To The Moon

🌟🌟🌟$iShares MSCI China Multisector Tech ETF(TCHI)$ seeks to track the investment results of an index composed of large and mid cap Chinese companies at the forefront of technological innovation.  These include A Shares, H Shares, B Shares, Red chips and foreign listings.  

The MSCI China Index select constituents from 27 tech related sub industries across communication services, consumer discretionary, financials, healthcare, industrials and information technology.   The resulting portfolio is weighted by market capitalisation, subject to a 4% capping per single group entity.  The index is rebalanced quarterly.

The Top 10 holdings include $XIAOMI-W(01810)$  $Alibaba(09988)$  $JD-SW(09618)$  $TENCENT(00700)$  Lenovo Group, Baidu, Kuaishou Technology, Haier Smart Home, New Oriental Education and Contemporary Amperex Technology.

Top 10 holdings weightage is 39%.  Total number of holdings is 155.  The expense ratio is 0.59%.  Dividends are paid every 6 months.  The current dividend yield is 4.83%.  TCHI goes ex dividend on December 17 2024.

Xiaomi is a well known Chinese conglomerate that makes smartphones, mobile apps, laptops, home appliances.  Xiaomi has also tapped into the EV market with the launch of its EV Model SU7 that is doing very well.   

In the 2nd quarter of 2024, Xiaomi's innovative businesses, including smart EVs, generated a total revenue of RMB 6.4 billion (USD 900 million) with a Gross margin of 15.4%.  Xiaomi now expects to meet its target of 100,000 cumulative deliveries of Xiaomi SU7 series in November 2024, ahead of its schedule. 

Alibaba is an ECommerce Giant that has recently converted its secondary listing in Hong Kong to a dual primary listing in August 2024.  This would allow eligible  mainland Chinese investors to purchase Alibaba shares through a stock connect program.   Since then its share price has been on an upward trajectory, rising by 5.1% in the past 5 days and 18% year todate. 

JD.com is an online retailer that sells electronics products and general merchandise through mobile applications and online platforms.  The difference between JD.com and Alibaba is that JD.com is China's largest direct retailer while Alibaba's Taobao and TMall are 3rd party online market places. 

In August, JD.com reported an excellent Q2 24 earnings with its net income increasing by 92.1% to RMB 12.6 billion (USD 1.7 billion) from RMB 6.6 billion in the previous year quarter.  This is due to its efforts to strengthen supply chain capabilities and user experience, leveraging its growing economies of scale and procurement efficiencies.   JD's focus to bring users every day low prices without sacrificing quality has resulted in increased sales and robust user expansion. 

Tencent is a world leading Internet and Tech conglomerate that owns a diverse portfolio of assets primarily in the technology, entertainment and social media sectors.    Tencent owns China's most popular messaging app, WeChat with over 1 billion monthly active users.  For many Chinese consumers, WeChat is part of daily life, helping them to organise tasks such as paying bills, ordering food delivery and calling a taxi. 

These are just the 3 best Chinese Technology conglomerates in TCHI.

What I like about TCHI is that it has an equal weighted market cap on its holdings so that no more than 4% weightage can be assigned to each holding.  TCHI is also well diversified with 155 holdings, offering the best Chinese Tech stocks in just 1 ETF. 

The dividends of TCHI are great too at the current dividend yield of 4.83%. 

Performance wise TCHI is up 3.4% in the past 5 days but down 6.8% year todate.  In 2023, TCHI has dropped 7.7%.

Morningstar has awarded a Gold medal to TCHI, its highest level of conviction effective from July 31 2024.

With the Feds cutting the interest rate by 50 basis points, I believe that TCHI will continue its upward momentum.  At the last closing price of USD 15.27, TCHI is a great Buy as it has lots of exponential growth ahead.  China is the world's 2nd largest economy with a population of 1.4 billion people.  I believe that my portfolio is not complete without including TCHI ETF. 

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