360 Finance, Not Just Because Ant Financial Is Going Public

We are usually reluctant to participate in IPOs and upcoming Ant Financial issue, 33% owned by Alibaba (Nasdaq: BABA), will be no different. The issue did nudge us to take a closer look at the online lending space in China again, including 360 Finance, Inc. (Nasdaq: QFIN), which is one of the three major next-generation online lending platforms in the country. We are impressed with what we saw. Even though investors continue to ignore 360 Finance, the business has transitioned towards more data & technology-centric, away from credit risk management.…

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Qutoutiao Is Making Positive Changes, Stock Will Follow

We recently bought shares of Qutoutiao Inc. (Nasdaq: QTT) and here’s why. The business has started to show results of the positive changes undertaken by the management to strengthen its strategic position in the Chinese content aggregator market and do so profitably soon. For more than a year, the Street has put the stock in the penalty box for its exploding cost structure, concerns over competition from Toutiao (owned by ByteDance of Tiktok fame), and a lack of a clear path to profitability. Even though the company was growing fast,…

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Chinese Stocks May Continue To Run, Here’s Why

Chinese stocks, especially those listed on the U.S. and Hong Kong stock exchanges are performing well over last two-three weeks, even though some of the hot trendy names of April, including those benefiting from ‘stay at home’ trend like Slack Technologies (Nasdaq: WORK) and V-shape comeback plays like airlines, are starting to show signs of tiredness. Most ETFs with Chinese stocks, including Invesco China Technology (NYSE: CQQQ) have come back nicely since the March lows. Indeed, China Technology ETF is up more than 35% over last one year, even though…

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Dada Nexus: Comparison To Wayfair, Instacart And Meituan Justifies Valuation

Last week Dada Nexus (Nasdaq: DADA) went public and the stock hasn’t done much, overshadowed by political climate including the HFCAA bill, but we think the market will soon start to look at the fundamental business and start comparing it with other fast-growing retail models in U.S. and China, most of which are being valued at a significant premium to where Dada Nexus is trading right now. Few things that will come up as concerns from investors are, Lack of profitability, with gross margins around high single-digit during 2019 and…

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For Chinese ADRs, Penalty Of Delisting From US Turning Into A Premium

Stocks of U.S. listed Chinese companies came under pressure over the last few weeks because of U.S. Senate passing Holding Foreign Companies Accountable Act (HFCAA). Market penalized most Chinese ADRs for an elevated level risk related to potential delisting from U.S. stock exchanges. If enacted into law, the bill would require Public Chinese companies to delist from U.S. security exchanges if they do not adhere to U.S. accounting rules or disclose government ownership or control, especially by the Chinese Government or Communist Party. It seems that market fears were misguided.…

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