HONG KONG, Nov 21 (Reuters) - Some Asian hedge funds have found ways to profit from China's struggling economy this year, doubling down on companies that serve low-cost consumer goods or have expanded into overseas markets.

China's budget shopping app PDD Holdings, dollar store chain MINISO Group, and Luckin Coffee where a drink can be purchased for a mere $2, are some of the top holdings of the hedge funds.

Fund sources and exchange filings point to some hedge funds benefiting from contrarian bets on frugal consumers in the world's second-largest economy, where sluggish growth has forced households to tighten their belts.

Shares of PDD and Luckin have surged 46% and 45% this year, respectively, while shares of Miniso have more than doubled, bucking the 10% decline in the MSCI China Index .

Hong Kong-based First Beijing Investment Limited's flagship fund soared 30% in the first 10 months of this year, largely driven by its bets on PDD and Luckin, sources familiar with the fund's portfolio said.

The firm has bought more than 2 million PDD shares since the second quarter of 2023, making it its largest holding of U.S.-listed companies, quarterly 13F filings to the U.S. Securities and Exchange Commission show.

Tairen Capital, a $6 billion hedge fund managed by veteran investor Larry Chen, also counts PDD among its top holdings, with other major holdings being U.S. tech stocks.

It cashed in on some profits on the PDD holdings in the last quarter, according to the 13F filings. The fund returned 12% on its funds in the year to October, sources said.

China's slowing economy has made consumers spend less and forced domestic companies to seek growth overseas.

PDD has been a frontrunner in the highly competitive e-commerce market, with net profit soaring 85% in the first half. The low-cost e-commerce giant has become a proxy for the value-for-money consumption trend, analysts said.

The firm ventured into U.S. markets last year through its Temu brand and quickly expanded to other countries, appealing to investors keen on a globalisation and diversification theme.

Similarly, Miniso has been accelerating shop openings outside of China while delivering strong earnings. It opened its first global flagship store in New York in May.

Chinese companies expanding overseas with strong supply chain management and value products have been popular this year as consumers turned frugal, said Andy Maynard, head of equities at China Renaissance Securities.

Maynard said PDD, in particular, has captured market share domestically and globally, making it "somewhat defensive for a China play".

Hong Kong-based hedge fund WT Asset Management’s flagship fund rose 5% in October, sources said. The gain came as it topped up positions in PDD and added Miniso in the third quarter, 13F filings show.

First Beijing, Tairen and WT did not respond to requests for comment.

On average, Greater China long/short equities funds have lost 10% so far this year, while Asia long/short equities funds are down 4%, according to data provider EurekaHedge.

(Reporting by Summer Zhen Editing by Vidya Ranganathan and Sam Holmes)