600519 trade ideas
Buy businesses that sticks for lifeIf you examine the type of stocks to buy from the perspective of marketing, then it becomes much more interesting.
This Covid-19 has been a game changer for many industries but the few that sticks to consumers, good times or bad times, recession or not, they were always be there.
The vices industry like alcohol, tobacco are going to be there no matter how much lobby there going to be or more reports on how it can cause cancer.
Also, there is gaming, one of the shiny stars now that are leading many stock markets to a new high. We have heard of people who died while playing games. (see articles here ,
here and here ). If you are a gamer, please hydrate, look at some green plants every 30 mins or so and remember to stretch. I made my kids do that now.
The more it sticks with the group (ie. smokers, drinkers or gamers), the more depth and breadth the market will be (ie. more people smoke, drink and play games and smoke, drink and play more frequent which helps to increase the revenue).
With the entertainment places like bars, night clubs closed for now, where do the party-goers drink ? They have to drink at home and perhaps buy more different varieties from duty free shops or order online to try. Or smokers who get more bored cooping up at home and problems might be exacerbated if he/she is stressed out from being retrenched, unemployed or having a wage cut.
Gaming is more pervasive than the other two - you can play on your mobile phone anywhere while you are on the move or while queuing to make payment, etc. Smoking has more restrictions and government also ban alcohol buying for certain age limit and after certain hours. to curb excessive drinking.
Without going too far, I take a simplistic view of the chart comparing 3 companies, one in each of these sectors - drinks (Kweichou Moutai), tobacco (Phillip Morris) and gaming (Tencent). Assuming you bought one or three of them from 2 Jan 2019 and hold till now, the ROI would be
210% , 85% and 332% respectively.
What other sticky business can you think of ? Please share in the comments below.
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Trade safely and take care !
Respect Culture and be rewardedFor years, many western countries had tried to push their own products , wine, cider, beer, whisky to China but they have not succeeded with much fanfare.
Why ? They failed to understand the local culture of China, what is the food and beverage consumption behavioural patterns like in China ?
As an enthic Chinese from Singapore, I cannot claim to know a lot as each province of China has its unique and distinctive food. I remembered more than a decade ago, when I went to my girlfriend house (my wife now), her parents bought puffer fish to welcome us. I was told, it was poisonous and had to be cut by a skilled chef.
And it was very expensive , was told they ordered in advance to get hold of this fish and is only served for special guest. Lucky me.
So, in China. bai jiu or white spirits as it commonly called is the de facto alcohol drink in China. It is also given away as expensive gifts to families, friends, officials to cement closer relationships.
One can see it took more than 10 years for the price to break out of the 250 price mark and thereafter, it has not look back. If you bought in 2015 and hold it to now, you would have made more than 400% returns on it.
Just an ordinary alcohol nothing high tech, in fact very traditional, very old fashioned. But it is highly respected and well regarded in China.
I believe the price will continue to go higher (awaiting for pullback) now that the cities have reopened and the native Chinese will be rejoicing and celebrating together. What better way than to have a bottle of Bai Jiu with them ?
Yum Seng (cheers in Chinese)
FYI, it is the heaviest weight in the China A50 index , taking up 6% of the components. You can also consider investing in this index to have a more diversified portfolio which include this great company.
I'm super bullish on the kweichow moutai Stock !! it could fly !if it could breakout the 1288.72 resistant it definitely will fly to the 1588.42 (1000% first target : plan A ) ,,, further more + if the breakout will be with a huge volume then it will probably reach the 1773.43 second target : plan B : (50-65%) ,, it's up to the break out volume and the upcoming the upcoming correction afer reaching out the 1588.42 first target ^_^ ! ---> definitely to keep in PortfoliO !!!