“At this point, there are no other stocks that can challenge our position in China,” Wong, director of asset management at Amberhill, told CNBC’s “Street Sign Asia” Thursday.
Alibaba and Tencent are “still benchmarks” among China’s tech stocks, he said. Wong’s family and Amber Hill both own shares in the two companies.
His comment is that China’s tech stocks in Hong Kong have been lagging behind other sectors so far this year.
Various factors are causing the performance of the technology sector, which accounts for more than 42% of Hong Kong’s benchmark index, to be relatively poor.
One of the reasons is that bond yields are rising. This reduces the relative value of future returns and damages tech and other growth stocks.
Another concern is Delisting threats from the United States China’s tech stocks, which are also listed on the US, have been hit this year as new US legislation could block the trading of securities that violate the rules of the US Securities and Exchange Commission.
Looking to the future, Wong acknowledges that political headwinds and potential regulatory rules in the future could “actually undermine” the profit outlook of the two Internet giants that dominate China’s tech sector. I did.
But he hopes that “a kind of compromise” will eventually be achieved in terms of regulation.
“In the future, their valuations may not be 50x or 60x profitable. Still … they are trading about 30x profitable and are in a very good position in China. “Won said.
He mentioned price-earnings ratio (P / E). This is a measure of a company’s stock price and earnings comparison. A high price-earnings ratio may indicate a high stock price compared to its earnings.
According to Refinitiv Eikon data, Alibaba’s Hong Kong-listed stock had a price-earnings ratio of 26.34, while Tencent’s price-earnings ratio was 33.36.
Alibaba, Tencent remains a “benchmark” in Chinese technology, investors say
Source link Alibaba, Tencent remains a “benchmark” in Chinese technology, investors say