Aug 2, 2021

Cory Diary : The Crackdown of China Mega Companies

The Crackdown

China crackdown on Tech and Education sectors have seen major corrections. Investors who are Pro Chinese economy suffered the most if they are vested in share of this Chinese companies. Wonder who's next on the list ?

To give a glimpse how deep it is.

Peak of Alibaba (HK) was HK$307.40, now is HK$189 over 8 months. That's -38.5% decline.

Peak of Tencent (HK) was HK$775.50, now is HK$549.5 in just 5.5 months. Declined -29.1%.

Peak of Mei Tuan (HK) was HK$460, now is HK$215 for -53% in about 5.5 months.

On the positive aspect, the price only slipped back to mid of last year which compared to Education Sector basically close to being annihilated over 5 months. Not going into why they are doing this but certainly CCP does a better job that Trump couldn't for his entire term.
And this comes to how unbelievable it can be on state engineered collapsed of the companies. It is basically one-sided affair without any compensations to shareholders. Can US shareholders sues China ? This going to be serious if they won except that they have never approved their listing. Sounds like CLOB huh ? 

What we have learned is that probably we should  diversify if we want to have China exposure. So that's what I did recently. Initiated new small positions in HST except it is still Tech. So my main worry now is how bad can it get for Tech. Will have to go slow on my purchases. Someone mentioned to wait for uptrend. That's probably a good suggestion. At the mean time, stanch believers of Chinese economies will have hard pills to swallow politically.

Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

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