💎General Motor and China Policy 💎

🚘General Motor: Rising Star?🚀

General Motors hasn’t been a favourite among investors. However, we have covered the stocks numerous times and the reasons to be bullish remain. As a legacy car market, it is transforming to hit a $300 billion revenue by 2030. Nearly one-third of the revenue is likely to come from EVs. 

In its recent CES shows in Las Vegas, we saw the unveiling of the Silverado EV pickup, which will be released for sale next year has a range of more than 400 miles that exceed those of the F-150 Lightning Ford electric truck series. 

Investors aren’t warm to the stock. It is trading at around 9 times its projected 2022 earnings, a far cry of 117 times multiple for Tesla. The market capitalisation of GM is also only one-tenth of Tesla. 

GM has a big, bold plan. It is also working with POSCO chemical, an EV battery materials maker in Korea, with the ultimate goal of building a plant in America. If it is successful, it will help lower the cost of batteries and ensure it has a firmer hand on supply chains. 

Pika World continues to favour entry exposure to the company. 

💵China: A looser monetary policy🎉

Monday ushered in good news for Chinese equities as the cut in 2 key interest rates. While the Chinese economy grew by 8.1% in 2021, the last quarter growth showed weakness. 

This is not surprising given a sharp slowdown in consumer spending due to the Omicron lockdown in some cities and the government crackdown on leverage within the property sector. Manufacturing capacity is also expected to remain weak for the next few months. 

Pika World will be cautious on any material slowdown in China that may hamper the global growth recovery narrative. 

We hope you enjoy this read and see you in the next one!

Cheers, 

Pika Nat.