In This Article:
Brendan Ahern, chief investment officer at KraneShares, appears on Market Domination to discuss his bullish outlook on Chinese tech stocks like Trip.com (TCOM) Alibaba (BABA), JD.com (JD) and Pinduoduo (PDD). He thinks one of that "green shoots" for China's economic recovery has been travel. He expects that broaden out to e-commerce more broadly.
In the video above, Ahern joins Market Domination hosts Josh Lipton and Akito Fujita to dive more into the subject.
To watch more expert insights and analysis on the latest market action, check out more Market Domination here.
This post was written by Josh Lynch
Brendan, let's talk about investment, um, specifically looking at KWEB, Kraneshares ETF. Obviously up about 10%, looks like year to date. Um, what are some of the China tech names you're especially bullish on going into 2025?
Yeah, I think we're we're starting to see the green shoots of um, of the Chinese recovery. It's it's been travel. So companies like trip.com have been beneficiaries. Uh, certainly Meituan has been a beneficiary of some of the consumption vouchers we're seeing. Um, but we think that that rally will broaden to uh, e-commerce in general, which will help the Alibaba's, jd.com, the Pinduoduo, you know, so we think we think that you're again, you're seeing just the start of this stimulus effort starting to trickle into the economy. And we think that the Chinese government will continue to press the gas pedal as needed.
Brendan, broadly, how do valuations look to you?
Um, and you know, Josh, it's it's been dirt cheap. Um, I mean, certainly what we found uh, is that the valuations have not been a catalyst uh, for this space that that these names are trading in the low teens in many cases. Some of these companies are buying back stock in the low single digits. So, so the valuations really hasn't been the count. I think it's the geopolitical has kept a lot of investors on the sidelines. Some of that is the very strong dollar that's made non-US equities persona non gratis, uh, for many investors for for, you know, 15 years now. But we think some of there's a few positives happening there, uh, but again, I would caution people on looking at just being cheap as a as a catalyst.
Brendan, you hit on some of the investment themes, um, going into 2025. I didn't hear you necessarily talk about AI, and I wonder how you're thinking about some of these big China tech names in the context of that, a name like Baidu. I mean, how big of a driver do you expect that to be?
Yeah, I mean, I think certainly what we're seeing is, uh, one of one of one of the things that some of the companies have spoken about is how competitive the AI space is in China. And so so there's no boat, there's no moat for companies that innovate and create their own AI or their own large language models. And and some of the countries have actually spoken to that. So so it's interesting that in China these companies get no AI premium. Companies like Baidu, um, I mean, you saw a bit of a bounce with Tencent, uh, that it's uh, apparently in in talks according to Reuters about uh, being part of the iPhone China AI phone. So so we'll see, but but again, these these companies, even though they're doing a lot in the space, there's no premium unlike their US peers.
