Why a $1.6 Million Trim Didn’t Knock This $16 Million China Logistics Bet Off Course

Dallas-based Highlander Partners cut its position in Full Truck Alliance Co. Ltd. (NYSE:YMM) by 260,000 shares last quarter, reducing exposure by $1.65 million, according to a November 13 SEC filing.

What Happened

In a filing submitted to the U.S. Securities and Exchange Commission on November 13, Highlander Partners reported selling 260,000 shares of Full Truck Alliance Co. Ltd. (NYSE:YMM) during the third quarter. The position’s value fell by $1.65 million over the period, leaving the fund with 1.23 million shares worth $15.93 million as of September 30.

What Else to Know

Despite the reduction, YMM still represents 5.56% of Highlander’s 13F AUM, its fifth-largest holding as of the quarter’s end.

Top holdings after the filing:

• NYSE:BX: $81.84 million (23.9% of AUM)
• NYSE:VRT: $53.34 million (15.6% of AUM)
• NYSE:BABA: $30.78 million (9.0% of AUM)
• NASDAQ:AMZN: $22.62 million (6.6% of AUM)
• NYSE:YMM: $15.93 million (4.7% of AUM)

As of Friday, YMM shares were priced at $11.25, up about 4% over the past year and underperforming the S&P 500, which is instead up about 17% in the same period.

Company Overview

Company Snapshot

• Full Truck Alliance offers a digital freight platform providing freight listing, matching, brokerage, transaction, and value-added services such as credit solutions, insurance brokerage, and electronic toll collection.
• The company generates revenue primarily through transaction fees, value-added services, and technology development for shippers and truckers in China.
• It serves shippers seeking efficient freight solutions and truckers looking for shipment opportunities across various cargo types and distances within the Chinese market.

Full Truck Alliance Co. Ltd. operates at scale as a leading digital freight platform in China, leveraging technology to connect shippers and truckers efficiently. The company's integrated service offering and broad network provide a competitive advantage in the rapidly evolving logistics sector. Its strategy focuses on digitalization and value-added services to drive growth and operational efficiency.

Foolish Take

Trimming a position that still sits among the fund’s top holdings suggests calibration, not capitulation. In other words, this looks less like a loss of faith and more like portfolio discipline after a volatile stretch for Chinese equities, particularly since the stock was up about 22% year to date through the end of the third quarter, offering up opportunities to lock in some gains while keeping a position in the stock.

Fundamentally, Full Truck Alliance continues to do what long-term investors should care about. Full Truck Alliance posted third-quarter revenue of roughly $472 million, up nearly 11% year over year, driven by strong growth in transaction services, which surged 39% as order volumes and monetization improved. Fulfilled orders climbed more than 22%, while average shipper MAUs rose almost 18%, reinforcing the platform’s scale advantages.

That said, profitability told a more mixed story. Net income declined 18% year over year, reflecting higher operating costs and increased investment in technology and ecosystem development. Management also guided fourth-quarter revenue slightly below last year’s level, a reminder that growth is moderating even as engagement metrics remain strong. Placed alongside the fund’s heavier weights in global asset managers and mega-cap tech, this holding still reads as a targeted bet on digital infrastructure rather than a core macro call on China.

Glossary

13F AUM: The total market value of securities reported by an institutional investment manager on SEC Form 13F.
Alpha: A measure of an investment's performance relative to a benchmark, indicating excess return or outperformance.
Stake: The amount of ownership or number of shares an investor holds in a company.
Holding: A security or asset owned by an individual or institutional investor within a portfolio.
Value-added services: Additional services offered beyond core offerings, often to enhance customer experience or generate extra revenue.
Brokerage: The business or service of acting as an intermediary between buyers and sellers, often for a fee or commission.
Transaction fees: Charges collected for facilitating or processing a trade or service on a platform.
Dividend yield: A financial ratio showing how much a company pays out in dividends each year relative to its share price.
Digital freight platform: An online system that connects shippers and carriers to arrange and manage freight transportation.
Electronic toll collection: A digital system allowing vehicles to pay tolls automatically without stopping at toll booths.
Operational efficiency: The ability of a company to deliver goods or services using the least necessary resources.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Blackstone. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.