To The Moon

🌟🌟🌟Chinese stocks  are primed for a great start in April following more evidence of the US soft landing on Friday.  China's manufacturing activities expanded for the first time in 6 months in March according to an official survey on Sunday, adding to a run of indicators pointing to the stabilisation of the world's 2nd largest economy.

$SPDR S&P 500 ETF Trust(SPY)$   increased by 0.18% last week but notched 2 consecutive all time highs on Wednesday and Thursday.  The economic data released was largely supportive this week as Personal Consumption Expenditure (PCE) was in line with economists' estimates.  On Thursday SPY rose 10% year todate  representing the best performance since 2019.

One of the best performers is $TENCENT(00700)$  as its share price has risen 5.7% last week. Tencent is now up 2.4% but is still down 21% in 2023.  On March 20, Tencent posted a weaker than expected 7% rise in 4Q23 as its gaming revenue shrank. 

Tencent is the world's largest video game company.  It reported revenue of 155.19 billion yuan (USD 21.56 billion) in Q423 versus expectations of 157.2 billion yuan by analysts.

Tencent said that it intends to least double the size of its share repurchases from HKD 49billion in 2023 to over HKD 100 billion (USD 12.78 billion) in 2024.

According to Tencent President Martin Lai, Tencent has a pipeline of new games to boost its domestic revenue. It plans to release "Dungeon & Fighter Mobile" in the 2nd quarter which could bring in 3 to 4 billion yuan of revenue.

Tencent is now also focusing on AI.  Its AI Model "Hunyuan" delivers top tier Chinese Language performance and has been scaled to reach a Trillion parameter scale.  A key focus will be on improving the text to image and text to video capability.

$Alibaba(09988)$  said last Tuesday that it had scrapped plans to list its logistics unit Cainiao in Hong Kong.  This is because it is prioritising growing its ECommerce business while facing challenging IPO market conditions. Instead Alibaba proposes purchasing all outstanding shares of Cainiao which is currently valued at USD 10.3 billion.  Alibaba currently holds 64% stake in Cainiao.

Alibaba restructured its business in March 2023, splitting them into 6 units which would eventually raise their own capital and go public. 

Alibaba's Cloud Unit had been expected to be the first to IPO but the IPO plans were scrapped due to uncertainities over US export curbs on advanced chips used for AI.

Performance wise Alibaba is up 2% last Friday and down 5.9% year todate.  In 2023 Alibaba has dropped 28%.

$JD.com(JD)$ 

was up 4% last week.  Its share price has seen an improvement ever since it reported a great Q423 earnings with revenue above estimates and announced that it would increase the size of its share repurchase program. 

JD's CEO Sandy Xu Ran said that the company would establish an international presence with a focus on supply chain.  In February JD said that it was considering acquiring UK electronics retailer Currys that underscored its intention to expand its overseas presence. 

$MEITUAN-W(03690)$  closed 6% high last Friday and has jumped 21% year todate.  In 2023 Meituan was down 30%.  Meituan has a popular Chinese shopping platform for locally found consumer products and retail services including entertainment, dining, delivery, travel and other services. 

$Baidu(BIDU)$  is in talks with Apple to collaborate on AI initiatives.  Apple plans to integrate Baidu's ERNIE Bot as the local large language model (LLM) provider for its forthcoming iOS18, with monetisation occurring through API interfaces. 

Baidu's shares is up 3% today and in the past 5 trading days, it has risen by almost 4%.  However Baidu is still down 6% year todate and in 2023, Baidu has dropped 27%.

Baidu is the Google of China as it is used predominantly there.  It has 76% of the market share.   Baidu is very much into AI.  In October last year, Baidu unveiled its latest version of its Generative AI model   ERNIE Bot 4.0 with improved capabilities.  In November 2023 Baidu has launched the paid version of Ernie Bot on a subscription basis at 59.9 yuan or USD 8.18 per month.  This will provide additional revenue for Baidu in addition to its growing advertising business. 

I believe that Tencent, Alibaba, JD. Com, Meituan and Baidu are great buys as they are undervalued and oversold.  With improving economic growth and government stimulus, they are great stocks to buy and hold long term.  China is the world's second largest economy and  will grow exponentially well into the future.  

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