China Internet Update (KraneShares)

In the latest KraneShares China Market Update email, the China focused ETF manager said now is an attractive time to take a position in their KraneShares CSI China Internet ETF (NASDAQ: KWEB) as Chinese internet companies like Alibaba Group Holding Ltd (NYSE: BABA) and Baidu Inc (NASDAQ: BIDU) continued to deliver impressive year over year (YoY) earnings results in Q4 2014. Specifically, KraneShares noted: Alibaba Q4 results highlights: Data from Alibaba as of 01/29/2015

  • Gross Merchandise Value (GMV) increased 49% YoY to $127 billion
  • Active Users increased 45% YoY to 334 million
  • Quarterly Revenue increased 40% YoY to $4.2 billion
  • Mobile GMV increased 213% YoY to $53 billion while mobile revenue increased 448% YoY to $1 billion
  • Free Cash Flow increased to $3.66 billion

Baidu Q4 results highlights: Data from Baidu as of 02/11/2015

  • Total revenues for the quarter increased 47.5% to $2.26 billion YoY
  • Operating profit for the quarter increased 7.8% to $475 million YoY
  • 2014 annual revenues increased 53.6% to $7.9 billion from 2013
  • As of December 31, 2014 the company had cash, cash equivalents and short term investments worth $9.295 billion

Alibaba and Baidu’s main growth contributors were year over year increases in both revenue and active users while the main inhibitors for both stocks were mobile monetization rates lagging their non-mobile rates. In addition, Tencent Holdings Ltd (OTCMKTS: TCTZF), the fifth-largest Internet company services in the world who’s services include social network, web portals, e-commerce and multiplayer online games, is scheduled to report earnings on Wednesday, March 18th. To learn more about the KraneShares CSI China Internet ETF, go to the website of KraneShares.

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