📉After China Internet Plunge, Can Tactical Rebound Last Longer?
Hi, Tigers 🐯
Did the latest drop in Chinese tech stocks give you a heart attack? You aren't alone.
On March 6, the leading China concept stock index took another hit, closing down 1.4%. Across the board, the screens were flashing red. Look at the heavy damage on some of these major names:
-
$Bilibili Inc.(BILI)$ (-7.00%+): Hit hard by stretched valuations (P/E > 100x) and fears of slowing ad growth. Unconfirmed rumors of higher tech taxes are adding to the panic.
-
$Alibaba(BABA)$ (-2.19%) & $JD.com(JD)$ (-1.32%): Caught in brutal e-commerce price wars. Also, heavy AI investments are costing them a lot upfront, but the profits are slow to show up.
-
$NetEase(NTES)$ (-2.64%) & $Tencent Music(TME)$ (-4.74%): NetEase suffered a 29% profit drop, while $Tencent Music(TME)$ faces massive institutional sell-offs. Both are heavily pressured by newly lowered GDP growth target.
💡 The Big Plunge: Who is Worth Buying the Dip?
When the market bleeds, we have to stay calm and look at the facts.
To find the real opportunities, we need to focus on two things: Fundamentals and Valuation.
1. Are the fundamentals broken?
Absolutely not.
The top companies are still highly profitable with massive, positive cash flows. They are aggressively buying back shares and paying dividends. Their balance sheets are incredibly healthy.
2. How cheap are the valuations right now?
-
They are at extreme historic lows. Just look at the technical data for the $KraneShares CSI China Internet ETF(KWEB)$ (China Internet ETF). $KraneShares CSI China Internet ETF(KWEB)$ 's 14-day RSI has plunged below 20, flashing an extreme oversold signal.
History shows that during similar panic moments in 2015, 2018, 2021, and 2022, this marked a massive turning point.
In fact, one week after hitting these exact levels, the ETF has historically delivered a 100% win rate with an average bounce of 13.8%.
Notably, $TENCENT(00700)$is already leading the charge today, rebounding sharply by 2.89%.
🗣️ Questions for You:
-
Are you buying the dip, holding, or cutting your losses?
-
Which Chinese tech stock do you think has the strongest fundamentals right now?
Leave your comments and win 5 Tiger Coins! 👇
For SG users only, welcome to open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with unlimited trading on SG, HK, and US stocks, as well as ETFs.
🎉Cash Boost Account Now Supports 35,000+ Stocks & ETFs – Greater Flexibility Now
-
Find out more here.
Complete your first Cash Boost Account trade with a trade amount of ≥ SGD1000* to get SGD 688 stock vouchers*! The trade can be executed using any payment type available under the Cash Boost Account: Cash, CPF, SRS, or CDP.
-
other helpful links:
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
