πππIt's Doom and Gloom in the Chinese markets yesterday as Chinese shares faced heavy selling pressure after a raft of data released showed slowing economic growth, a slump in property sector and declining population.
The benchmark CSI 300 declined 2.2% and closed at nearly 5 year low. Hong Kong's Hang Seng Index sank 3.7%, closing at its lowest level in almost 15 months. The index has lost more than half its value since the peak in February 2021.
Amidst the Bearish sentiments in the markets, there are some wonderful pockets of opportunity. Chinese stocks are oversold and undervalued and it's time to go Treasure Hunting!
is a China EV and Battery Giant. It is the world's largest EV manufacturer and the number 1 automaker in China. In 4Q23 BYD sold more than 500,000 battery electric vehicles or BEVs worldwide, beating Tesla for the 1st time. BYD's vehicle production also increased significantly in 2023. It reached 3.02 million vehicles in 2023, almost twice as high as in the previous year. BYD sells around 90% of its vehicles on the domestic market. It is planning to build a new factory in Hungary as well as Thailand in 2024.
created a sensation in CES 2024 with its new modular flying car - the XPeng AeroHT! XPeng said that its modular flying car will be massed produced and delivered in 4Q25. Imagine you are driving and you hit a traffic jam. With just a button you can unfurl the folded wings of the vehicle and take off to the sky!
XPeng has also begun deliveries of its new model X9 which is the highest priced in XPeng 's product lineup and will help boost XPeng' s gross margins.
XPeng had also signed an agreement with Volkswagen to develop 2 car models for the German Automaker in 2023. This will also help boost XPeng's entry into the European market.
delivered a record 50,353 vehicles in December, up 137% year on year, up 22% from November and 376,030 for the full year 2023. Li Auto is now aiming for 800,000 annual deliveries in 2024 as well as 100,000 monthly deliveries according to Li Xiang, Li Auto's Founder and CEO.
Li Auto currently sells 3 models, the Li L7, Li L8 and Li L9. Li Auto will launch the Li Mega MPV on March 1. Li Auto is also expanding overseas with its first stop in the Middle Eastt in 2024. Li Auto has been profitable for 4 consecutive quarters.
Is the fastest growing Chinese ECommerce company in 2023 due to its growing popularity of its international ECommerce arm, Temu. Temu is now available in 48 countries, including Europe, Middle East as well as Australia and South East Asia.
Temu was the major driver for revenue growth and it also outstripped growth of Alibaba and JD.com by a large margin.
PDD's share price has jumped 57% in 2023 and it looks like PDD will continue its impressive growth in 2024.
Is a leading Internet and game services provider centered around premium content. With extensive offerings across its expanding gaming ecosystem, Netease develops and operates some of the most popular and longest mobile and PC games in China and globally.
Netease's reported its 3Q23 earnings in November. Its Net revenue increased by 11.6% to RMB 27.3 billion or USD 3.7 billion. Games and related services saw an increase of 16.5% year on year. Youdao net revenue increased by 9.7% while Cloud music net revenue decreased by 16% year on year. Gross Profit was RMB 17 billion or USD 2.4 billion, an increase of 23.4% year on year.
Net income was RMB 7.8 billion or USD 1.1 billion. Non GAAP net income was RMB 8.6 billion or USD 1.2 billion.
Netease 's Justice mobile game gained robust revenue and growth, accumulating over 50 million registered players. Dunk City Dynasty, Netease' s first self developed basketball game topped China's iOS top grossing chart in October.
Cloud Music strengthened its music centric membership monetization and improved profitability.
Youdao achieved record revenue, driven by growth in its learning services and online marketing services.
China is the world 's second largest economy with 1.409 billion people. I believe that it will continue to grow exponentially in the future and the current doldrums is just a temporary setback.
I will continue to keep faith with my Chinese investments and bargain hunt quality stocks like BYD, XPeng, Li Auto, Pinduoduo and Netease in the strong belief that they have what it takes to power their way into the future with compound growth.
As Warren Buffett likes to say, When there is Fear in the markets, it is time to be greedy.
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