Overnight, the US stock market fell, and the Nasdaq China Golden Dragon Index ended its five consecutive gains. Vipshop rose 12.63% against the trend. Hong Kong technology stocks generally fell, with Baidu Group - SW falling more than 7% in intraday trading after releasing its financial report. Technology giants such as Alibaba and JD.com also experienced varying degrees of decline.
In terms of popular ETFs, the China Concept Internet ETF (513220) fluctuated narrowly, with a real-time decline of 0.25% as of 2:00 pm on February 29, 2024. According to Wind data, from early February to the latest closing day, the daily average transaction volume of China Concept Internet ETF (513220) has been nearly 250 million yuan, a significant increase in trading activity compared to the previous month, and the market has received high attention.
[Latest news on constituent stocks]
Baidu announced its performance for the fourth quarter of 2023, with a total revenue of 35 billion yuan, a year-on-year increase of 6%, and a net profit attributable to Baidu of 2.6 billion yuan; Throughout 2023, the total revenue was 134.6 billion yuan, a year-on-year increase of 9%, and the net profit attributable to Baidu was 20.3 billion yuan. In the fourth quarter of 2023, $318 million of stocks were repurchased, and the cumulative repurchase amount under the $5 billion repurchase plan announced in 2023 reached $669 million.
The latest report from China International Capital Corporation (CICC) points out that Baidu's cloud revenue increased by 11% to 5.7 billion yuan in the fourth quarter of 2023, and it still maintains stable profitability despite the introduction of certain subsidies. Considering macro disturbances, it is expected that Baidu's cloud revenue will increase by 10% year-on-year in the first quarter of 2024; In the long run, it is expected that API calls, as well as the combination of MaaS products and cloud, will open up revenue growth opportunities.
According to Vipshop's financial report, it achieved a net revenue of 112.9 billion yuan in 2023, a year-on-year increase of 9.4%; Non GAAP's net profit was 9.5 billion yuan, a year-on-year increase of 39.1%. The annual GMV was 208 billion yuan, a year-on-year increase of 18.7%; The number of active users was 87.4 million, a year-on-year increase of 3.9%; The number of orders was 812.3 million, a year-on-year increase of 9.8%.
Meanwhile, the company's board of directors has approved the annual cash dividend policy. According to the dividend policy, the board of directors of the company will distribute annual dividends to shareholders registered after the market close on March 15, 2024, for the first time in the 2023 fiscal year, in the amount of $2.15 per ordinary share or $0.43 per American depositary share, with a total dividend amount of approximately $250 million.
Alibaba Cloud has lowered the official website prices of its cloud products across the board, with an average price reduction of over 20% and a maximum reduction of 55%. This is the largest price reduction in Alibaba Cloud's history, involving over 100 products and over 500 product specifications. After the price reduction, the prices of Alibaba Cloud's core products have broken through the lowest prices on the entire network. After the news was released, the stock price of Alibaba SW plummeted by over 2% at one point.
Multiple institutions are intensively increasing their holdings of Chinese concept stocks
Recently, HHLRadvisors, a subsidiary of Hillhouse, announced its latest holdings in US stocks. In the fourth quarter of 2023, Hillhouse increased its holdings in Chinese concept stocks such as Pinduoduo and JD.com. Among them, Hillhouse significantly increased its holdings in Pinduoduo by 2.76 million shares, increasing its holdings to 10.11 million shares, with an increase of up to $400 million. At the end of the period, its market value reached $1.479 billion, surpassing the top holding company in multiple quarters, Baekje Shenzhou, and becoming Hillhouse's largest heavy holdings.
According to the 13F report, ScionAsset Management LLC, a hedge fund founded by Michael Burry, the prototype of the movie "Big Short," further increased its holdings in Alibaba and JD.com in the fourth quarter of last year, increasing its holdings by 25000 to 75000 shares, with a market value of $5.81 million, and 75000 to 200000 shares, with a market value of $5.78 million. As of the end of the fourth quarter, Alibaba had the largest disclosed position, accounting for 6.1% of its assets, followed by JD.com.
CPPIB, the largest pension fund in Canada, newly bought Alibaba in the fourth quarter of last year, holding 3.6 million shares with a market value of 279 million US dollars. In addition, this pension fund has also newly acquired companies such as Ideal Automobile, JD.com, and NetEase.
The hedge fund Appaloosa, known as the "bottom chaser", increased its holdings in Alibaba by 20%, adding 4.35 million shares of Alibaba shares in the quarter ending December 2023.
[Institution: 2024 may be the year of gradual recovery of the Hong Kong stock market]
From a valuation perspective, the overall valuation of Chinese concept stocks has fallen to the historical bottom area. According to Wind data, as of February 27, 2024, the latest valuation of the Global China Internet Index (930796. CSI) is 9.87 times PE, which is 6.67% of the historical quantile. That is to say, the current index is more cost-effective than over 93% of its historical time.
Data source: Wind, statistical interval from April 22, 2016 to April 27, 2022.
CITIC Securities pointed out that the Hong Kong stock market may gradually recover in 2024. Investor sentiment has rebounded, fundamentals are supported, and the market bottom may have been consolidated. In addition, the resonance of the inventory cycle between China and the United States may drive the sustained recovery of Hong Kong stock fundamentals.
Deppon Securities believes that there is a good opportunity for the overall allocation of the Internet industry, based on the following three reasons: 1) It is expected that the fundamentals will be gradually repaired this year; 2) The growth expectations for the ARVR and AIGC tracks are very clear, and the current is the right time to lay out; 3) Policies support the development of digital economy, cultural industry, and platform economy.
[Focusing on China's Internet leader - China Internet ETF (SH513220)]
The CSI Global China Internet Index (930796. CSI), referred to as the Global China Internet, selects 30 Internet company securities with large market capitalization from the securities of Chinese mainland companies listed globally as the index sample. The current constituent stocks include Chinese Internet companies listed in A-share, Hong Kong stock and US stock. According to the data on the official website of CSI companies, as of February 22, 2024, Hong Kong stock, US stock and A-share accounted for 72.21%, 20.71% 7.08%, covering a wide range, positioned as a leader.
According to the latest data on the official website of the China Securities Index, as of February 22, 2024, the top five heavyweight stocks in the global China Internet Index accounted for more than 61%, respectively Alibaba SW (16.48%), Pinduoduo (14.38%), Tencent Holdings (14.34%), Meituan-W (9.61%), NetEase S (6.46%), giving Internet giants more weight; At the same time, it covers Baidu, Xiaomi, Jingdong, Ctrip and other sub sectors of Internet leaders, striving to fully share the overall development dividend of China's Internet leading companies.
Risk warning: Funds carry risks and investment should be cautious. The above viewpoints, views, and ideas are based on the current situation and may change in the future. For the opinions or information cited from external institutions such as securities companies, no substantial guarantee or commitment is made regarding the authenticity, completeness, and accuracy of such opinions and information, nor does it constitute investment recommendations. The past performance of a fund does not represent its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. This fund can invest in the Hong Kong market as well as other overseas markets. In addition to bearing general investment risks such as market volatility risks similar to domestic securities investment funds, this fund also faces exchange rate risks arising from investing in overseas markets and unique risks arising from differences in investment environment, investment targets, market systems, and trading rules under the Hong Kong Stock Connect mechanism. Investors should carefully read fund legal documents such as the Fund Contract, Prospectus, and Product Information Summary, fully understand the risk return characteristics of fund products, and based on understanding the product situation and listening to the appropriate opinions of sales institutions, make independent decisions on fund investment according to their own risk tolerance, investment period, and investment goals, and choose suitable fund products.
The global China Internet Index (930796. CSI) has performed 32.86% (2019), 69.26% (2020), -40.97% (2021), -16.22% (2022) and -8.11% (2023) respectively in the past five years. The global China Internet Index is prepared and released by China Securities Index Co., Ltd. The index compilation party will take all necessary measures to ensure the accuracy of the index, but does not make any guarantees, nor is it responsible to anyone for any errors in the index. The past performance of the index does not represent its future performance, nor does it constitute a guarantee of fund investment returns or any investment advice. The operation time of the index is relatively short and cannot reflect all stages of market development.