|Bid||218.600 x 0|
|Ask||218.600 x 0|
|Day's Range||215.000 - 220.200|
|52 Week Range||59.150 - 220.200|
|Beta (5Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Earnings Date||May 25, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
(Bloomberg) -- A new index focused on China’s technology giants is set to give investors greater access to their growing dominance in Hong Kong’s market.The Hang Seng Tech Index, which launched Monday with backdated prices, tracks the 30 largest tech companies listed in the city, including Tencent Holdings Ltd., Alibaba Group Holding Ltd., Meituan Dianping and Xiaomi Corp. Tracking the gauge this year would have returned 44% for investors, versus a loss of 13% for the Hang Seng Index. The tech measure fell 1.3% Monday.“All the conditions are now ready for large China tech stocks whether in China or already listed elsewhere,” Vincent Kwan, chief executive officer of index compiler Hang Seng Indexes Co., said on Bloomberg Television Monday.The move comes at a time when further listings of Chinese technology firms are in the pipeline, such as Jack Ma’s Ant Group, following those of NetEase Inc. and JD.com Inc. Listing closer to home has become more attractive as tensions between Washington and Beijing threaten to curtail Chinese companies’ access to U.S. capital markets.The compiler of the Hang Seng Index has already embraced change through moves such as scrapping a weighting limit for dual-class shares on some of its gauges. The tech index is seen helping investors bridge a gap between a Hong Kong benchmark overstuffed with old economy banks and insurers, and the technology companies that have emerged as big winners in the city’s beaten-down market.“There are too many laggards in the Hang Seng Index,” said Castor Pang, head of research at Core Pacific-Yamaichi International Hong Kong. “With overseas-listed Chinese firms deciding to list closer-to-home, the Hong Kong market falls short in terms of having a representative index for these stocks. This new index serves to fill this gap and drive capital flows.”Citi analysts led by Pierre Lau wrote in a recent note that the index will attract investors to other Hong Kong tech stocks, facilitate the issuance of index-linked funds and derivatives as well as boost turnover at Hong Kong Exchanges & Clearing Ltd. That stock is up 40% this year, most in the Hang Seng Index.Supported by strong mainland inflows through stock connect links, Chinese technology shares have emerged as big winners in Hong Kong this year. Tencent has surged 38% while Meituan is up 82%.The Hang Seng Index, on the other hand, has underperformed. Nearly half of its members have fallen at least 20% this year.Morgan Stanley sees the new technology gauge providing a bigger sentiment boost near-term to the MSCI China Index than the Hang Seng, which has few components that will also be in the tech index. “The direct stock-level positives cannot translate into a meaningful index-level boost,” analysts led by Laura Wang wrote.(Updates Monday’s prices throughout)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
When I was kid growing up during the 1960s, the loud roar of a "muscle car" V8 epitomized "hip." I can still hear, feel and smell the sensation of riding in my cousin's Barracuda as he put pedal-to-the-metal to kick open the four-barrel carburetor that jolted me back into my seat and powered the car down a remote highway.Source: Shutterstock I dreamed of owning a car like that, as did many young kids at that time. Some us fulfilled that dream. I own a 1967 El Camino Super Sport with a 327 V8. The car does two things -- and only two things -- well.It makes a lot of noise and it goes very fast in a straight line. I don't ask it to do anything else.InvestorPlace - Stock Market News, Stock Advice & Trading TipsPeople, especially 20-somethings, often say to me, "Wow! Cool car!" Just like I would say back in the 1960s.But no child of my generation ever dreamed of owning electric vehicles. Those were called golf carts … you could find them puttering around leisure communities.Who knew that a golf cart would one day become a Tesla and epitomize "cool" for an entirely new generation of drivers? And who knew that internal combustion vehicles would fall so far from cool that they would become uncool "world polluters" in the eyes of many upcoming generations?But that's the world as we find it today … and that world is opening up vast opportunities to electrify transportation. Tesla (NASDAQ:TSLA) may be a first-mover in electric vehicles, but it is hardly the only mover.In fact, one Chinese electric vehicle maker has made one of 2020's most impressive comebacks. Late last year, it looked like the stock was down and out. Shares had plunged from $10 to barely more than a buck, and it appears that the company was on the brink of bankruptcy. * 15 Growth Stocks That Are Being Propped Up By Low Rates However, contrary to the naysayers, the company was able to secure crucial investments from both local governments and a powerful private backer. With these funds in hand, the company rode out the novel coronavirus slowdown and is revving its engines again.As I'm about to explain, this company is enjoying sharply higher sales now.And while the stock has recovered significantly, it still looks cheap in light of the company's tremendous momentum. Tencent's Star-Maker Ability With Electric VehiclesJust like movie studios during the "golden era" of Hollywood gained reputations as "star-makers," Tencent (OTCMKTS:TCEHY) possesses a similar skill in the corporate world. Thanks to the company's timely tactical investments, it has made stars out of many businesses -- such as Chinese food-delivery service Meituan Dianping (OTCMKTS:MPNGY). Less than two years ago, Tencent spent about $10 billion to buy 20% of that company. And today, that stake is worth more than $24 billion.In this context, Tencent's massive ongoing investment in electric car company Nio (NYSE:NIO) deserves our attention. In June, Tencent snapped up 1.68 million additional Nio shares for $10 million. That investment was a relative pittance, compared to Tencent's previous investments.Overall, Tencent had invested $510 million in Nio before its 2018 initial public offering. Subsequent to that investment, Tencent made a number of additional purchases, and it now owns 15.1% of the company. This makes Tencent the largest individual owner of Nio in dollar terms, and the second-largest holder in terms of voting rights. It trails only Nio founder and CEO William Li in that regard.So far, however, Tencent doesn't have much to show for those investments. In fact, Nio's shares had been on a major losing streak since the IPO and have only recently started to recover. But if past is prologue, something good is about to happen at Nio. And we're seeing signs of it already.For one thing, Nio's production rate of new electric vehicles is growing, and its losses are shrinking. The company recently revealed that it delivered 3,436 vehicles in May 2020, representing an outstanding 215.5% growth rate year-over-year. This should refute the idea that Nio bears had been peddling that the coronavirus had largely eliminated demand for the company's products.Also, Nio is a luxury brand within China, and it will take a while for it to sell large numbers of cars consistently. Still, 215% growth is an excellent stepping-stone. Think about it this way: Even if there's no further growth, at the current 3,500 cars-per-month rate, Nio would delivery more than 40,000 cars over the next 12 months.For perspective, that 40,000 cars annually rate of production is roughly one-tenth of Tesla's output. And yet, Tesla's valuation is currently almost 20 times higher than Nio's. So if you value Nio and Tesla at the same level per car that they deliver, Nio's share price would nearly double to almost $15 per share. Bottom Line: Nio Is a Bargain Compared to TeslaI make that comparison just for kicks, as there are clearly many other factors that influence Tesla's and Nio's valuations in addition to their production levels. Still, it should give you a sense of Nio's upside if things go well. The company has been battling skeptics and a funding shortage for so long that investors lost sight of the electric vehicle maker's blue-sky potential.As we've talked about countless times here in Smart Money, technology is essential for modern life, which is why tech stocks are outperforming the rest of the market. While very few investors understand it, this gap between tech and the rest of the market -- this "Technocasm," as I call it -- isn't a new phenomenon.It existed back when I dreamed of my loud, muscle car V8 … and it exists today as the younger generation dreams about the endless possibilities with electric and, ultimately, self-driving vehicles.And the rate at which the Technocasm is widening isn't slowing down. In fact, it's accelerating.To learn how to make sure you and your wealth are on the right of this Technocasm, click here now.Sincerely,Eric FryP.S. For two decades, CEOs and Wall Street billionaires paid me millions for trade research and ideas. Over 20 years, the peak highs from my top recommendations averaged out to 93% a year. But I've left all of that behind - and invited a small group to follow my work. For that small group, in just 10 months, I uncovered total gains of 987% (including the losers!). Today, I'm inviting a few more people join me. Go here to find out more.Eric Fry is an award-winning stock picker with numerous "10-bagger" calls -- in good markets AND bad. How? By finding potent global megatrends… before they take off. And when it comes to bear markets, you'll want to have his "blueprint" in hand before stocks go south. Eric does not own the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post From Detroit Muscle to Todayas EVs … Auto Innovation Fuels Investorsa Profits appeared first on InvestorPlace.
(Bloomberg Opinion) -- It’s not hard to see why investors in Asia have been blindly chasing growth stocks. For the past 10 years, value has consistently underperformed. As the world goes through another round of stimulus, money will continue to flow to companies that promise the fastest expansion. This self-perpetuating trend is forcing a change in how some investors assess value.There are many reasons why value stocks have lagged behind. Much of the phenomenon reflects the ultra-low interest rates that have prevailed since the global financial crisis. Lower rates make investing in growth stocks more attractive. At the same time, they hurt financial companies by compressing their net interest margins — the difference between the rates at which they can borrow and lend. This has depressed returns in a sector that’s come to make up a substantial chunk of the value universe, defined by stocks with low multiples of price to earnings, book value or other measures.While value has underperformed around the world, the drag from financial stocks has been even greater in Asia. The sector accounts for 28% of the MSCI AC Asia ex Japan Value Price Index, compared with 22% for MSCI’s World Value Index and 18% for its U.S. value gauge. Information technology has the highest weighting in the MSCI USA Index at 28%, with financials accounting for less than 10%.Over the past decade, the Asian value index has risen 5.3%, compared with a 97% advance for the equivalent gauge of the region’s growth companies. During the March rout triggered by the coronavirus outbreak, the growth index fell less and then rebounded more than the value measure.This can’t be dismissed as irrational behavior by investors. After all, the low-interest-rate environment has materially harmed the earnings and prospects for financial companies. At the same time, the growth posted by leading Chinese technology companies such as Tencent Holdings Ltd. and Meituan Dianping is real. The pandemic has only accelerated the trend toward online working and commerce, as shown by the rally in Zoom Video Communications Inc., whose shares have jumped almost fourfold on the Nasdaq this year.Stock of Tencent, the Shenzhen-based internet giant, has climbed 37% in 2020 and Beijing-headquartered Meituan, the world’s biggest meal delivery business, has surged 82%. By contrast, Industrial and Commercial Bank of China Ltd., the country’s largest lender, has sunk 19%.A third reason for the persistent underperformance of value stocks is low trading volume. In Hong Kong, for example, there are roughly 2,500 listed stocks. The top 100 by market capitalization account for 70% to 75% of daily trading volume, with the next 200 taking 20% to 25%. That leaves the remaining 2,200 issuers competing for the scraps. On a typical trading day with $13 billion in turnover, that amounts to about $650 million for these companies — or about $300,000 apiece. Thin pickings indeed.Liquidity is a big issue for institutional investors, who need to find companies where they can accumulate a stake without driving the price to an unreasonable level. The rise of exchange-traded funds and index-tracking strategies that require liquidity has helped to gradually crowd out value stocks. Many such companies are family-controlled, leaving few shares available for trading by outsiders. Value-oriented managers are reluctant to sell because the stocks are too cheap. This creates a vicious cycle where old money won’t leave and new money can’t enter. Over time, many of these stocks have been kicked off indexes because of anemic trading, further depriving them of liquidity.This is the flip side of the growth paradigm, where the big simply keep getting bigger. Just as in the U.S. — where the top tech names such as Amazon.com Inc., Facebook Inc. and Apple Inc. have vastly outperformed benchmark indexes — growth behemoths in Asia have left their rivals in the shade. Tencent’s gain this year compares with an 11% decline in Hong Kong’s Hang Seng Index. Masayoshi Son’s SoftBank Group Corp. has risen 35% in Tokyo, versus an 8% decline in Japan’s Topix index.It’s getting harder and harder for value-oriented fund managers to ignore these stocks. In fact, value can be found in fast-growing companies on occasions — though such opportunities tend to be short-lived.Value investing in Asia has been getting a bad rap, and that trend isn’t going to change in the near future. The traditional way of hunting for bargains has stopped working in a world that’s been turned upside down by the pandemic and more than a decade of easy money. To earn superior returns, investors will need to evolve with the changing environment. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Ronald W. Chan is the founder and CIO of Chartwell Capital in Hong Kong. He is the author of “The Value Investors” and “Behind the Berkshire Hathaway Curtain.”For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.