4% below cost.

The awkward hold is Tencent Music: neither added to nor cut, still 35.4% underwater. That is a position Li Lu seems content to let ride rather than defend. For anyone reading this 13F, the absence of trims is the signal — a manager who sold nothing while deploying $574.7M has narrowed his conviction changes to exactly two places, and any genuine change of mind would first appear next quarter as a reduced share count.

Treat the sector bar chart with suspicion. The screener files Alphabet under technology when it is an advertising and communication-services business, and files PDD under technology when it is Chinese e-commerce. The rotation that actually happened is by company: Alphabet's two share classes went from roughly 56.7% of the book to 47.9%, PDD from 11.2% to 22.2%, and Berkshire from 14.4% to 15.0%.

Read against real-world business lines, the drift is clear:

• China consumer platform exposure — PDD plus Tencent Music — rose from about 13.0% to 23.7% of the book.
• US mega-cap internet — Alphabet plus Apple — fell from roughly 57.8% to 48.8%.
• Financials, meaning East West Bancorp and arguably Berkshire, slid from about 25.8% to 24.7%.

This is not a sector rotation. It is a single-stock promotion: PDD moved from supporting role to co-equal pillar beside Alphabet, and Berkshire was topped up as a cash-rich hedge against the fund's own concentration. Everything else simply became smaller relative to those two positions.

The fund's record gives this concentration some cover: 26.99% annualized over three years and a 10.67% gain in the latest quarter. But the structure is now unusually fragile by design. Nearly half the book sits in one company, another 22.17% sits in a single Chinese e-commerce ADR that is underwater on cost, and there are only eight positions in total.

• If PDD re-rates toward the $98.14 average cost, the fund's returns are made largely on one trade.
• If it does not, there is no second active idea waiting; the Berkshire add is ballast, not a catalyst.
• A real change of mind would show up as a reduced share count in Alphabet or East West Bancorp, and this filing shows none.

The forward read is narrow and legible. Himalaya has stopped running a diversified portfolio and started running a thesis: cheap, cash-generative platforms bought below estimated value, held in size, with Berkshire's balance sheet as the shock absorber. Watch whether next quarter brings a third name into the top tier. Until then, this is an eight-position fund with one swing.