China and US Equity Analyst

Roger Xie

Equity Bottom-Up

Weibo Corp is a social media platform for people to create, distribute and discover Chinese-language content.  The Company offers users public self-expression in real time with a powerful platform for social interaction, as well as content aggregation and distribution.

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<a href="https://www.smartkarma.com/entities/weibo-corp-adr" target="_blank" data-smartkarma-citation="entities:3826:1" rel="noopener">Weibo Corp (WB US)</a> delivered robust 1Q22 results with ad revenue growing 10% year-over-year and outperforming other Chinese social networks, which underscores Weibo's prominent position for advertisers.</li>
<li>However, widespread lockdowns in China and economic slowdown could pressure Weibo in 2Q, and we expect a gradual recovery in 3Q-4Q with limited visibility. </li>
<li>We like Weibo attractive valuation at 10x forward P/E; it has amassed MAU 582 million till March 2022 and user engagement has been improving.</li>
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Weibo Corp (WB US) delivered robust 1Q22 results with ad revenue growing 10% year-over-year and outperforming other Chinese social networks, which underscores Weibo's prominent position for advertisers.
However, widespread lockdowns in China and economic slowdown could pressure Weibo in 2Q, and we expect a gradual recovery in 3Q-4Q with limited visibility. 
We like Weibo attractive valuation at 10x forward P/E; it has amassed MAU 582 million till March 2022 and user engagement has been improving.


Weibo (WB US): Ad Growth Clouded by Pandemic and Macro Slowdown

Cross Asset Strategy

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<li>Stablecoin <a href="https://www.smartkarma.com/entities/terrausd" target="_blank" data-smartkarma-citation="entities:35209:1" rel="noopener">TerraUSD (UST CURNCY)</a> has de-pegged from USD; the implosion put pressure on <a href="https://www.smartkarma.com/entities/tether" target="_blank" data-smartkarma-citation="entities:35208:1" rel="noopener">Tether (USDT CURNCY).</a> This resembled the confidence crises that precede bank runs.</li>
<li>The incident happened under macro headwind such as tech stock sell-off, rising benchmark interest rates and TerraUSD specific algorithm design. </li>
<li>The bigger worry of de-pegging has investors to re-assess the reserve behind stablecoin in the crypto ecosystem; we expect the ripple impact will continue for some time before settling down.</li>
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Stablecoin TerraUSD (UST CURNCY) has de-pegged from USD; the implosion put pressure on Tether (USDT CURNCY). This resembled the confidence crises that precede bank runs.
The incident happened under macro headwind such as tech stock sell-off, rising benchmark interest rates and TerraUSD specific algorithm design. 
The bigger worry of de-pegging has investors to re-assess the reserve behind stablecoin in the crypto ecosystem; we expect the ripple impact will continue for some time before settling down.


Crypto: Perfect Storm on Stablecoin Infrastructure

Yum China Holdings, Inc. operates chain restaurants. The Company offers pizza, entrees, pasta, rice dishes, appetizers, soups, vegetables, beverages, and desserts. Yum China Holding conducts its business worldwide.

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<a href="https://www.smartkarma.com/entities/yum-china-holdings-inc" target="_blank" data-smartkarma-citation="entities:23677:1" rel="noopener">Yum China Holdings, Inc (YUMC US)</a> delivered a better-than-fear 1Q22 results helped by its strong execution. KFC delivered solid margins above expectations given its store format and take-out service.</li>
<li>China COVID outbreak is getting worst, we expect 3000 stores will cancel dine-in service in April (compared with 1700 stores in March). Yum China might have deeper loss in 2Q22. </li>
<li>We continue to think Yum China is the best-run restaurant chain in China. It has resilient business model to navigate through pandemic. Risk/reward is more compelling to own Yum China.</li>
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Yum China Holdings, Inc (YUMC US) delivered a better-than-fear 1Q22 results helped by its strong execution. KFC delivered solid margins above expectations given its store format and take-out service.
China COVID outbreak is getting worst, we expect 3000 stores will cancel dine-in service in April (compared with 1700 stores in March). Yum China might have deeper loss in 2Q22. 
We continue to think Yum China is the best-run restaurant chain in China. It has resilient business model to navigate through pandemic. Risk/reward is more compelling to own Yum China.


Yum China (YUMC.US): COVID-19 Headwind Will Have More Impacts in Q2

Hong Kong Exchanges & Clearing Limited owns and operates the stock exchange, futures exchange, and their related clearing houses in Hong Kong.  The Company provides the trading platforms for a range of cash and derivatives products and the facilities for processing trades.

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<a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> core businesses such as cash market and stock connect remain robust against the backdrop of relatively low expectation.</li>
<li>Mark-To-Market investment loss underscored the volatile fixed income market, we expect the negative impact will continue into 2Q22 as the shift in rate environment.</li>
<li>MSCI China A50 future continues its rapid ramp-up, ADV is up 86% quarter-over-quarter. Overall future trading is strong, ADV is up 39% quarter-over-quarter.</li>
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HKEX (388 HK) core businesses such as cash market and stock connect remain robust against the backdrop of relatively low expectation.
Mark-To-Market investment loss underscored the volatile fixed income market, we expect the negative impact will continue into 2Q22 as the shift in rate environment.
MSCI China A50 future continues its rapid ramp-up, ADV is up 86% quarter-over-quarter. Overall future trading is strong, ADV is up 39% quarter-over-quarter.


HKEx (388.HK): Resilient 1Q22 Earning Results Better than Feared

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<li>SEC rejected several applications to offer bitcoin spot ETF, and Grayscale Investment is considering suing the agency turns down its long-running proposal to convert its bitcoin trust to an ETF.</li>
<li>FED offered a balanced view on risk and reward of potential US central bank digital currency (CBDC), which could imply that FED might intend to issue CBDC in the future.</li>
<li>We estimated crypto trading volumes are down over 40% quarter-over-quarter on the back of lower prices and volatility. Bitcoin spot price was down as much as 27% in 1Q22.</li>
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SEC rejected several applications to offer bitcoin spot ETF, and Grayscale Investment is considering suing the agency turns down its long-running proposal to convert its bitcoin trust to an ETF.
FED offered a balanced view on risk and reward of potential US central bank digital currency (CBDC), which could imply that FED might intend to issue CBDC in the future.
We estimated crypto trading volumes are down over 40% quarter-over-quarter on the back of lower prices and volatility. Bitcoin spot price was down as much as 27% in 1Q22.


Crypto: Bitcoin Spot ETF And Fed Digital Currency Report

10 year investment experience on public and private equity. Deep-dive fundamental research. Specialize in China and US market.