🍟Chinese stocks in-focus🍕

⛳️Alibaba: Show me the Light📱

It might seem intriguing for many that the wonders of the return of Alibaba appear to fall short of a spectacular run-up. Nevertheless, the wild ride of the stock price is likely to stay.

The momentum seems to have slowed down as BABA fell by about 1% on Wednesday. Despite climbing out of the hole on Monday and Tuesday by rising 12%, a look at the overall chart reveals its lowest levels since 2017.

Indeed, the vibrant mood during the early week is boosted by the management shakeup with a new CFO at the helm soon. Further changes include segregating the e-commerce unit into domestic and international markets. The structural change breathes fresh air into the stock, but it is not possible to alter the macro landscape of the company.

Most importantly, the company sees slower growth as sales missed targets and exhibit poorer earnings expectations with a cut in its full-year outlook. It is clear how profits were eaten by weakening margins in a competitive e-commerce landscape.

📉Chinese stocks under Pressure💊

As Alibaba faced regulatory scrutiny both in China and US, the wave of crackdowns continued to weigh on investors appetite for Chinese stocks, as President Xi is determined to tighten his hold on the economic trajectory of China.

Concerns on the future of US-listed Chinese companies is an overhang on many Chinese counters, especially with Didi announcement to delist in the US and move to Hong Kong for a listing, as discussed in our prior updates.

🛎Weibo: Disappointing Start💈

Likewise, we had seen a less spectacular start for Chinese social media giant Weibo, which tumbled in Hong Kong yesterday by about 7%, adding poor sentiments on Chinese tech counters. The company has a primary listing in Nasdaq under the ticker, WB, which was also down for the day.

The underwhelming performance for its trading debut in Hong Kong spells risk-off sentiments on US-listed Chinese assets. Portfolio managers appear to be exploring investing in their HK counterparts stock.

📡Out Revised Outlook🪜

Pika World maintains exposure to the e-commerce giant, BABA, as there are reasons to be optiamistic. It is still a dominant Chinese e-commerce business. It has made a concerted effort to invest in new companies, including cloud computing business and, of course, a potential gain in the food delivery and offline retail business.

We hope you enjoy this read. Have a splendid lunch break

Cheers,

Pika Nat