Alibaba Group Holding and other Chinese e-commerce firms holding Singles Day shopping events together logged a 4.7% decline in sales for the first half of the final day, a research firm said.
As Alibaba Group wraps up the world's biggest online shopping festival on Friday, the operative word seems to be flat - potentially flat sales and flat in tone with the Chinese e-commerce giant not even holding its usual gala show.
The following are today's upgrades for Validea's Price/Sales Investor model based on the published strategy of Kenneth Fisher. This value strategy rewards stocks with low P/S ratios, long-term profit growth, strong free cash flow and consistent profit margins.MAMMOTH ENERGY SERVI
The following are today's upgrades for Validea's Price/Sales Investor model based on the published strategy of Kenneth Fisher. This value strategy rewards stocks with low P/S ratios, long-term profit growth, strong free cash flow and consistent profit margins.MAMMOTH ENERGY SERVI
With more countries across Asia reopening, China is expected to reopen as well for international business and travel at some point in the near future. Although the country has not committed to reopening it is thought to be months away from doing so.
With more countries across Asia reopening, China is expected to reopen as well for international business and travel at some point in the near future. Although the country has not committed to reopening it is thought to be months away from doing so.
It has been difficult for Alibaba's (NYSE: BABA) investors over the last two years. The stock has lost more than 75% of its all-time-high market capitalization amid a series of challenges, including weaker financial performance and the threat of delisting. But for those still hol
It has been difficult for Alibaba's (NYSE: BABA) investors over the last two years. The stock has lost more than 75% of its all-time-high market capitalization amid a series of challenges, including weaker financial performance and the threat of delisting. But for those still hol
Alibaba (BABA) closed at $69.71 in the latest trading session, marking a -0.14% move from the prior day. This move lagged the S&P 500's daily gain of 0.96%. Elsewhere, the Dow gained 1.31%, while the tech-heavy Nasdaq lost 0.14%.
Alibaba (BABA) closed at $69.71 in the latest trading session, marking a -0.14% move from the prior day. This move lagged the S&P 500's daily gain of 0.96%. Elsewhere, the Dow gained 1.31%, while the tech-heavy Nasdaq lost 0.14%.
Synchronoss Technologies SNCR is set to release its third-quarter 2022 results on Nov 8.The Zacks Consensus Estimate for the top line is currently pegged at $62.40 million, indicating a 10.54% decline from the year-ago quarter’s reported figure.The consensus mark for earn
Synchronoss Technologies SNCR is set to release its third-quarter 2022 results on Nov 8.The Zacks Consensus Estimate for the top line is currently pegged at $62.40 million, indicating a 10.54% decline from the year-ago quarter’s reported figure.The consensus mark for earn
Wall Street sharply lower on Friday after a choppy season. Throughout the day, market participants remained concerned regarding more interest rate hike by the Fed and mixed jobs data for October. Stocks posted a strong rally in the final hour of trading following news tha
U.S. stock indexes were set to open higher on Monday following a rollercoaster week, with investor focus shifting to Tuesday's midterm elections that will determine control of Congress.
The NASDAQ 100 Pre-Market Indicator is up 18.35 to 10,875.38. The total Pre-Market volume is currently 33,548,642 shares traded.The following are the most active stocks for the pre-market session: ProShares UltraPro QQQ (TQQQ) is +0.09 at $18.04, with 8,027,252 shares traded. Th
The NASDAQ 100 Pre-Market Indicator is up 18.35 to 10,875.38. The total Pre-Market volume is currently 33,548,642 shares traded.The following are the most active stocks for the pre-market session: ProShares UltraPro QQQ (TQQQ) is +0.09 at $18.04, with 8,027,252 shares traded. Th
U.S. stock index futures rose on Monday even as Beijing reaffirmed over the weekend that it would stick to its strict COVID-19 curbs, while investor focus shifted to Tuesday's U.S. midterm elections that will determine control of Congress.
U.S. stock index futures inched higher on Monday even as Beijing reaffirmed over the weekend that it would stick to its zero COVID-19 policy, while investor focus shifted to Tuesday's U.S. midterm elections that will determine control of Congress.
SoftBank Group Corp is expected to face further weakness in tech stocks when it reports second-quarter earnings on Friday, after two brutal quarters that have shaken Masayoshi Son's tech conglomerate.
Chinese stocks have been falling practically all year. The list of unknowns has grown to levels to make even the most value-conscious growth investor throw in the towel on the Chinese market as a whole.
Though Chinese tech stocks seem rich in value, the perceived risks of investing in the Chinese market have grown considerably with time. Delisting fears alone may be too great for any cautious investor to get in on such popular internet behemoths like Alibaba (
NYSE: BABA
), Tencent Holdings (
OTC: TCEHY
), or Baidu (
NASDAQ: BIDU
).
Smaller, higher-growth tech stocks (think Pinduoduo (
NASDAQ: PDD
)) seem even harder to get behind, given their amplified volatility and greater risk in the face of a global economic downturn. Also, let's not forget about the risk of accounting irregularities.
The Difficult-to-Fathom Risks of Investing in Chinese Stocks
Though the list of worries seems to grow, rather than shrink, by the day, uneasy investors may be better off forgoing the high-growth market altogether. For those ready and willing to embrace the added regulatory risks of owning Chinese stocks, I think there's much value to be had.
At the end of the day, China is one of the fastest-growing markets out there, and the dominance of its top tech companies could rival that of the American big tech companies we all know and love. Indeed, being at the mercy of the Chinese government is never a great feeling. Regulatory risks are difficult to factor into a Chinese stock's valuation.
Regardless, I think a lot of such regulatory risk is baked into shares. Any unforeseen easing of regulations could induce massive upside across the board. Of course, speculating on when such exogenous events will occur is a fool's game. If you've got the time horizon (at least 10 years) and are comfortable (preferably with some experience) in catching fast-falling knives, actively avoiding Chinese stocks could leave a lot of long-term growth on the table.
How to Reduce Risk When Buying Chinese Internet Stocks
The Chinese internet stocks, I believe, are worth dollar-cost averaging (DCA) into as they crumble. Their growth profiles could have the potential to be unmatched, especially once the Chinese economy recovers and firms like Alibaba look to international markets to add to their growth.
Now, the Chinese market already has a world of growth opportunities for a firm like Alibaba, as it pursues new market verticals. Like American big tech companies, top Chinese internet giants are expanding their businesses to encompass new markets. Payments, video games, e-commerce, hardware, and all the sort, the Chinese stocks do, in many ways, have growth profiles that resemble the big tech companies on steroids.
The only piece of hair on their long-term stories lies in regulatory risks. Chinese companies must comply with regulations, or the penalties for skating offside could be enormous. Last year, Alibaba was made an example as
it took a $2.8 billion fine to the chin for anti-competitive behavior. Alibaba has committed to change, and other Chinese tech firms are likely to follow.
There's no way to truly eliminate regulatory risks. For investors, the best way to go, I think, is with China's top tech giants. Alibaba and Tencent are two top dogs that are down around
78% and
68% from their all-time highs.
Fundamentals suggest both firms are deeply undervalued. That said, regulatory risk warrants a lofty discount on shares versus the fundamentals. It's hard to tell how much regulatory discount shares should command.
At this juncture, it seems like such risks are at a high point, with Chinese stocks down around the same as a
Cathie Wood innovation stock. With valuations in the gutter, Chinese stocks may be worth a contrarian bet for those who understand the magnitude of the risks they'll bear.
The Bottom Line on Chinese Stocks
Though there are so many intriguing options in the Chinese market, I think dollar-cost averaging into mega-cap or market-weighted ETFs like the KraneShares CSI China Internet ETF (
KWEB
) are the best way to go for those willing to stomach amplified pain going into a recession year.
The risks with Chinese stocks are high and hard to fathom. However, so too are the potential rewards.
An ETF option would be best for investors looking for a smoother transition should major U.S. exchange delistings cause a conversion of U.S.-traded shares to Hong Kong shares.
Disclosure