Some Asian hedge funds have found ways to profit from China's struggling economy this year, doubling down on bets on companies that offer low-cost consumer goods or are expanding into overseas markets.

China's low-priced e-commerce company Pinduoduo, the dollar store chain Mingchuan Yuping and Ruixing Coffee, which offers a drink for just $2, are among hedge funds' top holdings.

Some hedge funds have benefited from bets related to consumer savings in the world's second-largest economy, fund industry sources say and exchange filings show.

So far this year, shares of Pinduoduo and Ruixing Coffee have soared 46% and 45%, respectively, while shares of Mingchuang Yuping have more than doubled, contradicting the MSCI China Index's 10% decline.

Hong Kong-based First Beijing Investment Ltd.'s flagship fund soared 30% in the first 10 months of the year, driven by bets on Pinduoduo and Ruixing Coffee positions, sources familiar with the firm's portfolio said.

The company has bought more than 2 million shares of Poundland stock since the second quarter of 2023, making it its largest stake in a U.S.-listed company, according to its 13F quarterly filing with the Securities and Exchange Commission (SEC).

Terran Capital, a $6 billion hedge fund, also lists Poundland as one of its top holdings, with all other major holdings being U.S. tech stocks.

The fund cashed out some profits from its Poundland holdings in the last quarter, according to a 13F filing. The fund returned 12% through October, the source said.

China's economic slowdown has led consumers to spend less, forcing domestic companies to seek growth overseas.

Poundland has been a frontrunner in the competitive e-commerce market, with first-half net profit soaring 85%. analysts say the low-cost e-commerce giant has become a representative of the value-for-money consumer trend.

The company entered the U.S. market last year through its Temu brand and is rapidly expanding into other countries, attracting investors keen on the themes of globalization and diversification.

Similarly, Famous has accelerated the pace of store openings outside of China while realizing strong profitability. In May, the company opened its first global flagship store in New York.

Andy Maynard, head of equities at China Renaissance, said Chinese companies with strong supply chain management and value-added products have been popular for overseas expansion this year as consumers downsize.

Pinduoduo, in particular, has grabbed market share both domestically and globally, making it "a Chinese company with a degree of defense," Maynard said.

The flagship fund of Hong Kong-based hedge fund firm WT Asset Management rose 5% in October, sources said.13F filings showed the fund increased its stake in Poundland and added to its holdings of Famous for the third quarter.

Neither First Beijing, Terran Capital nor WT responded to requests for comment.

The average Greater China long-short equity fund is down 101 TP3T so far this year, while Asia long-short equity funds are down 41 TP3T, according to data provider EurekaHedge.