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The Crisis every investor is waiting for. What you gonna do? #2What to do in the next 6-9 months with existing risk factors? Educate yourself to come to a conclusion. Do not blindly follow "experts". In the current situation we are facing several risks to the stock market. I listened to a lot of so called experts. They tell you what sounds great, what you want to hear. Most of them get paid for being on the show even it is a ZOOM call without pants. They talk anything and get paid. Do they do any research or do they collect opinions off FB and Twatter? My experience is stop listening to background noise. Improve your own skills and do research and LEARN economics and financials. The Market commentary will always be totally diametric. As a seller of an asset in a trade and the buyer of the same asset have both diametric expectations of the market. So find your own. There are a few good YouTuber out there I listen regularly in but even though I like them and they put positive thoughts into my head do not trade what they say. You can take the idea but you MUST do your own research. It is said that any stock pick of an "expert" is as got as letting a chimpanzee chose any trades. The outcome for the Chimps is better by a bit. If you killed your account in the process come back and let me know how it worked out. Or after you lost your first account of $20,000.00 and you got up again, we can talk about your baptizing. All good traders lost a huge amount of money before they made it right. Having said this I can only encourage people to get financially literate. Brokers and charlatan educators rigging against you. They make huge money and you lose 90% of the time 90% of your money within 90 days. Please be advised, I am not a financial adviser. I am not recommending any trades. I might be just a crazy guy with a wild brain. If you want to see the picture to the story, you have to go to hedgingstocks.blogspot dot com/2021/08/what-to-do-in-next-6-9-months-with.html. As a content provider I should not pay for images. I do not take money either. I listed the risk factors already. This is only my personal opinion. What factors could that be. Inflation Wage Inflation Money Supply Money circulation Housing bubble The Warren Buffet indicator China Regulations China Currency Manipulation China Delta Variance of Covid the huge wild card! WE MUST ADD WAR WITH CHINA to the equation, Taiwan And I wrote about a few of them. Inflation Wage Inflation Money Supply Money Circulation I made a research on the housing market and if we are in a bubble that is about to burst. I do not think so for the near future. But this is a very long analysis with lot of graphs that made me conclude that the housing bubble will NOT be the IED, not the roadside bomb that will bring the market down. My biggest candidates for now are The China Delta Variance of Red Covid 19 the huge wild card! Chinas potential attack on Taiwan. Inflation and hence the start of tapering by the Feds. For those reasons without explaining them any further I want to explain my perspective and the focus of my trades for the next six month. I concluded that 1. The down side risk is growing and buying dips is getting too risky. I am closing my long positions slowly. 2. Tapering might start October and being announced in September during the FOMC Two-day meeting in September 21-22. 3. This will take money out of the stock market and put it into the Bond Market. It will increase YIELDS and decrease Bond Prices. 4. The FOMC said that they will start tapering with both, reducing the artificial demand for bonds and MBS. 5. MBS, Mortgage Backed Securities are basically mortgages of smaller banks that their head quarters put together in a DEBT security and sold them to the FEDs. This is a 12 billion Dolla business per month increasing the debt burden of future generations. The banks convey the default risk to the Feds /tax payers and some interest from the mortgages. The original bank keeps a portion but very little risk. If the Feds stop buying those MBS they will give the risk back to the local banks and they will have to tighten their lending rules to reduce the increased risk of defaulting. Also this will reduce revenue with the loss of selling those MBS. Financial sector will cool down during tapering. 6. The Bond market will cool down too. Yields will rise. The Feds will reduce buying Bonds and hence the prices will fall. Since the prices of these assets are falling their yield (state guaranteed interest rate) will increase. When the yield of an assets stays the same but you pay less than face value of that asset then your yield goes up. The yield /(interest) is NOT bond to the selling price of that asset but to the face value printed on that NOTE or BOND. Thats why it is said when the Feds keeps buying bonds it keeps the prices artificially high, they are manipulated, to keep the yield down. And of course the smart money goes into the stock market. There is much more to make. Got it? (Images are available on my other blog) Here is the 10 years Bond yield 7. The Stock Market will crash with a conflict with China. Foreign countries will take their money out of China stocks and the Asia region and flee to the US Dollar buying bonds. This bond buying might counter the yield a little. But all transactions will be conducted in USD. A conflict with China will shock the Asian markets. 8. An conflict with China will force the Feds to print more money to finance war efforts, especially if they continue over a longer period of time. It will put additional pressure on inflation during and after the war. A smaller regional conflict will not have a huge impact, as we experienced already. See image. 9. Either way, with tapering the US Dollar will rise due to the above mentioned traditional reaction. 10. With an increase of Interest rates, next year as the rumors are, the banking sector will do better. increased interest rates always benefit the banks. 11. A war over Taiwan and may be an attack on Israel by Iran or vis versa, will bring the oil and all commodity prices up big time. this will have a positive impact on oil prices and a negative impact on air travel, hotels and cruisers. 12. A review of 20 major geopolitical events dating all the way back to World War II showed stocks had fully recovered losses within an average of 47 trading days (10 weeks) after an average maximum drawdown of 5%, according to a CFRA study. (images not possible here) An attack on Taiwan I consider more like of the level of the Iraq invasion or Pearl Harbor. It will send shockwaves through the market and reorganize priorities. China might be out of the window. It will have a huge impact. 12. In the case of a conflict with China, not small Iran or their proxies, the US Dollar will gain in value. Why is that? Shipping routs will be interrupted. Heavily needed Commodity Prices will rise. Oil prices will rise and so do chemical products. The US dollar would rise because it is the reserve currency of the world, and a hedge against uncertainty. Almost all petrochemical contracts as well as oil and other commodities are denominated in the US dollar. The sole exception to this rule is China. A rising Dollar will be anti inflationary. 13. Contradicting this approach will be the wild card of the China Delta Covid. If there are more shut downs coming, more port closures and transportation chain bottle necks, inflation in the PPI and later in the CPI will increase. But the cocaine operation of the Feds (buying MBS and printing money) will continue and tapering will not start. Keep doing what we are doing, buy the dips. Then inflation will start to increase the pace, rate of inflation will rise. Conclusion We have four levels. and each of them requires different actions 1. Inflation and hence the start of tapering by the Feds. 2. Cooling of the Money Velocity, M2V, and the increase of interest rates. 3. The Delta Variance, the huge wild card! 4. Chinas attack on Taiwan. 1. Inflation and hence the start of tapering by the Feds. Go long USD, buy UUP ETF, US-Dollar ETF Go Short AUD, Australia has a huge lockdown in place and its economy also is 20% depending on China. Shorting the Aussie looks good to me. Find an Currency ETF you can trust, USD / AUD and go long, not the other way around. Sell Bear Call Credit Spreads since the markets will rise slower and the strike might not be triggered. I chose Short Call 3 Standard Deviation OTM on the QQQ and SPY then Long Call for hedging $10 above that price. Maybe with tapering you could sell at 2nd standard deviation. I am not sure about this yet. 2. Cooling of the Money Velocity, M2V, and the increase of interest rates. Go long USD, buy UUP ETF, US-Dollar ETF, rising interest rates are good for the USD. Go Short AUD, Australia has a huge lockdown in place and its economy also is 20% depending on China. Shorting the Aussie looks good to me Sell Call Bear Credit Spreads since the markets (QQQ, SPY, IWM) will rise slower and the strike might not be triggered. I chose Short Call 2 Standard Deviation OTM on the QQQ and SPY then Long Call for hedging $10 above that price. Buy Diagonal Put Debit Spreads. Go long PUT 1 standard Deviation OTM, 3 months DTE and to lower costs with buying the same PUT BUT with a shorter DTE (maybe 1 month) to cover costs, assuming that the strike will not be hit until in one month. Or Sell Calendar Spread 1 standard Deviation OTM. 3. The Delta Variance, the huge wild card! If lockdowns are announced and the economic recovery seems to slow, stagflation, the Feds money will continue to flow. Inflation will rise and the Stock Market will rise. I will do the same as above but move my strikes for the credit spreads to the third Standard Deviation and reduce DTE from 45 days to 30. Additionally to what is said you can do the following. Maybe the better choice in short term. Buy a Call Diagonal Spreads with two different Strikes and Expiration Dates. Buy Call with a DTE, maybe one month. Buy it OTM, one StandDev. Sell a shorter term Call, maybe two weeks, further OTM, maybe 5$ for the QQQ to reduce costs. You expect the short position to expire worthless at date of Expiration and the long Call still continues in the money, ITM, for the next two weeks. Buy Calendar Spreads with the same strike but two different Expiration Dates, maybe one month and 14 days. Buy it OTM with one month DTE, Sell a shorter term Call further OTM, same strike to reduce costs. You expect the short position to expire worthless at date of Expiration and the long Call still continues since the strike price is not yet hit. So be careful choosing the Strike! 4. Chinas attack on Taiwan Go long Oil ETF, COG, CABOT OIL & GAS CORP; NRT, NORTH EUROPEAN OIL ROYALTY TRUST; Refining companies (Lists not possible to post here) Integrated Oil (Lists not possible to post here) Sell shares in Chinese ETFs or companies, they will instantly lose value. Be conscious about the spread. Be careful not to buy options, they might not be respected. You can google them. Go large caps. (Lists not possible to post here) Buy USD. It is said USD will rise and so inflation. A war with China there will be no doubt that they will pump money into the system. Inflation will rise and uncertainty of foreign countries will seek save harbor in the USD How to set up a Bear Call Spread will follow . I just cannot put this all into one article. At least here is a guide line. Technicals are secondary but important. Now we could look at the charts and look how to set up the trade since we know what to look for and we will listen to the news and watch the indicators to confirm our assumptions. Be careful at those times. SPY, S&P500 market index ETF DIA, Dow Jones Market Index, ETF IMW, Small Cap Russel 2000, ETF QQQ, NASDAQ, ETF VIX, Volatility Index, reacts inverse to S&P500 AUM, AUD in USD Index UUP, USD, ETF AAPL Stocks as leading indicator for QQQ and SPY
NASDAQ:QQQShort
by Option_Crusader
Big weekend leading up to Jackson HoleWow! Markets are coming to a head fast! S&P futures have been low volume and ripe with volatility growth. Jackson Hole approaches and hedging / volatility futures have priced in movement to the downside. Bears are waking up from a long 1.5Y nap after feasting in March of 2020. China Tech sector continues to get pounded. Why is China Tech sector so important? Like the QQQ & Mega Caps led the S&P growth, so has the China's tech sector. The TVC:NI225 has been in decline since Feb as a result of several controversial decisions the Chinese Gov have made including the crack down on crypto and US listed companies. Last Friday the TVC:NI225 crossed over the 50/200MA death cross and a descending wedge breakout. Yesterdays close was the first close below the breakout line and last night the decline continued its breakout downward. This is important because of the gap that has formed between the S&P 500/QQQ/DIA and recently rejected the top of the TVC:NI225 descending wedge. I'm starting to think the bulls have ran out of steam and will continue to get pulled down by the declining Chinese tech sector and unwinding volatility into September that could put the markets into a 10-12% correction territory sooner than later.
CME_MINI:ES1!
by SPYvsGME
BYD, China's Next Hardware GiantAccording to Wilson's report, the average price of BYD's vehicles has surpassed that of popular joint venture brand Volkswagen by about CNY 10,000. BYD is an automobile company that provides vehicles, EV batteries, semiconductors and electronics foundry services. We estimate its stock's value based on the sum-of-the-parts (SOTP) method. The company's EV and battery businesses account for most of the valuation. We consider BYD to be currently undervalued and expect a 22% upbeat. In 2020, the Chinese NEV market had a stellar performance – NIO, Xpeng and Li Auto all delivered considerable volumes of vehicles. Meanwhile, we spotlight BYD, a car maker once invested by Warren Buffett, as a best-in-class electric vehicle company. With its solid fundamentals, BYD is likely to become a major hardware conglomerate – much like Tencent or Alibaba in the consumer Internet sector. This article will examine the company's business segments, touch upon potential risks, and conduct an SOTP analysis to value its shares. Intro Wang Chuanfu incorporated BYD in 1995, inspired by the prospects of the Li-ion battery applications. Since then, he has led the company, building it into an agile manufacturing mammoth capable of starting new ventures and succeeding quickly across many fields. For one, BYD started to produce face masks in the first days of the COVID-19 outbreak and has now become the biggest mask producer worldwide. Its business segments remain the same though – those are internal combustion engine (ICE) vehicles, EVs, power batteries, auto semiconductors and electronics assembly services. Auto OEM BYD sells both ICE vehicles and EVs, primarily in China (but is getting more active abroad). In 2020, it sold 231,000 units of ICE cars, a year-on-year (YoY) increase of 3.8%. The parts sales accounted for a significant share of total revenue but remained less profitable. Now, BYD is full speed ahead to transform itself into an EV-based company. Because BYD didn't disclose its total ICE car sales revenue, we broke down its revenue streams and assumed the average selling price (ASP) was between CNY 100,000 to CNY 110,000. Therefore, ICE generated revenue of CNY 24 billion in 2020. We expect the ICE business will drop 10% in the next few years as the sales momentum will shift to EV. In 2022, the revenue will reach CNY 19.4 billion. With a 2x PS ratio based on Great Wall Motor and Geely Auto, the ICE business will be valued at CNY 38 billion. In the meantime, EV sales has become the most valuable business – last year, BYD sold 162,000 EVs, a YoY decrease of 12.5%. After upgrading the 'dynasty' EV series, BYD entered the middle-to-high-end market. The series adopts self-made 'blade batteries' to prevent EV from battery catching fire. The hit model 'Han,' a car somewhat similar to Tesla's Model 3 and Xpeng P7, sold 8,522 units in July, surpassing the sales volume of NIO and Xpeng. According to the 2020 financial report, BYD made CNY 24.4 billion in revenue from EV sales. We project the EV sales will increase by 100% (based on the fact that sales from January to July 2021 surpassed last year's figure) and by 25% in 2021 and 2022, respectively. We also assume the ASP will increase by 5% in 2021 and 2022 as more high-end models are delivered. For these two years, the revenue will hit CNY 51 billion and 67 billion. With a 10x 2022 PS ratio, the EV department is worth CNY 670 billion. Power battery sales is another core business for BYD alongside EVs. According to SNE research, BYD's installed capacity reached (link in Chinese) 7.8 GWh during the first half of 2021, ranking No.4 worldwide. This is 23% of CATL's installed capacity. Therefore, conservatively speaking, we estimate the market capitalization of BYD's battery division will be one-fifth of CATL's. Thus, the power battery business is worth CNY 240 billion, based on the fact that CATL's market cap had already reached CNY 1,200 billion as of August 9, 2021. BYD Semiconductors Semiconductor manufacturing is another important segment for BYD. It is set to be spun off from BYD to go public. It features auto semiconductors, which provide IGBT, smart control IC, sensors and optoelectronic semiconductors. BYD semiconductors can independently design, manufacture, package and test chips. It is the only company to achieve this in China. Based on our latest report, auto chips will be in high demand as more vehicles will be electrified in the future. As per BYD's 2020 report, the semiconductor business was valued at CNY 7.5 billion in May 2021. We believe the figure will triple while launching on the open market. It is estimated that BYD will deliver semiconductors worth up to CNY 20 billion. BYD Electronic Apart from providing high-end products, BYD also made CNY 60 billion toplines (38% of total 2020 revenue) from assembling smartphones, tablet computers and laptops. These products show low profitability similar to other electronics foundries like Hon Hai Precision. We refer to Hon Hai's 0.25x 2022 PS ratio and project 12% growth in the next two years. We calculated that BYD Electronic is valued at CNY 18 billion. To sum up, BYD is valued at CNY 988 billion. Even so, we think the estimation is a bit conservative as some assumptions aren't considered in it. BYD's EV will deploy more self-made batteries and chips, which will save a lot of costs for the company in the long term. What's more, rumors said BYD's battery had been tested by Tesla and would likely be equipped with Tesla's vehicles. This potential opportunity will significantly boost BYD's valuation in the battery division. Risks BYD's EV sales were affected by the industry's downslide in 2019 and 2020. Moreover, the EV market has been involved with intensified competition, as proved by the price slash of a few models and few companies leaving. BYD, with its comprehensive business mix, should have the means to face these challenges. Conclusion Viewed as part of the big picture, BYD is a company less profitable than some of its auto peers – one with a 2.6% net profit margin in 2020. We consider the company to have set margin improvement as a long-term goal, while also expanding in the EV battery and related battery segments. Although BYD just saw a market cap rally in the past few days, we believe it is still undervalued and has a 22% upbeat opportunity as of August 20, 2021.
OTC:BYDDFLong
by EqualOcean
$KXIN Ready for a Rally ? Merger Talk?!Scince the announcement of $KXIN that they will enter the "small Electro Vehicel" market shares are already going strong with high volume ... Now we have news about a merger and there are some rumors of possible partners in play .... technical we see some S/R flips in and we have just recently closed above another resistance ... in case we can break this resistance zone there are no doubt of a price around 5$ a share ,this is also our next bigger resistance level , after market is able to break that level we have open space all the way to 10$ a share ... Time will tell .... and always remember you are not married to the stock nor you wanna be a bag holder ;-) good luck and have a great week Trueman23
NASDAQ:KXINLong
by Trueman23
2
Niu Technologies Announces Q2 2021 Financial ResultsIn Q2 2021, the company generated CNY 944.7 million in revenue, with a year-on-year increase of 46.5%. According to Niu Technologies' Q2 2021 financial announcement: - Revenue rose by 46.5%, reaching CNY 944.7 million. - The gross profit margin was 22.7%, compared with 23.0% in the same period of 2020. - Net profit hit CNY 91.8 million, representing a 61.6% growth, and the net profit margin was 9.7%. - In Q2 2021, the company's sales volume hit 253,000 units (up 58.0%), with only 2.8% sales from overseas markets. - Among the firm's major business, the revenue of electric scooters in the domestic market recorded CNY 758 million, representing a growth of 44.9%; its overseas revenue from electric scooters hit CNY 57.7 million, increasing 1.2% compared with 2020. - The sales from low-priced models G0 and F0 represented 30.4% of total sales volume, declining from 38.2% in Q1 2021, with revenues pre scooter up 8.3% month-on-month. - At the same time, Niu Technologies' sales and marketing expenditure reached CNY 68.9 million, showing an increase of approximately 51.1%; its R&D expenses hit CNY 30.8 million, with a rise of about 28.7%. - By the end of August 16, 2021, the company's market capitalization was USD 1.7 billion (about CNY 11.0 billion), evaporating by CNY 15.4 billion.
NASDAQ:NIU
by EqualOcean
The worst is over for Chinese stocks BABAIf you are a long term investor I hope you used the panic to top up your holdings. If you are a momentum trader you still have the opportunity to ride the bounce or accumulate your position a bit later. Possible scenario for BABA but all names have something similar is as follows. I treat that panic as an exhaustion and behavioural pattern confirms that so I consider the worst is over. Personally, I played that dangerously catching falling knives and loosing hairs so my words bring some sort of hope, but from technical perspective the situation is as follows. Another option is to treat the current leg up as a retest of the previous support but usually when you have seen that sort of panic and all the papers writing the same thing - it is just over. I expect some turbulence at this resistance since bears will try to play down the move but final move is gonna be UP. The first arrow is my initial momentum play. I expect to see some kind see-saw after the first leg and the second arrow reflects my further expectations.
NYSE:BABALong
by crazywlst
The worst is over for Chinese names BIDUIf you are a long term investor I hope you used the panic to top up your holdings. If you are a momentum trader you still have the opportunity to ride the bounce or accumulate your position a bit later. Possible scenario for BIDU but all names have something similar is as follows. I treat that panic as an exhaustion and behavioural pattern confirms that so I consider the worst is over. Personally, I played that dangerously catching falling knives and loosing hairs so my words bring some sort of hope, but from technical perspective the situation is as follows. Another option is to treat the current leg up as a retest of the previous support but usually when you have seen that sort of panic and all the papers writing the same thing - it is just over. I expect some turbulence at this resistance since bears will try to play down the move but final move is gonna be UP.
NASDAQ:BIDULong
by crazywlst
2
Oil futures- Aneeka Gupta, Director, Research, WisdomTree Europe Why have declines accelerated in recent weeks? Oil price declines have been accelerated by concerns about the spread of the Delta variant in China its impact on oil demand. China being the second largest oil consumer and the largest oil importer plays a dominant role in the oil market. These concerns were fuelled by July activity data published overnight in China by the National Bureau of Statistics (NBS) which fell short of expectations across the board. Industrial production grew by 6.4% (1 National Bureau of Statistics (NBS) ) year-on-year (yoy), marking the lowest rate of growth in a year. Fixed asset investment excluding rural growth slowed to 10.3%1 yoy in July, from 12.6%1 in June, below the consensus 11.3%1 which also highlights lack of governmental support. Retail sales also pulled back significantly to 8.5%1 yoy in July from 12.1%1 in June below the consensus 10.9%1. Last week both the International Energy Agency (IEA) and Organisation of the Petroleum Exporting Countries (OPEC) painted less optimistic outlook on the oil market in the monthly reports. The IEA lowered its demand forecast for the second half of 2021 by a considerable 600,000 (2 International Energy Agency (IEA)) barrels per day. The oil market would then only remain slightly undersupplied if OPEC+ kept its oil production below target. The IEA expects a sizeable surplus next year if OPEC+ sticks to its plans and fully reverses its production cuts. The monthly OPEC report shared a similar view to the IEA, that next year’s call on OPEC will be 1 million barrels per day lower than previously envisaged. This is due to noticeably higher non-OPEC supply in particular from Russia. According to the IEA, oil stocks in industrialised countries in June were 66mn barrels below the pre-pandemic five-year average. Another trigger for last week’s oil price slide was driven by headlines from the White House calling on OPEC+ to increase production to cool elevated oil prices. What can we expect from oil in the second half of the year? Oil prices appear to be struggling owing to the short-term impacts from the spread of the new variants of COVID-19. We expect oil prices to trade in a volatile range owing to the uncertainty stemming from the spread of the Delta variant in various parts of the globe. That being said the oil market is currently in a deficit. There is a ray of hope emerging from India, the world’s third largest oil importer, where fuel demand increased to a 16.8mn (3 Reuters) tons in July, a 3-month high after declining to a 9-month low owing to the coronavirus restrictions. Now that infections have abated and restrictions lifted in India, fuel demand in India is garnering momentum. This could also be the case in several parts of Asia as they re-emerge from the stringent containment measures currently in place. Investors currently appear to be overpricing the risk of a decline in demand and underestimating the possibility of geopolitical risks. We expect oil prices to end higher by year end. This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
TVC:USOIL
by aneekaguptaWTE
EO500 Tracker: Tencent Boost Overseas Sales Amid COVID-19Founded in 1998, Tencent is one of the oldest big tech companies in China. The tech giant has dominated the entertainment universe, focusing on integrating its digital ecosystem. With the acquisition of Riot Games, Tencent has amplified its global influence in the entertainment and game industries. In recent years, while its funding activity in some countries, like Korea, were entertainment-focused, the firm's M&A and investment in other regions, such as India, were more comprehensive, aiming to build an ecosystem. In 2020, the company invested more than CNY 275 billion (year-on-year growth of 84%) in overseas markets, focusing on North America, Asia and Europe. Meanwhile, its overseas revenue hit CNY 33.9 billion in 2020 compared with CNY 16.7 billion in the previous year.
HKEX:700Long
by EqualOcean
EO500 Tracker: BYD Boosts Overseas Sales Amid COVID-19 PandemicCOVID-19 has severely affected global markets. As per the recent IMF report, the world's GDP declined by 3.5% in 2020, with a significant increase in unemployment, disposable income reduction and lowered productivity in secondary and tertiary industries. At the same time, this period of turbulence separated the wheat from the chaff, filtering out uncompetitive companies. Adjusting their businesses, many firms have responded with localization strategies, while others have seized opportunities in overseas markets to reinforce their global influence. Among the 45 largest (by market cap) publicly-traded EO500 companies, 16 firms saw their overseas revenues increasing in 2020. In this regard, BYD, Xiaomi and Tencent were among the best performers, with year-on-year growth of 203%, 34% and 103% respectively. Founded in 1995 and swiftly known as a pioneer in battery technology, BYD (01211:HK) expanded its footprint worldwide, with operations in over 50 countries and regions. It has a strong market presence, principally participating in the automobile business, offering traditional fuel-engine vehicles and new energy vehicles, rechargeable batteries, handset components and other related products. With the strongest performance in the international market amid the pandemic and global economic uncertainty, the company's overseas revenue rocketed from CNY 19.5 billion to CNY 59.1 billion, establishing a leading position in the global new energy vehicles sector. Such a massive growth was driven mainly by the combination of improved product quality and growing demand. With a patent portfolio covering lithium iron phosphate batteries, control technologies in bidirectional converters and high-power charging systems, BYD continues building its high-tech prowess. Besides the firm's technological advancements, cost advantage is speeding up the process as well. In recent years, BYD tried to localize its production worldwide, establishing manufacturing plants in numerous countries like the US, Brazil, France and Hungary. This long-term development strategy helps the company minimize costs and avoid tariffs, providing advanced after-sale services.
OTC:BYDDFLong
by EqualOcean
EO500 Tracker: Xiaomi Boosts Overseas Sales Amid COVID-19Among the 45 largest (by market cap) publicly traded EO500 companies, 16 firms saw their overseas revenues increasing in 2020. In this regard, BYD, Xiaomi and Tencent were among the best performers, with year-on-year growth of 203%, 34% and 103% respectively. Xiaomi (01810:HK), established in 2010, has emerged as a top consumer electronics brand. The company offers numerous products like smartphones, laptops and smart home products, garnering support in more than 100 countries and regions around the world. With a large share of many European and Asian countries' markets, its overseas revenue increased steadily amid the epidemic from CNY 91.2 billion to CNY 122.4 billion, accounting for 49.8% of total revenue. In June 2021, the firm's global mobile phone market share rose to 17.1%, overtaking Samsung (15.7%) and Apple (14.3%). Meanwhile, its mobile phone sales grew by 26% on the back of Huawei's decline and prioritization of 4G and 5G-enabled smartphones, marking it the fastest-growing brand for the month.
OTC:XIACFLong
by EqualOcean
A Glance at Tencent's Insurance Technology VenturesTencent has also sped up its venture into the insurance industry. In 2016, Tencent invested in Waterdrop Inc, which turned out to be China's first Insurtech stock (WDH:NYSE), as one of the angel investors. In 2017, Tencent also received the admission ticket, which is an insurance license for its Weimin Insurance Agency Co., Ltd or WeSure issued by CBIRC. WeSure Launched in 2018, WeSure had attracted about 50 million clients as of November 2020. Meanwhile, the number of its registered users has exceeded 100 million. Benefiting from the powerful data networks of WeChat and Tencent's other platforms, WeSure has provided its partners with vital insurance-related technologies, including anti-fraud, risk identification and precision marketing. Users can make insurance purchases, inquiries and claims directly on the firm's vastly popular instant messaging and lifestyle platforms, WeChat and QQ. WeSure has its own edge competing with AntSure. AntSure focused on 'insurance supermarkets' and relied upon cost-effective products based on natural flow conversion from its ecosystem. On the other hand, the focal points of WeSure are its selective customized products and real-life consulting services, which can provide enhanced one-on-one services to help customers with insurance configuration, claims assistance and more. Besides, WeSure has always taken the initiative to partner with foreign insurers, such as AXA and MetLife, to further expand the scope it can reach. In the early stages of COVID-19, WeSure and AXA launched an insurance plan which protected more than 100,000 front-line medical service staff, and the total insured amount of people through WeSure is over 15 million since the outbreak. In addition, WeSure has actively explored charitable opportunities through the use of online insurance; for instance, WeSure established the 'WeSure Charity Fund' to enhance the effectiveness of insurance as a social stabilizer through leveraging the Internet and insurance to increase participation in philanthropy. Bottom line Despite the regulatory shakeups, WeSure and AntSure remain key tech-powered driving forces in China's insurance domain, embracing the potential to reshape the industry landscape. For the full article with the charts, please visit the original link.
OTC:TCEHYLong
by EqualOcean
BYD Enters Europe with Delivering Tang EV in NorwayThe Shenzhen-based firm has imported a total of 100 units of the Tang EV to the Scandinavian nation. The Chinese EV-maker shipped the first 100 BYD Tang EVs from Shanghai to Norway about two months ago which was the company's first passenger car shipment to a European country. BYD plans to deliver as many as 1,500 units of the BYD Tang EV to dealers in Norway this year. The company has pre-sold 500 units in the country already. Along with its Scandinavian distributor RSA, the Chinese auto veteran has built up a network of 45 dealers. The subsidized price of the EV in China is CNY 279,500 to 314,800, while the car will be sold for about 600,000 Norwegian kroner in Norway which is about CNY 130,000 more expensive. In July this year, BYD's sales of new energy passenger cars soared by 262.7% year-on-year to reach 50,057 units, setting a new record for the firm's own monthly sales. It also marked a record high for China's monthly sales of new energy passenger cars.
OTC:BYDDF
by EqualOcean
iQIYI Earns CNY 7.6 Bn in Q2 2021Owing to the success of original TV dramas, the large Internet content company still maintains remarkable revenue in the off-season. On August 12, 2021, iQIYI published the unaudited financial report for the second quarter of 2021. In the second quarter of 2021, its total revenue reached CNY 7.6 billion, up 3% year over year. Among them, the revenue from member services reached CNY 4 billion, accounting for 52% of the total revenue, while the revenue of online advertising services reached CNY 1.8 billion, accounting for 23%. Meanwhile, in the second quarter, iQiyi's revenue cost reached CNY 6.9 billion, of which the content cost was CNY 5.1 billion, basically the same as the same period in 2020. It is worth mentioning that the company's net loss was reduced to CNY 1.4 billion, which has narrowed year-on-year for five consecutive quarters. The company also announced that, as of June 30, 2021, the company had 106.2 million subscribers. Yu Gong, CEO of iQIYI, said that although the second quarter was an off-season, driven by the company's continuous launch of original TV dramas, its subscription members increased significantly and continued to lead the market in a number of operational indicators. At the same time, iQIYI Extreme App for users in sub-tier cities in China and the company's overseas business have shown a strong development momentum.
NASDAQ:IQ
by EqualOcean
A Glance at Ant Group 's Technology VentureThe wave of fintech has spread to the insurance industry, giving rise to the 'Insurtech' and the related niche markets. However, in China, the insurance penetration rate (2.7%) and premium per capita (USD 47) are both lagging, leaving much room for potential. Chinese Big Tech is seizing this opportunity and the competition is just getting started. The term 'Insurtech' is self-explanatory, expressing the blending of technological solutions with insurance. By applying such technologies to various scenarios, insurance companies boost service quality and expand their product portfolios. In a broader sense, Insurtech is an innovative technology cluster consisting of new digital tools developed to optimize the performance of insurance companies and to deliver a better customer experience. A strong point of Insurtech to date has been strengthening companies' underwriting abilities by incorporating artificial intelligence-based risk assessment. This boosts revenue by allowing them to move into adjacent niche markets. The emergence of new technologies has installed new dynamics in insurance products while also adding more complexities. When traditional insurance companies and Internet giants are drawn to share a piece of the market, the competition is likely to intensify in the short term. The Chinese insurance market has grown rapidly over the past decade, and so has the Insurtech segment. The tremendous development that Insurtech has experienced was mainly driven by changes in customers' behaviors (according to EY, 59% of mainland China's life insurance consumers' preference for interactions and relationships with insurers skews strongly toward digital), technology advancements (big data, IoT, blockchain, Cloud computing, etc.) and more supportive policies. Several internet giants in China have entered the market as distributors by utilizing their large volumes of traffic, while the traditional risk carriers – or to say, insurance incumbents, have also made scaled investments in technology solutions. Other technology enablers, such as start-ups focused on specific pain points in insurance operations, have accounted for a part of the whole market as well. Ant Group's insurance play In July 2017, China Banking and Insurance Regulatory Commission (CBIRC) announced the approval of the establishment of Hangzhou Baojin Insurance Agency Co., Ltd, a wholly-owned subsidiary of Ant Financial. After six months, the company officially changed its name to Ant Insurance Agency Co., Ltd — the same old trick other big names always play — which hinted at the company's ambition to fully enter the insurance industry. AntSure (as it is named in the English version of Alipay), a one-stop platform for servicing insurance needs, is designed to assist insurance company partners to provide a wide range of innovative, customized and easy-to-obtain products. Up to H1 2020, the Alipay-owned insurance platform had closely cooperated with over 90 Chinese partner insurance institutions, offering over 2,000 products, covering areas from life insurance, health insurance to property insurance and other customized products. The company's revenue mainly comes from the technical service fees paid by the partners based on the premiums and apportioned amounts promoted by Ant Insurance Agency. According to the prospectus for the Hong Kong IPO, the insurance premiums enabled through Ant Group's platform – as well as contributions by Xianghubao (i.e. an online healthcare mutual aid program launched in October 2018, which aims to provide mutual protection with no upfront payment or admission fees required) participants – reached CNY 52 billion for the 12 months ending June 30, 2020, and the total number of customers served reached 570 million. The biggest advantage of the in-house agency platform is the huge traffic acquired through Ant Group's products. The huge user base accumulated in the early stage of superapp Alipay and Alibaba-based e-commerce have laid a solid foundation for the rapid expansion of Ant Insurance Agency, making it the largest online insurance services platform in China, according to the prospectus. In addition to platform-based insurance, Ant Group also has scenario-based insurance offers that are closely connected with Alibaba, Alipay and other businesses, such as consumer insurance, Alipay's account security insurance, freight insurance and so on.
NYSE:BABALong
by EqualOcean
The Crisis every investor is waiting for. What you gonna do?There are several factors in the market that raise concerns. Each of which could have a huge negative impact on the economy and the stock market. Lets take a look at it to clear our vision. At least that is what I am doing. What factors could that be. Inflation Wage Inflation Money Supply Money circulation Housing bubble China Regulations China Currency Manipulation China Delta Variance of Covid/ The Warren Buffet indicator In this episode I only will throw my thoughts in for a few things The other items will be explained at a later time. I have a lot of other things to do. Trading is 90% research and only of 10% mouse clicking. Inflation . CPI, the consumer price index, and the PPI, the producer price index. Certain stocks do better than other in an inflationary environment. If inflation hits too high consumer spending decreases and hence the demand shrinks and hence the economy starts to stagnate. We can see that the inflation rate is slowing (red), and the y/y rate (blue) is flattening. But we will see next month. This is something to watch out for. Feds might start tapering earlier than next year. Image missing The Producer Price Inde x is at high a level and sitting there. This will only decrease when transportation, sea ports, can keep up with demand and if raw material and commodity costs will decrease. But this can take a while and I expect the PPI staying at this level for a while and hence costs will be past on to the consumer. Hence the Consumer Price Index will follow. Image missing Wage Inflation . We should also take a quick look at the Wages and what they say.We can see that wages increased dramatically since May 2021 There is a shortage of labor. Labor is a commodity as everything else and the price follows supply and demand. But do not kid yourself. A company has to make profit and the labor is part of Cost of Goods sold, COGS. The company MUST increase prices to balance the wages increases. Thus, you wont make anymore money when you have to pay more at the till for what you buy!!! Wages increases mostly never benefit anyone, not the worker and not the company. The company become less competitive and the Worker pays more afterwards. The ONLY method to increase wages is by cutting taxes because taxes are NOT part of COGS and has no negative impact on companies. Just the opposite. With more money in the pocket the consumer starts more spending and that benefits the companies and they will produce more and hire more people. You see? Think about it. Your wage increase is not worth a dime with inflation. And wages increases drive inflation up! Thats why we advocate for smaller government, less regulations and less government spending. Image missing Money Supply , M1, is the amount of Cash circulating the system. It includes the "Free Money" printed by the FEDs given out to people due to Covid. "Stimulus check". The day-to-day money like cash, coins and checking deposits. We can see that since Covid the money made a huge jump and supply still is increasing. There is an enormous amount of cash in the system but does it circulate? Also keep in mind that when people spend money and do not produce the demand increases but the supply decreases. Add to it the sea ports, transportation bottlenecks and the open jobs, and you know why inflation is increasing dramatically. Image missing M1V is the velocity of Money . This is the speed of money in the circulation of the system. The day-to-day money like cash and coins. How many times a Dollar changes hand in a certain time period. A higher circulation rate or money flow indicates a greater economic activity, money is changing hands quicker. A slower rate of velocity indicates a sluggish or declining economy. Interesting to observe is that with Covid the money circulation fell out of the sky. Yes everybody was laid off. But when you take a closer look the change q/q is still negative, which means the circulation of money in the economy is still slowing down even though at a slower rate! This means that with an increase in money supply at hand of people, we will see a decline in spending!! Not good for the economy. Give me the Retail Numbers. Image missing M2 Money Stock includes M1 plus savings deposits, money market securities, mutual funds. This is one way the FEDs trying to keep the cocaine going. They buy MBA (Mortgage Backed Securities) and Bonds from banks in order to create more demand in order to keep bond prices up and the yields down. The 20 year Treasury Bond ETF, TLT from Barclays, i.e. With this the FEDs keep the money in the stock market. The bond prices are going up when the FEDs keep on buying. But with buying Bonds the yield (interests) are going down since you pay more for the fixed interest rate, which means the percentage of return per bond is shrinking because the yield stays the same but the price for the asset rises. It is an inverted relationship to the TBT. Image missing In the M2SL supply we can see that with Covid there was an money injection. After the Covid the money injection accelerated and is increasing fast, more inflation. And we can assume that lot of this money is with the bank. You can walk into any bank and get a personal loan, because money is a liability for the bank, loans generating profits. We can further assume with all the said before that even the banks do not know in what tangible projects to invest. Where is the infrastructure bill going? There is nothing so far. It is all warm air from the Biden administration. Further reading at investopedia dot com Conclusion Inflation is on the rise and will stay. Wages wont go back to before pandemic levels. Costumers also will get use to paying more for some items, like gasoline, energy and transportation, vacation. The Producer inflation for raw material and transportation is also going up and will stay high for a long time. Inflation cannot grow for ever and at such pace. The Feds have to start tapering soon. Then they will firstly reduc3e buying Bonds and MBA, which will drive the yield up. This also will cool the housing bubble a little since the banks are now required to carry the risks they could push to the FEDs by selling them MBAs. Mortgages will be harder to acquire. When the Feds starting to taper, they will reduce the flow of money, which is not yet increasing anyway, as we can see, they will battle inflation. What is your wage increase of 5.5% this year worth when the inflation hits 6%? Nada. You lose money. At the point of tapering the institutions will start moving money out of the stock market due to risks! And they will put it into bond and or Gold. If there is a crises developing that will include China and the Euro Zone they will also start buying US bonds the USD will rise. This conclusion is preliminary. The housing bubble and other indicator will follow. Please be advised, I am not a financial adviser. I am not recommending any trades. I am just a crazy guy with a wild brain. If you want to see the picture to the story, you have to go to hedgingstocks.blogspot dot com
SP:SPXShort
by Option_Crusader
4
DiDi: Charged by Regulators, Stumbles after Launching its IPOThe central government's probes into major tech-oriented transportation companies are obscuring the development of the likes of DiDi. DiDi took only 20 days to be listed in the US market, which appeared odd to investors and regulators. With over 22 rounds of financing, the mobility company has long been under pressure to make profits for its shareholders. DiDi has occupied a large share of the world's mobility market but still struggles to reach profitability because of high operating risks. The Chinese government's investigation inserted high political risk into any plan to invest in the company's stock. On June 30, 2021, DiDi was listed on the New York Stock Exchange with a ticker of DIDI. It offered 317 million ADS with an initial price of USD 14 and raised at least USD 4 billion during its IPO. Oddly, the company took only 20 days to go public and determined the issue price only three days after the roadshow, one of the shortest IPO processes in recent years. The IPO price increased to USD 16.65, up 18.93%, on the IPO day, and the company's market value reached USD 79.8 billion. However, its stock continued to depreciate after that. Founded in 2012, DiDi Global has been constantly strengthening its business in a quest to become the world's largest mobility technology platform. In 2013, owing to massive investments from Alibaba, Tencent and a few other companies, Kuaidi Dache and DiDi formed a duopoly market in the mobility field in China. The two companies merged in 2015, rebranding as DiDi Global. In 2016, the company acquired the Chinese branch of Uber, monopolizing the domain in the country. As of March 2021, DiDi spanned more than 4,000 cities and towns in 15 countries, providing online car-hailing, taxi, free riding, bike-sharing, motorcycle sharing, agency driving, car services, freight, finance and automatic driving services. DiDi currently has 15,914 full-time employees globally, including 7,110 researchers (accounting for 44.7%), indicating the company's emphasis on technology-intensive operations. Qing Liu, the daughter of Chuanzhi Liu, former chairman of Lenovo, joined DiDi in 2014 and was promoted to the president a year later. Previously, Qing Liu served as managing director of Goldman Sachs Asia. According to the company's prospectus, she and Wei Cheng, the founder and CEO, have become two DiDi controllers, holding over 48% voting rights. Since its establishment, DiDi has received 22 rounds of financing, with a total amount of more than USD 20 billion. These funds came from the finest investment institutions such as SoftBank, Sequoia Capital and well-known companies such as Apple, Toyota, Tencent and Alibaba Group. According to its prospectus, prior to the IPO, Softbank (Vision Fund), Uber and Tencent became DiDi's largest shareholders, with about 41% shares. The company has also attracted investment from several state-owned institutions, such as Ping An and Bank of Communications. Possible reasons behind DiDi's accelerated listing We found at least two reasons why DiDi chose to be listed so quickly. First, DiDi has attracted a bunch of investors since the company was founded. But for many years it did not make a profit, remaining a money-burning startup. In other words, the IPO of DiDi was intended to keep the lights on. Second, we believe that the blocked IPO of Ant Group also had a negative impact. Completing the preparation of all the documents and going public within one month may have been to avoid the supervision of the Chinese government. The latter argues that DiDi may have some operation data that does not conform to the laws of either China or the United States. According to some industry insiders, DiDi earlier planned an IPO – in 2015. This is mainly due to the rapid rise of the Chinese stock market in 2015, with the Shanghai Composite Index soaring by 60% and the Shenzhen Component Index soaring by 122% that year. However, the stock market disaster in the following year postponed its listing. In 2021, with the demise of COVID-19, the US economy is expected to become overheated, and Fed rates are expected to rise in 2022, which may have a negative impact on the stock market. 2021 might be the last chance for DiDi to go public in the recent economic cycle. If DiDi is not listed yet this time, the initial investors' payback periods may be further prolonged, with some even choosing to divest. Financials According to the IPO prospectus, DiDi's total revenue in 2020 reached CNY 141.7 billion (USD 20.5 billion), slightly lower than that in 2019. From 2018 to 2020, DiDi's annual net losses were CNY 15 billion, CNY 9.7 billion and CNY 10.6 billion, respectively. Among the revenue segments, China's travel business accounts for more than 94% of DiDi's total revenue in recent years, of which online car-hailing income contributes more than 97%. This indicates a skewed revenue mix. DiDi attracted services to over 493 million annual active users and powered 41 million average daily transactions by the end of Q1 2021. According to the company's estimate, there are 15 million active drivers in the world every year. In the 12 months ending March 31, 2021, DiDi's global average daily trading volume reached 41 million. The total trading volume of the whole platform was CNY 341 billion, ten times ahead of the nearest rival in China. DiDi has formed a monopoly market in the country's ride-hailing sector. And it seems abnormal for an absolute industry leader to have continuous large losses. It is worth noting that DiDi broke even and made a net profit of CNY 5.5 billion in the first quarter of 2021. Nevertheless, about CNY 12.4 billion was a floating investment profit, and the company still suffered an operational loss of CNY 5.5 billion. Before March 31, 2021, the last day of the reporting period, DiDi deconsolidated the community group-buying business, Chengxin (which was only put into operation for one year) from the Group. The split removed the loss of Chengxin from the statements and converted it into a floating profit of 9.1 billion investment revenue, which looks like window dressing. This, we think, also showed an aim of going for a quick listing and a high valuation. High political and operational risks On July 2, 2021, three days after DiDi's IPO, the Chinese government conducted a network security review of the company on suspicion of collecting user information in serious violation of laws and regulations. Shortly, new user registration of the DiDi app was banned, and then 25 apps related to the company were required to be removed from the App Store and Google Store. According to EqualOcean's research, DiDi launched a drive recorder in 2017. This device provides high-precision surveying and mapping data of China's urban and rural areas, and it is mandatory for all contracted drivers to install the recorder – otherwise, they won't be qualified to leverage the firm's platform. On March 31, 2021, the SEC issued the Holding Foreign Companies Accountable Act (HFCAA), which stipulates that the Public Company Accounting Oversight Board (PCAOB) is responsible for supervising the audit institutions of listed foreign companies. For example, the inspection team should have access to all working papers. However, DiDi's papers contain much important information, such as the mentioned high-precision surveying and mapping data. Considering DiDi's monopoly position and huge user base, once the US government obtains these data, China's national security is bound to face a great crisis. The company was investigated because it was suspected of unauthorized transmission of important data secrets to the United States. Although the investigation is not over, DiDi's bizarre listing and the extremely harsh wording of the Chinese government have magnified the political risk enormously. Another risk comes from its revenue model. The single revenue model determines that the company can only rely on increasing the commission rate taken from drivers. As a result, the drivers are often the object of complaints and dissatisfied feedback, which has also led to the intervention of the regulatory authorities many times. According to Xinhua.cn, the de facto commission rate has risen to 25% or even higher, far higher than the 21% promised by DiDi. Meanwhile, the detailed calculation of the commissions is unavailable for drivers. Even if DiDi continues to increase the commission rate, the company still does not achieve consolidated profit growth, indicating problems in the operation of the company and its business model. Bottom line To sum up, considering the political risks and potential operational problems, we do not think DiDi stock is a good short-term investment target. Besides, there is a looming risk of delisting. (Wall Street Journal reported on July 29, 2021 that DiDi is considering going private and compensating investors, but DiDi commented later on that the information was untrue). DiDi is likely to continue to rely heavily on China's mainland market to generate profits. The company will remain in the government agencies' scope for a while. The board and principal shareholders of the company are likely to change. We anticipate that DiDi will pay more attention to the development of foreign markets, expecting the proportion of overseas business income to increase in the short term. We also believe the company will market its international products separately from the domestic ones, as ByteDance is trying to do.
DShort
by EqualOcean