Temasek Holdings increased its exposure to China by S$10 billion ($7.7 billion) last year. This was the biggest annual increase in five years as state investors repositioned their portfolios in China for a new growth cycle led by artificial intelligence and advanced technology.
“We have seen a recovery in China,” CEO Dilhan Pillay said at the company’s annual review on Wednesday, adding that the company’s China exposure has increased by about S$24 billion over the past decade.
Temasek’s five-year total shareholder return for the year ended March was 4.6%, weighed down by headwinds from China’s capital markets from 2021 to 2024, the company said, adding that its exposure last year increased as market valuations improved.
Although Temasek’s underlying country exposure to China has fallen to 17% from 24% in 2016, it remains the fund’s third-largest market after Singapore at 27% and the Americas at 26%, up from 24% a year ago.
Within China, the company is pivoting from the sectors that characterized the early stages of its portfolio (consumer and real estate) to what it calls “hard tech,” including AI-related hardware and infrastructure, robotics, biotech, and energy transition.
Chea Song Fee, CEO of Temasek Global Investment, said China is “no longer a high-growth economy but is becoming a mature economy.” “We need to choose when to invest (and) build a portfolio that is better suited to this current arrangement.”
When it comes to consumption, Temasek believes there are opportunities to spend on experiences rather than products, and domestic consumer brands with proven innovation capabilities rather than foreign brands. However, he said the recovery in domestic consumption remains “uneven and not yet widespread” and that further policy easing remains unlikely.
Luckin Coffee, ANE
New investments made in the year include Luckin Coffee and logistics group ANE in China, Anthropic and OpenAI in the US, and Ermenegildo Zegna Group in Europe.
Temasek, which had an indirect investment in the coffee chain through private equity firm Centurium Capital, disclosed a 6.4% stake in Luckin in a regulatory filing in May.
Tuesday, December 16, 2025, Luckin Coffee Shop in New York, USA.
Christian Monterrosa | Bloomberg | Getty Images
The coffee chain, which was forced to be delisted from the Nasdaq in 2020 due to a $300 million fraud scandal and was once on the brink of collapse, has made a meteoric comeback. In 2022, Luckin announced that it had completed the restructuring of its financial debt and emerged from Chapter 15 bankruptcy proceedings.
Cheah said Temasek invested in Luckin after the company’s legal and governance issues were resolved, and dismissed questions about relisting, saying Luckin’s priority was first to build a durable business.
“We decided to invest because we believed that the shareholders and management were doing the right thing and were on the right track, and only then did we invest,” Chia said.
Temasek was also part of a consortium with Centurium Capital and Temasek’s private equity firm True Light Capital that took ANE private in February.
The net portfolio value of state investors surged by S$49 billion to a record S$518 billion ($401 billion) in the year ended March 31, the third consecutive year of growth.
