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The Crisis every investor is waiting for. What you gonna do?There are several factors in the market that raise concerns. Each of which could have a huge negative impact on the economy and the stock market. Lets take a look at it to clear our vision. At least that is what I am doing. What factors could that be. Inflation Wage Inflation Money Supply Money circulation Housing bubble China Regulations China Currency Manipulation China Delta Variance of Covid/ The Warren Buffet indicator In this episode I only will throw my thoughts in for a few things The other items will be explained at a later time. I have a lot of other things to do. Trading is 90% research and only of 10% mouse clicking. Inflation . CPI, the consumer price index, and the PPI, the producer price index. Certain stocks do better than other in an inflationary environment. If inflation hits too high consumer spending decreases and hence the demand shrinks and hence the economy starts to stagnate. We can see that the inflation rate is slowing (red), and the y/y rate (blue) is flattening. But we will see next month. This is something to watch out for. Feds might start tapering earlier than next year. Image missing The Producer Price Inde x is at high a level and sitting there. This will only decrease when transportation, sea ports, can keep up with demand and if raw material and commodity costs will decrease. But this can take a while and I expect the PPI staying at this level for a while and hence costs will be past on to the consumer. Hence the Consumer Price Index will follow. Image missing Wage Inflation . We should also take a quick look at the Wages and what they say.We can see that wages increased dramatically since May 2021 There is a shortage of labor. Labor is a commodity as everything else and the price follows supply and demand. But do not kid yourself. A company has to make profit and the labor is part of Cost of Goods sold, COGS. The company MUST increase prices to balance the wages increases. Thus, you wont make anymore money when you have to pay more at the till for what you buy!!! Wages increases mostly never benefit anyone, not the worker and not the company. The company become less competitive and the Worker pays more afterwards. The ONLY method to increase wages is by cutting taxes because taxes are NOT part of COGS and has no negative impact on companies. Just the opposite. With more money in the pocket the consumer starts more spending and that benefits the companies and they will produce more and hire more people. You see? Think about it. Your wage increase is not worth a dime with inflation. And wages increases drive inflation up! Thats why we advocate for smaller government, less regulations and less government spending. Image missing Money Supply , M1, is the amount of Cash circulating the system. It includes the "Free Money" printed by the FEDs given out to people due to Covid. "Stimulus check". The day-to-day money like cash, coins and checking deposits. We can see that since Covid the money made a huge jump and supply still is increasing. There is an enormous amount of cash in the system but does it circulate? Also keep in mind that when people spend money and do not produce the demand increases but the supply decreases. Add to it the sea ports, transportation bottlenecks and the open jobs, and you know why inflation is increasing dramatically. Image missing M1V is the velocity of Money . This is the speed of money in the circulation of the system. The day-to-day money like cash and coins. How many times a Dollar changes hand in a certain time period. A higher circulation rate or money flow indicates a greater economic activity, money is changing hands quicker. A slower rate of velocity indicates a sluggish or declining economy. Interesting to observe is that with Covid the money circulation fell out of the sky. Yes everybody was laid off. But when you take a closer look the change q/q is still negative, which means the circulation of money in the economy is still slowing down even though at a slower rate! This means that with an increase in money supply at hand of people, we will see a decline in spending!! Not good for the economy. Give me the Retail Numbers. Image missing M2 Money Stock includes M1 plus savings deposits, money market securities, mutual funds. This is one way the FEDs trying to keep the cocaine going. They buy MBA (Mortgage Backed Securities) and Bonds from banks in order to create more demand in order to keep bond prices up and the yields down. The 20 year Treasury Bond ETF, TLT from Barclays, i.e. With this the FEDs keep the money in the stock market. The bond prices are going up when the FEDs keep on buying. But with buying Bonds the yield (interests) are going down since you pay more for the fixed interest rate, which means the percentage of return per bond is shrinking because the yield stays the same but the price for the asset rises. It is an inverted relationship to the TBT. Image missing In the M2SL supply we can see that with Covid there was an money injection. After the Covid the money injection accelerated and is increasing fast, more inflation. And we can assume that lot of this money is with the bank. You can walk into any bank and get a personal loan, because money is a liability for the bank, loans generating profits. We can further assume with all the said before that even the banks do not know in what tangible projects to invest. Where is the infrastructure bill going? There is nothing so far. It is all warm air from the Biden administration. Further reading at investopedia dot com Conclusion Inflation is on the rise and will stay. Wages wont go back to before pandemic levels. Costumers also will get use to paying more for some items, like gasoline, energy and transportation, vacation. The Producer inflation for raw material and transportation is also going up and will stay high for a long time. Inflation cannot grow for ever and at such pace. The Feds have to start tapering soon. Then they will firstly reduc3e buying Bonds and MBA, which will drive the yield up. This also will cool the housing bubble a little since the banks are now required to carry the risks they could push to the FEDs by selling them MBAs. Mortgages will be harder to acquire. When the Feds starting to taper, they will reduce the flow of money, which is not yet increasing anyway, as we can see, they will battle inflation. What is your wage increase of 5.5% this year worth when the inflation hits 6%? Nada. You lose money. At the point of tapering the institutions will start moving money out of the stock market due to risks! And they will put it into bond and or Gold. If there is a crises developing that will include China and the Euro Zone they will also start buying US bonds the USD will rise. This conclusion is preliminary. The housing bubble and other indicator will follow. Please be advised, I am not a financial adviser. I am not recommending any trades. I am just a crazy guy with a wild brain. If you want to see the picture to the story, you have to go to hedgingstocks.blogspot dot com
SP:SPXShort
by Option_Crusader
4
DiDi: Charged by Regulators, Stumbles after Launching its IPOThe central government's probes into major tech-oriented transportation companies are obscuring the development of the likes of DiDi. DiDi took only 20 days to be listed in the US market, which appeared odd to investors and regulators. With over 22 rounds of financing, the mobility company has long been under pressure to make profits for its shareholders. DiDi has occupied a large share of the world's mobility market but still struggles to reach profitability because of high operating risks. The Chinese government's investigation inserted high political risk into any plan to invest in the company's stock. On June 30, 2021, DiDi was listed on the New York Stock Exchange with a ticker of DIDI. It offered 317 million ADS with an initial price of USD 14 and raised at least USD 4 billion during its IPO. Oddly, the company took only 20 days to go public and determined the issue price only three days after the roadshow, one of the shortest IPO processes in recent years. The IPO price increased to USD 16.65, up 18.93%, on the IPO day, and the company's market value reached USD 79.8 billion. However, its stock continued to depreciate after that. Founded in 2012, DiDi Global has been constantly strengthening its business in a quest to become the world's largest mobility technology platform. In 2013, owing to massive investments from Alibaba, Tencent and a few other companies, Kuaidi Dache and DiDi formed a duopoly market in the mobility field in China. The two companies merged in 2015, rebranding as DiDi Global. In 2016, the company acquired the Chinese branch of Uber, monopolizing the domain in the country. As of March 2021, DiDi spanned more than 4,000 cities and towns in 15 countries, providing online car-hailing, taxi, free riding, bike-sharing, motorcycle sharing, agency driving, car services, freight, finance and automatic driving services. DiDi currently has 15,914 full-time employees globally, including 7,110 researchers (accounting for 44.7%), indicating the company's emphasis on technology-intensive operations. Qing Liu, the daughter of Chuanzhi Liu, former chairman of Lenovo, joined DiDi in 2014 and was promoted to the president a year later. Previously, Qing Liu served as managing director of Goldman Sachs Asia. According to the company's prospectus, she and Wei Cheng, the founder and CEO, have become two DiDi controllers, holding over 48% voting rights. Since its establishment, DiDi has received 22 rounds of financing, with a total amount of more than USD 20 billion. These funds came from the finest investment institutions such as SoftBank, Sequoia Capital and well-known companies such as Apple, Toyota, Tencent and Alibaba Group. According to its prospectus, prior to the IPO, Softbank (Vision Fund), Uber and Tencent became DiDi's largest shareholders, with about 41% shares. The company has also attracted investment from several state-owned institutions, such as Ping An and Bank of Communications. Possible reasons behind DiDi's accelerated listing We found at least two reasons why DiDi chose to be listed so quickly. First, DiDi has attracted a bunch of investors since the company was founded. But for many years it did not make a profit, remaining a money-burning startup. In other words, the IPO of DiDi was intended to keep the lights on. Second, we believe that the blocked IPO of Ant Group also had a negative impact. Completing the preparation of all the documents and going public within one month may have been to avoid the supervision of the Chinese government. The latter argues that DiDi may have some operation data that does not conform to the laws of either China or the United States. According to some industry insiders, DiDi earlier planned an IPO – in 2015. This is mainly due to the rapid rise of the Chinese stock market in 2015, with the Shanghai Composite Index soaring by 60% and the Shenzhen Component Index soaring by 122% that year. However, the stock market disaster in the following year postponed its listing. In 2021, with the demise of COVID-19, the US economy is expected to become overheated, and Fed rates are expected to rise in 2022, which may have a negative impact on the stock market. 2021 might be the last chance for DiDi to go public in the recent economic cycle. If DiDi is not listed yet this time, the initial investors' payback periods may be further prolonged, with some even choosing to divest. Financials According to the IPO prospectus, DiDi's total revenue in 2020 reached CNY 141.7 billion (USD 20.5 billion), slightly lower than that in 2019. From 2018 to 2020, DiDi's annual net losses were CNY 15 billion, CNY 9.7 billion and CNY 10.6 billion, respectively. Among the revenue segments, China's travel business accounts for more than 94% of DiDi's total revenue in recent years, of which online car-hailing income contributes more than 97%. This indicates a skewed revenue mix. DiDi attracted services to over 493 million annual active users and powered 41 million average daily transactions by the end of Q1 2021. According to the company's estimate, there are 15 million active drivers in the world every year. In the 12 months ending March 31, 2021, DiDi's global average daily trading volume reached 41 million. The total trading volume of the whole platform was CNY 341 billion, ten times ahead of the nearest rival in China. DiDi has formed a monopoly market in the country's ride-hailing sector. And it seems abnormal for an absolute industry leader to have continuous large losses. It is worth noting that DiDi broke even and made a net profit of CNY 5.5 billion in the first quarter of 2021. Nevertheless, about CNY 12.4 billion was a floating investment profit, and the company still suffered an operational loss of CNY 5.5 billion. Before March 31, 2021, the last day of the reporting period, DiDi deconsolidated the community group-buying business, Chengxin (which was only put into operation for one year) from the Group. The split removed the loss of Chengxin from the statements and converted it into a floating profit of 9.1 billion investment revenue, which looks like window dressing. This, we think, also showed an aim of going for a quick listing and a high valuation. High political and operational risks On July 2, 2021, three days after DiDi's IPO, the Chinese government conducted a network security review of the company on suspicion of collecting user information in serious violation of laws and regulations. Shortly, new user registration of the DiDi app was banned, and then 25 apps related to the company were required to be removed from the App Store and Google Store. According to EqualOcean's research, DiDi launched a drive recorder in 2017. This device provides high-precision surveying and mapping data of China's urban and rural areas, and it is mandatory for all contracted drivers to install the recorder – otherwise, they won't be qualified to leverage the firm's platform. On March 31, 2021, the SEC issued the Holding Foreign Companies Accountable Act (HFCAA), which stipulates that the Public Company Accounting Oversight Board (PCAOB) is responsible for supervising the audit institutions of listed foreign companies. For example, the inspection team should have access to all working papers. However, DiDi's papers contain much important information, such as the mentioned high-precision surveying and mapping data. Considering DiDi's monopoly position and huge user base, once the US government obtains these data, China's national security is bound to face a great crisis. The company was investigated because it was suspected of unauthorized transmission of important data secrets to the United States. Although the investigation is not over, DiDi's bizarre listing and the extremely harsh wording of the Chinese government have magnified the political risk enormously. Another risk comes from its revenue model. The single revenue model determines that the company can only rely on increasing the commission rate taken from drivers. As a result, the drivers are often the object of complaints and dissatisfied feedback, which has also led to the intervention of the regulatory authorities many times. According to Xinhua.cn, the de facto commission rate has risen to 25% or even higher, far higher than the 21% promised by DiDi. Meanwhile, the detailed calculation of the commissions is unavailable for drivers. Even if DiDi continues to increase the commission rate, the company still does not achieve consolidated profit growth, indicating problems in the operation of the company and its business model. Bottom line To sum up, considering the political risks and potential operational problems, we do not think DiDi stock is a good short-term investment target. Besides, there is a looming risk of delisting. (Wall Street Journal reported on July 29, 2021 that DiDi is considering going private and compensating investors, but DiDi commented later on that the information was untrue). DiDi is likely to continue to rely heavily on China's mainland market to generate profits. The company will remain in the government agencies' scope for a while. The board and principal shareholders of the company are likely to change. We anticipate that DiDi will pay more attention to the development of foreign markets, expecting the proportion of overseas business income to increase in the short term. We also believe the company will market its international products separately from the domestic ones, as ByteDance is trying to do.
DShort
by EqualOcean
NIO's Strong Q2 2021 Results: Revenue Up 127%, Net Loss HalvesThe electric vehicle maker generated CNY 8.45 billion this quarter, getting closer to break even. On August 11, 2021, Chinese electric vehicle (EV) maker NIO (NIO:NYSE) released its financial report for the second quarter of 2021, with most key figures improving year on year: The total revenue hit CNY 8.45 billion, up by 127.2% from Q2 2020 and by 5.8% quarter on quarter. CNY 7.91 was made from car sales: NIO beat analysts' estimates, completing 21,896 vehicle deliveries in the second quarter. Net loss reached CNY 587.2 million, shrinking by 50.1% from Q2 2020 but increasing by 30.2% from Q1 2021. R&D cost grew by 62.1% year on year, reaching CNY 880 million; it now equals 10.4% of the firm's total revenue. While world-leading EV maker Tesla (TSLA:NASDAQ) is facing demand-side issues in the Chinese market, its local competitors are jumping in to fill the void. Through supply chain optimization and effective marketing messaging, NIO is solidifying its position as the domestic champion in the EV market's premium segment. For the full article with the charts, please visit the original link.
NYSE:NIOLong
by EqualOcean
Auto Sales - Off the Cliff - TESLA FanBois ImmunityMartha's Vineyard parties are Legend. While Faucci suggests large groups of people gather without wearing masks... many will die. "These people are dangerous." After all there people eat at Sonic and many went to a Community College. Papers please, Vaccine Passport Por Favor. The China Passenger Car Association reported that Tesla's sales in China fell to 8,621 cars in July, down 69.7% from June sales. Tesla Vehicle sales accounted for 3.9% of July sales of EV's in China A decline of 12.6% Month over Month. Tesla believes that China will be 40% of deliveries for Tesla in 2022. With respect to the Long Con and Tesla - Tomorrow never dies, there is always "Hope" projections will deliver. They will not.
FRED:DAUTOSAShort
by HK_L61
8
Xiaomi Expects to Invest Over CNY 13 Bn in R&D in 2021Xiaomi's official Weibo showed that the company's investment in technology research and development (R&D) had increased steadily over the past two years. On August 8, Xiaomi officially announced that its investment in R&D has increased at a compound annual growth rate of 30% in the past two years. In addition to wired and wireless fast charging, the company also has layout and output in chips. As early as February 2021, Lei Jun, Xiaomi's founder, revealed that the firm had invested CNY 10 billion in R&D in 2020. In 2021, Xiaomi will continue to maintain a high investment in R&D, which is expected to increase by 30% to 40% (about CNY 13 billion to CNY 14 billion). The financial report shows that in 2020, the company invested CNY 9.3 billion in R&D, with a year-on-year growth of 23.5%. In the first quarter of 2021, its R&D expenditure was CNY 3 billion, representing an increase of 61%. Although Xiaomi's R&D investment still lags behind some leading mobile phone manufacturers such as Apple, Huawei and Samsung, the firm's sales are impressive since 2021. The Canalys report shows that in Q2 2021, the global smartphone shipments were about 316 million units, with a month-on-month decrease of 9%. Among them, Xiaomi ranked second with shipments of 52.8 million units, showing a year-on-year growth of 83%. This is also the first time that the company ranked second in terms of shipments. On August 5, a report released by Counterpoint Research, a data research firm, showed that in June 2021, Xiaomi's global mobile phone market share rose to 17.1%, surpassing Samsung (15.7%) and Apple (14.3%), ranking first in the world. Meanwhile, its mobile phone sales grew by 26%, making it the fastest-growing brand for the month. For full articles with the charts, please visit the original link.
OTC:XIACF
by EqualOcean
China Tower Achieves CNY 42.67 Bn in Revenue in H1 2021Benefiting from the pulling effect of 5G construction, China Tower revenue and profit have gradually increased in recent reporting periods. On August 9, 2021, China Tower released the H1 interim performance of 2021. According to the financial report, the company achieved operating revenue of CNY 42.67 billion in the first half of the year, up 7.2% year-on-year. The net profit of the company reached CNY 3.46 billion, a year-on-year increase of 16.1%. At the same time, more surprising is that the company's capital expenditure has been reduced to CNY 10.36 billion, down 27.6% compared with the same period last year. Revenue from 5G is the driving force to its remarkable performance. Jilu Tong, the CEO of China Tower, said at the 2021 interim performance meeting that 5G contributed 64.1% to the company's revenue. In the first half of this year, about 256,000 5G construction projects were completed in China, of which 97% were conducted using existing towers, leading the whole work. China Tower has also drawn wide attention, with China Telecom and China Mobile returning to the A-share market one after another. For this rumor, the company responded that the company has no plan to return to the A-share market at this meeting. For full articles with the charts, please visit the original link.
HKEX:788
by EqualOcean
$BABA long term uptrend still valid or not?NYSE:BABA The uptrend support line since the year 2016 is tested. Although it outshoots by a bit due to china news, it rebounds strongly back into the uptrend. With a stable earnings report just announced, plus a lot of new reinvestment done by the management to further increase their revenue, the next few quarters could be quite interesting. If the price can stay around here with a higher rebound, it should prove the support is still valid. Anyway, anything can happen. Let's see.
NYSE:BABALong
by eddyson1006
China ETF GXC - the music ain't overRecently, the China market had dived on regulatory action over the past couple of weeks. It hit a low point way out of range, and then bounced back technically. And the past week saw a range bound attempt to break out. This attempt failed to extend the rally higher out of the range, but instead fell down to the range support. In the process, it left a gap support and held above this in a range. The weekly chart has a rather unique candlestick pattern, where a long tailed hammer body is engulfed by a down candle. This is ominously bearish. The Daily chart is no better, with a failed breakout, and a gamp down to follow through, ending the week at support with ailing technicals. A revisit to the last low is due... More downside incoming!
AMEX:GXC
by Auguraltrader
2
BYD Sold 50,492 NEVs in July, Up 234% from a Year AgoBYD may supply its "blade battery" to Tesla in the second quarter of next year. BYD's new energy vehicle sales in July were 50,492 units, up 234 percent from a year ago and 22 percent from June. So far this year, BYD has sold 205,071 new energy vehicles, an increase of 170.62 percent over the same period last year, it said in an announcement. BYD sold 50,057 units of new energy passenger vehicles and 435 units of commercial vehicles in July. It sold 24,996 battery electric vehicles and 25,061 plug-in hybrid electric vehicles in July. Li Yunfei, general manager of BYD's passenger vehicle brand and public relations division, said in early June that the company's new energy vehicle sales will surpass Tesla China in June and is expected to become the global new energy vehicle champion within the year. BYD sold 41,366 new energy vehicles in June, up 192 percent from the same month last year and 26 percent from May. By comparison, according to the China Passenger Car Association, Tesla China's wholesale sales in June were 33,155 units, up about 122 percent year-over-year. This article was first published by Phate Zhang on CnEVPost, a website focusing on new energy vehicle news from China.
OTC:BYDDF
by EqualOcean
Black Swan - US-China Phase 1 DealSpeculation for Macro: - 2018: Trump began trade war with China, and the market had the worst year in a decade (at the time). - 2020: US-China Phase 1 deal is signed, market crashes shortly after. - 2021: Market immediately rebounds and has the greatest bull market in history. IMO it was a run-up then sell the news by insiders, then BTD for the bull run to come. That deal is to expire 2022, and will likely be assessed soon. Check out the behavior of SKEW/VVIX/PCR right before the Trade Deal... Does somebody know something? Even if it is renewed, it is bullish long term but very likely a big flush for insiders to BTD. If China withdraws, it's recession - returning to a situation similar to 2018 with a tariff tit-for-tat except with current supply chain issues, pandemic, massive debt levels, and slowing global economy. One part of the deal entails China refraining from competitive devaluation of their currency. However, US is devaluing their currency through inflation (speculated). That is bullish for US equities, but CNYUSD is now at the top of a range: Should the deal expire, and China devalues their currency, the US will need to respond with more debt. Can the world handle more debt? Phase 1 Deal: www.reuters.com Full text found here: web.archive.org GLHF - DPT
SP:SPXShort
by UnknownUnicorn1043646
8
NIO Sprints Back into Growth Mode – No Regulatory Risk Thus FarNIO delivered 7,931 vehicles in July 2021, up 124.48% year-on-year, down 2% month-on-month. ● We estimate NIO's 2022 revenue to show the value of the stock. ● The methodology includes a car sales forecast and average selling prices. ● Our evaluation indicates that the stock is currently fairly priced. ● None of the currently acute regulatory risks apply to NIO. Introduction NIO, China's arguably most successful EV startup, saw an incredible performance both business-wise and in the capital market. More investors have joined the camp of those bullish about the electric car maker's prospects. In 2021, NIO has been solidifying a high premium profile in China, launching a new model, the ET7. NIO has also recently started shipping the ES8 to Norway, with global expansion ambitions. This article follows an approach similar to that we used in our latest Xpeng analysis, estimating the value of the stock based on its projected future sales performance. Revenue estimation In this section, we will project NIO's revenue by 2030 and use the 2022 figure to evaluate the stock's current investment potential. The revenue will be calculated by multiplying projected car deliveries with average selling prices. The calculation of whole fleet (including ES6, EC6, ES8 and ET7) sales is based on a top-down methodology. It starts with a forecast of light vehicle sales in China. According to CAAM (link in Chinese), China's light-vehicle sales will hit 22.2 million in 2021. Under an assumption of slowing economic growth affecting the auto market, we estimate the growth rate will decline to 4% gradually. The market will reach 32.6 million in 2030. Speaking of the market share, we assume NIO can reach 2.4% of the total market by 2030. It results from the fact that William Li, the founder of NIO, has aligned the company's goals with those of iconic brands like Mercedes Benz, BMW and Audi. We linearized that number and estimated NIO's 2022 market share and deliveries, which will account for 0.6% and 152,066 units, respectively. To calculate the revenue, we also need to project the average selling price (ASP). Historically, NIO's ASP has been declining as new models have been rolled out. This trend will continue, whereas we think the ASP will remain higher than CNY 300,00 per vehicle. We set a declining rate for ASP calculation, from -2% in 2021 to -0.5% in 2030. The ASP in 2022 will be CNY 328,000. Per this projection, NIO's 2022 vehicle sales will be CNY 50 billion. Apart from car sales, NIO also generates revenue from selling charging facilities and related services, data, insurance and merchandise. These segments have correlated to vehicle sales and shown a faster growth pace. Thus, we project a slightly increasing percentage of revenue from selling them. In 2020, the number was 6%, and we allocated 7% and 9% for 2022 and 2030, respectively. In total, NIO is expected to make CNY 53.5 billion (USD 8 billion) in revenue in 2022. Similar to our Xpeng analysis, we multiplied NIO's PS ratio in 2022 by nine (referring to the Street's average expectations). Its fair market capitalization target is thereby around USD 74 billion. Risks NIO has recently been indirectly involved in the regulatory crackdown-related narrative. We think investors' massive selling may insignificantly hurt the company's business. To specify all the possible risks, we summarize all the incidents concerning Chinese concept stocks within this year. The antitrust and other new regulations are the key obstacle imposed by the central government. Some famous 'victim' cases include Tencent Music's copyrights, Alibaba's 'pick one from two' strategy and Meituan's rider employment and other issues. Obviously, the NEV market in China is still in its infancy (compared with ICE cars). NIO is certainly not a monopoly. Data/cybersecurity concerns are also not suitable for NIO. In early July 2021, it was reported that Didi Global had illegally collected users' personal data. Clearly, the ride-hailing giant possesses huge chunks of users' travel information. However, NIO is also collecting data that seems less significant than important route data handled by legitimate third-party providers like map products of Baidu and the likes of AutoNavi. NIO and its peers won't see anything like what happened to the country's edtech industry either: the central government, which is ''seeking to decrease workloads for students and overhaul a sector that has been 'hijacked by capital,'" is rather interested in the nationwide EV adoption. In short, NIO, much like any local EV maker, is not exposed to these major risks. Apart from regulatory risk, supply chain issues are worth discussing. The issues seem to remain controllable, but investors need to keep eyes on them – the component shortage will be a hot topic in the upcoming Q2 earnings calls. Conclusion Among Chinese concept stocks, NIO is a company with a solid product line, growing sales and great prospects. The stock has gone down and has remained volatile since the beginning of 2021. Suffering from the chip shortage, it is currently fairly priced. And is well set to gain more in the following quarters. For the full article with the charts, please visit the original link.
NYSE:NIOLong
by EqualOcean
1
Farmmi Set to Capitalize on New Wellness TrendsStriving to vertically integrate its business, the company has been preparing for a major boost. ● Farmmi has a long record of unstable financial performance. ● The company's solid supply chain system and business model can integrate online and offline platforms and trigger potential future growth. ● Along with the public's increasing health awareness, Farmmi can seize more opportunities to build extensive global networks and explore new products, like fungi-based snacks. ● The share price of the company is currently hovering at low levels, which might provide investment opportunities in the middle term. Farmmi (FAMI:NASDAQ) is a Chinese agriculture products provider that mainly processes and sells, as of July 2021, four different kinds of products: Shiitake mushrooms, wood ear (or Mu Er) mushrooms, other edible fungi and other packaged dried fungi. The company runs both an e-commerce platform and offline stores. Founded in 2003 and headquartered in a small city in east China, Farmmi is experienced in forming alliances with local family farms that allow the company to offer products to restaurants, cafeterias, local specialty stores, as well as through distributors. Here, we analyze this small share opportunity and discuss the company's potential. Quality – volatile profitability and cash flow generation Farmmi's financials have lately been somewhat unstable. The revenue has been growing slowly – and even declined in 2020; operating income peaked in 2018 and has kept declining since. Farmmi's net income has also shown high volatility. Since 2015, the company has been reporting unstable and negative operating cash flows. Basically, it delivered unfavorable financials all the way after its IPO in February 2018. What is more, the company's capital expenditure kept growing, but the limited value has been generated, resulting in a downward-moving return on capital. Growth – optimistic trends and industry dividends Despite Farmmi underperforming in the past years, investors should not be overly concerned about the lasting effects on the company's future development. We believe the company has a more positive side on financial growth and cash flow stability that will reflect in its future growth. As mushrooms and fungi are categorized as 'wellness food,' Farmmi focuses on such products, exploring overseas markets. Now, 94% of the company's revenue is generated domestically, while 6% comes from international markets, including the United States, Japan, Canada and the Middle East. An insider has informed EqualOcean that Farmmi's top executives have recently been actively building networks and seeking major brand cooperation to further expand in the North American market this year. By May 2021, Farmmi had raised USD 7.4 million of post-IPO financing to fund its business expansion. What is more, with the decreasing price of raw materials and improving cost control capabilities, Farmmi is expected to report better operating margins. So far, the figures have never fallen below the peer average level. Unlike many traditional agriculture producers in the space, Farmmi has been utilizing trendy tools, like web-based products, to ensure its future competitiveness. The recently raised funds are leveraged by the company to enhance its e-commerce capabilities, IT and supply chain systems. These capital expenditures and the integration of online and offline business models may generate more income for the company. The entire industry will release more dividends for Farmmi as well. The Chinese fungi market has been constantly growing since the noughties, providing growth momentum for Farmmi. The health and wellness trend has also expanded the market capacity for mushroom and fungi-based snacks, which Farmmi is building its future strategy around. For most food companies, it is almost impossible to survive for over ten years without a solid supply chain system, technology support and cost and risk management abilities. Paying close attention to these aspects, Farmmi is poised to ride the global wellness trend with the increasing fungi consumption. Price Momentum – upward The stock of Farmmi seems to be currently undervalued. Without any warning signs in its financial performance, the share price has been going down since it went public in 2018, reached the lowest level ever. As a small Chinese food brand, Farmmi might have less recognition among global investors, and we expect this situation to continue in the near future. However, the big picture appears brighter, as the company its making progress in cost control, harnessing technology and has a lot of room for development – both geographically and scope-wise. For the full article with the charts, please visit the original link.
NASDAQ:FAMI
by EqualOcean
EVK "Fibbin" again?EVK hasn't been a stranger to big moves quickly. Nor has it been a stranger to the 382 Fib level either. Now the second time it's tested this area, EVK continues to fail to break and hold above it (as of right now). While there's still a clear uptrend with higher lows, there's a pretty important level that may be of interest right now which is the 50 fib line. It's in "no man's" land after today's spike and looking for some solid support is going to be important for longs. If it does settle around this level, it would be the first time it's established support above the 618 fib line in quite some time. We'll have to see how much follow-through, if any, is in play heading into August. "The main reason for this move comes as the China-based clothing supplier and retailer announced that it would be repurchasing roughly $5 million worth of its shares. 'We believe our stock is a good value, and the Board’s approval of this stock repurchase program is recognition of the long-term prospects in our Company’s intrinsic value and the undervalued price of our stock. Repurchasing stock underscores our commitment to enhancing shareholder value and demonstrates confidence in our business.' - The CEO of EVK, Mr. Yihua Kang. For some added context, Ever-Glory International is the first Chinese apparel company to be listed on a U.S. stock exchange. It offers several brands that cater to middle-high end customer markets. As a vertical company in this market, Ever-Glory is able to control all aspects of its day-to-day operations." Quote Source: 4 Hot Penny Stocks to Watch as August Turns Bullish
E
by PennyStocks101
Li Auto Inc. Delivered Record 8,589 Units in JulyLi Auto added more than 10,000 orders in June, a record high, the company previously said. Li Auto delivered 8,589 units of the Li ONE in July, the first time deliveries exceeded 8,000 units in a single month, up 251.3 percent year-over-year and 11.4 percent from June. Li Auto currently has only one model, the Li ONE, on sale, with total deliveries of 38,743 units in the first seven months of the year, bringing cumulative deliveries to date to 72,340 units, according to data released by the company on Sunday. "Before the end of the year, we will also launch a heavy-weight OTA upgrade that will take Li ONE's competitiveness to a whole new level," said Li Auto co-founder and president Shen Yannan. Li Auto's direct retail system construction is accelerating, with plans to have 200 direct retail centers covering more than 100 cities in China by the end of 2021, the company said. As of July 31, Li Auto had 109 retail centers in China, covering 67 cities, and 176 after-sales repair centers and authorized sheet metal spraying centers, covering 134 cities. Li Auto released the 2021 Li ONE on May 25 with a starting price of CNY 338,000 (USD 52,300), CNY 10,000 higher than the previous version. Deliveries of the new Li ONE began on June 1. Notably, despite the popularity of the 2021 Li ONE, owners are now beginning to complain about problems with the vehicle. Several Weibo users have recently reported that their Li ONE vehicles are making unusual noises at high speeds, suspected to be emitted by the generator. This article was first published by Phate Zhang on CnEVPost, a website focusing on new energy vehicle news from China.
NASDAQ:LI
by EqualOcean
Xpeng Delivered Record 8,040 Vehicles in JulyThe company plans to have the P5 officially available in the third quarter of 2021, with deliveries expected in the fourth quarter of 2021. XPeng Motors delivered 8,040 vehicles in July, its highest monthly delivery record, up 228 percent year-over-year and up 22 percent from June. The company's flagship sedan, the P7, delivered 6,054 units in July, the highest monthly delivery record since its launch, XPeng's data released Monday showed. Cumulative deliveries of P7 reached 40,612 units since its launch in July 2020. XPeng's compact SUV, the G3, delivered 1,986 units in July. As of July 31, the company's total deliveries for the year reached 38,778 units, up 388 percent year-over-year. XPeng previously said the P7 sedan with lithium iron phosphate (LFP) batteries has seen strong demand since its launch in March this year. Deliveries of the model began in May, with sales increasing 27 percent in that month compared to April. In March, XPeng announced the launch of the P7 and G3 with LFP batteries, with deliveries of the former starting in May and the latter in April. The new P7 is available in two variants a combined range of 480km. The new P7 is equipped with Xmart OS in-vehicle intelligence system, with the lower-priced version equipped with XPILOT 2.5 + automatic driving assistance system, priced from CNY 229,900 (USD 35,600). The higher-priced version is equipped with XPILOT 3.0 automatic driving assistance system, priced from CNY 239,900. Together with the newly released model with LFP battery, the XPeng P7 is now available in four models: rear-wheel drive standard range, rear-wheel drive long-range, rear-wheel drive extra long range and four-wheel-drive high performance. Their price range covers CNY 229,900 to CNY 339,900. This article was first published by Phate Zhang on CnEVPost, a website focusing on new energy vehicle news from China.
NYSE:XPEVLong
by EqualOcean
NIO Delivered 7,931 Vehicles in July, Up 124% Year-over-YearNIO's local counterparts, XPeng Motors and Li Auto delivered 8040, 8589 vehicles, respectively, in July. NIO delivered 7,931 vehicles in July, up 124.48 percent year-over-year and down about 2 percent from June. The deliveries consisted of 1,702 ES8s, 3,669 ES6s, and 2,560 EC6s. NIO has completed the delivery of 49,887 units in 2021, exceeding last year's full-year delivery. NIO's 100kWh battery pack is deploying to every battery swap station and the delivery of the 100kWh battery pack will significantly ramp up in the coming months, the company said. At the same time, the first batch of ES8 for user delivery has been officially shipped to Norway and is expected to open for ordering and delivery in Norway in September this year, it said. Ahead of the July delivery data was released, a team at Hong Kong-based financial services firm CMB International raised its price target on NIO earlier today, citing marginal improvement in chip supply and the prospect of continued growth in deliveries in the second half of the year. The team raised its price target for NIO by 13.6 percent to USD 52.60 per share, maintaining a buy rating. NIO closed up 4.83 percent to USD 44.68 on Friday and the price target implies an upside of about 18 percent. CMB believes that in the short term, NIO expects to drive sales growth through increased density of battery swap stations. In the long term, NIO's unique business model of separating the vehicle from the battery will contribute to vehicle sales as it focuses on providing quality service to its customers. Local tech media 36kr reported on Friday that Ai Tiecheng, former general manager of WeWork Greater China, has joined NIO to take charge of the company's mass-market-oriented sub-brand, and that a new model could be released in the first half of next year at the earliest. NIO is the only local Chinese brand that has a firm foothold in the high-end market, with a minimum price of CNY 358,000 (USD 55,400). If customers choose its BaaS battery leasing service, the purchase threshold can be lowered by at least RMB 70,000, but they will need to pay a monthly battery rental fee. The latest data from China Automotive Technology and Research Center shows that the average price of NIO vehicles in May was CNY 432,900, higher than BMW's CNY 391,000 and slightly lower than Mercedes' CNY 435,600. The high-end positioning means that NIO's sales could hit the ceiling earlier than its local counterparts XPeng Motor and Li Auto, and the launch of a mass-market-oriented brand is expected to make that ceiling higher. The so-called sub-brand, a mid-to low-end brand independent of the NIO brand, is expected to be priced in the CNY 150,000 (USD 23,200) - 250,000 market, the 36kr report said. "Li is also factoring in the positioning of the Wuling Hongguang Mini EV (priced at around CNY 30,000)," the report said, citing an unnamed source. The Mini EV is the top-selling EV in China, with sales of 29,143 units in June, up 12.56 percent from May, according to the China Association of Automobile Manufacturers. NIO's sub-brand will follow the battery swap technology, but will operate through a separate system that includes channels, communities and an app, the 36kr report said. This article was first published by Phate Zhang on CnEVPost, a website focusing on new energy vehicle news from China.
NYSE:NIOLong
by EqualOcean
BABA case study: Resolution of 200 days correctionToday we want to share our conclusions about the resolution of huge corrective patterns on BABA. One of the key aspects of Technical Analysis is to take advantage of anomalies in historical data; in other words, take advantage of situations that present some degree of repetitiveness to create a probabilistic scenario in our favor, where risking our money is worth. In this case, we observe that after 200 days of correction, there is a specific sequence for bullish continuation movements. 1) Breakout of the structure 2) Clear Throwback (retest of broken structure) another characteristic is that the correction is very steep 3) The breakout of that correction represents a great opportunity in terms of risk-reward ratio if we set our stop loss below that pattern Past behavior is no guarantee of future behavior, and bla bla bla.... That's absolutely true; however, if you are not in favor of the Efficient Market Hypothesis, you can see that there are subtle patterns in price data that we can take advantage of, not by saying, "This or that will happen, but by trying to get exposure to a specific pattern several times (taking the same trade 10 times), that way we can start observing an edge. So, final conclusion in this case study: Now, we will comfortably sit in our chairs, and we will not do anything until the filter we have defined happens. If that's the case, we know exactly how we will trade. If the filter does not happen, guest what... We don't trade; there are more than 2000 stocks that you can wait for a BEAUTIFUL and PREMIUM scenario. Thanks for reading!
NYSE:BABALong
by ThinkingAntsOk
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