| | | Doing a copy/paste of an entire section from a 24 page Morgan Stanley report:
June 26, 2018 12:32 AM GMT
China Equity Strategy
HK/China Stock Ideas for a Bear Market
[snip to page 13]
China Internet (MS Analyst: Grace Chen)
China internet companies report in RMB. Both the revenue and costs are mainly from
China and in RMB, thus the impact from RMB weakness against USD should have
limited impact.
The impact should be slightly bigger on e-commerce players like BABA and JD. However,
the revenue from international markets should be small. For example, we forecast
international retail/wholesale revenue will make up 7% of BABA’s revenue in F19. JD
didn’t report sales/costs from overseas, but should be small at single digit as well.
However, the trade war should bring negative sentiments as many of them plan to
expand overseas.
Stock ideas:
Within the sector, continue to prefer BABA, Tencent and Baidu to JD.
[end copy/paste]
The only reason I do not hold shares of TCEHY is because I hold shares of Tencent's largest shareholder, Naspers (NPSNY), so I am just keeping an eye on TCEHY for now. |
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