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ridethepig | Chinese Equities ... The Slaughtered PigThe "hanging" candle The problem is as follows: If the only way to reach risk-on in and remove social distancing is either via a vaccine (most preferred option although not really in scope till 2021) or further extreme lockdown measures (as you all know extremely costly and damaging to the monetary side) to completely remove the virus from circulation. With all roads towards confidence blockaded, it's more advisable to take a contrarian stance to the equity promoters. This is not an easy one to add too. It depends on the circumstances next week, namely on the virus front as Europe looks set to follow the US and lose control. This is something I would like you all to anticipate: it is all too easy as for the Robinhood pawns who tend to be weak when tested. The flows are as follows: 1️⃣ the flows themselves in US equities are open to attack 2️⃣ the final nail in the coffin comes from long bonds which are too much pressure to maintain: this means that the necessary complacency forces retail to buy all the junk while those smart enough unload and exert Puts / shorts. Here the notion of parking capital in China in the short-term turns out to be deceptive and soft. Once more the reason can be found in the previous SHCOMP swings: in diagrams attached below you will see excellent examples of PBOC blockaders and failures. Ride the PBOC, Feb 3rd 2020 The attempt to ride the CB flows, the hanging lows were relatively obvious and panic creates weakness which can be bought with confidence like passing clouds. SHCOMP Market Commentary, Feb 24th 2020 The pullback was a result of the PBOC and sharp hands. Many moons ago I would've been convinced by this market...not today. This leads to the long run choppy conditions and unfavourable outcome of soft hands who placed their stops too blatently. The sell side is still there on the move, ride weakness is the strategy and balance out at key support levels. Thanks for keeping the feedback coming 👍 or 👎
SShort
by ridethepig
13
Shanghai: Still some upside before profit taking kicks in.SHCOMP has formed a Golden Cross on the 1D chart turning vastly overbought (RSI = 89.841, MACD = 105.710, ADX = 52.201). Last time that took place within the long-term Channel Up that started in January 2019, the market consolidated for a few days and delivered a last peak in a month. The MACD has entered into this red Resistance Zone of the 2019 consolidation, so there are high probabilities that investors won't close massively positions and let profits run a little higher towards the 3,580 2 year Resistance (January 2018 Top). ** If you like our free content follow our profile to get more daily ideas. ** Comments and likes are greatly appreciated.
S
by InvestingScope
1
ALIBABA GROUP HOLDINGS LTD Analysis .I think NYSE:BABA needs to provide much more confirmation before one considers buying this stock . I can think of these scenarios : First scenario :Price doesn't go any lower than 192.9 after the opening and price goes up to test the blue resistance line and then closes considerably above the blue line /200 area , in this case I think it's a confirmation to buy and set a target at around 208.5 .We could even break above the green line and that would be an even stronger buy signal with a first target at around 216 and a good potential to hit the 230 (second target) Another scenario : Price drops considerably below the 192.9 which would make the blue line almost useless , and continues droping to around the black line at around 186.5 , that would be a level with high probability of a bounce up and winning a buy entry with a target set at around 193. In case price closes considerably below the blackline , it would be a rather sell signal with a target set at around 178 .
NYSE:BABA
by StockAnalystPro
Value Investment - BIDU - Improved Profitability After The VirusAll comments and likes are very appreciated. _________________________________________________________________________________________________________________ Fair Value and Profit Drivers | Our fair value estimate is $190 per share, with a 2020 P/E of 31 times and 2021 P/E of 25 times. We expect a 5% CAGR in online marketing revenue in the next five years, driven by recovery in the longer term. This is because weak macroeconomics (resulting in weaker demand and pricing for ads), substantial increase in ad inventory by Bytedance and Tencent, and moving customers’ landing pages to Baidu’s platform play an important role in the current weakness. We do not expect these headwinds to persist in the longer term, except Baidu’s competitor still have room to increase ad load. As the moving of landing pages is completed, the economy recovers, iQiyi’s in-feed revenue improves after cleaning up unhealthy ads, and video content can be approved more quickly after the 70th national day on Oct. 1, 2019, we expect Baidu and iQiyi’s advertising revenue to recover from a low base. We expect other revenue to grow at a 17% CAGR in the next five years, driven by strong growth at iQiyi. 49% of the others revenue was iQiyi’s membership revenue in 2019, which will see growth from increasing subscriber number and high-quality original and licensed content at iQiyi. Baidu will spend more marketing dollars up front for app installation and cultivating app usage, but revenue generated from the users will occur during the lifetime of the users. Hence, we expect to see revenue grow faster after initial investments. Should the return on investment be poor, Baidu will have no choice but to cut back on sales and marketing expenses, which will boost margin. DuerOS and cloud are also other areas of investments. We assume operating margin will rise back to 20.2% in 2024, compared with 5.9% in 2019. Excluding iQiyi, Baidu’s core operating margin is assumed to rise to 20.2% in 2024 from 19.1% in 2019. We think our assumptions of only a small-margin recovery for Baidu’s core operation have sufficiently incorporated the ever-increasing competitive environment in the Internet sector. This is particularly true in searching for general information, because it is still a necessity, and wide-moat Baidu has a dominant market share of over 70% in search. We are confident that Baidu resume growth for search. Our five-year net revenue and operating profit growth are 9% and 40% respectively. Wide-moat Baidu’s fourth-quarter 2019 results were largely within our expectations, and after fine-tuning our model, we are cutting our fair value estimate to $190 from $199. However, we think the shares are undervalued, as Baidu is on track for improved profitability after the coronavirus outbreak. Fourth-quarter 2019 year-over-year revenue growth was 6%, at the high end of the latest guidance range of 4% to 6% and its previous guidance of negative 1% to 6%. Meanwhile, Baidu core revenue in the quarter grew 6% year over year, excluding spin-offs, at the high end of the latest guidance of between 4% and 6% and the previous guidance of between 0% and 6%. Baidu’s net income was CNY 6.3 billion in the quarter compared with guidance of CNY 6.2 billion to CNY 6.7 billion. Net income of Baidu core rose 84% year over year, at the low end of the guidance of 83% to 90%. Management said it expects 2020 first-quarter revenue to decrease 5% to 13% year over year for Baidu and to drop 10% to 18% for Baidu core compared with advertising peer Weibo’s 15% to 20% drop. We assume an 18% year-over-year decline in the first quarter; a 3% decline in the second quarter; followed by a 9% increase in the second half of 2020; and no growth in the full year of 2020 for Baidu core revenue. Our non-GAAP operating expense plus cost of revenue for 2020 is 7% higher than the annualized level that is based on the more rational level in the fourth quarter of 2019. Our five-year revenue and operating profit CAGR are 9% and 40% (low base in 2019 due to record low margin of 6%), respectively, versus 9% and 11% previously. Risk and Uncertainty | We think Baidu faces high levels of risk, given intense competition along with questions as to whether its AI-related investment will generate satisfactory returns. Though Baidu is the largest search engine in China, it is competing with the other two Internet giants, Tencent and Alibaba, and Google’s potential return to Chinese search market is also a threat. Regarding the search engine business, Tencent invested in Sogou, and Alibaba acquired UC Web, which owns a mobile search engine, Shenma. Competition has extended to each key area of mobile Internet usage, such as navigation, O2O services, online video services and so on. Baidu’s margins have been significantly dragged down by aggressive spending in video content and O2O marketing but recovered to 18.5% in 2017 from 14.2% in 2016 as Baidu divested margin-dilutive businesses. The major Internet companies in China have been investing in AI-related business, such as cloud computing, voice and image recognition, and autonomously driven cars. At the current stage, it is difficult to predict whether Baidu will be the final winner in AI and whether the returns will reward its investment. In addition, regulatory risk is a concern. Following the Wei Zexi incident in early 2016, Chinese authorities launched new regulations for online search and advertising, which clearly defined paid search results as advertising. These regulations took effect Sept. 1, 2016. Given stricter standards for online advertisers, Baidu’s online marketing services revenue growth declined to 1% in 2016. If the local authorities release more policies regarding Internet business, such as online advertising and online finance, Baidu’s revenue could be negatively affected. Since 2017, Baidu has discontinued the disclosure of MAUs for its mobile search and mobile maps, which is possibly due to weaker numbers. I and/or others I advise hold a material investment in the issuer's securities. _________________________________________________________________________________________________________________ All comments and likes are very appreciated. Best Regards, I0_USD_of_Warren_Buffet
NASDAQ:BIDULong
by I0_USD_of_Warren_Buffett
4
NIO Breakout coming SOONTarget 1 : 5$ (Aligns with 100 Daily MA) Target 2: 8$ NIO Breakout coming soon due to the further accumulation of good news! The downward channel will be broken, and the confirmation is the break above 2.40 which also happens to previous support level. The 1st target is 5$ which happens to be the 100 Daily moving average price point. The 2nd target is 8$ which happens to be a previous resistance level. The rally will come quickly... the market almost always performs well come holiday times.
NYSE:NIOLong
by hustler101