This is an update to his interview from 8 months ago (Is China Uninvestable?) and it’s a bit long winded (52 Minutes) – a reason I don’t like podcasts. Here are some highlights about specific stocks mentioned (Note: Navis Jockey Fund):
- China had to reopen because local governments were running out of money.
- Biggest China risk: Xi may still prioritize ideology over pragmatism.
- Macrowise, China has decoupled from the US. Low inflation / low rates.
- 10:30 or so mark – Digs into stocks. Many are cash cows now. Alibaba Group’s (NYSE: BABA) can double or triple pretty quickly. 17:40 – aggressive accounting and lack of disclosures.
- JD.com (NASDAQ: JD) sparking a price war in eCommerce by offering subsidies (JD had an advantage with logistics during lockdowns).
- 19:50 – Baidu (NASDAQ: BIDU) AI leader in China but AI requires high-end semiconductors the US has restrictions on. Online advertising was killed by COVID but should recover.
- 25:40 – After school tutoring stocks lost 95%. New Oriental Education (NYSE: EDU) very transparent e.g. said they would loose 50% of their business, etc. Now up 4Xs. A live streaming business with former tutors promoting ag-grocery products in English-Chinese has turned into a strong business.
- 36:00 – Invest in positive cashfow – then investors just need patience.
- 37:30 – He likes small cap Bairong Inc (HKG: 6608 / FRA: 6B5) – provides AI / digital intelligence to banks for credit purposes. 3X EBITDA. Growth business. Has western VCs.
- 47:40 big misperceptions on China: 1) Centrally planned economy. 2) CCP narratives and taking it serious e.g. it’s like political correctness.
Source: https://youtu.be/Y_ABaWb6JSw
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