Seeking Alpha

Chinese tech stocks sell off on weak export data

  • Chinese Internet and solar names, many of them among the standouts of the 2013/2014 tech rally, are heading into the close with steep losses after the Chinese government reported exports fell 18.1% Y/Y in February (much worse than expected).
  • Internet decliners: WUBA -10.7%. YOKU -7.3%. ATHM -7.2%. QUNR -6.4%. NQ -6%. RENN -5.2%. CTRP -5.2%. YY -4.4%. WBAI -4.4%. KONG -5.5%.
  • Solar decliners: JKS -6.3%. YGE -5.8%. TSL -6.7%. CSUN -4.9%. CSIQ -4.5%. DQ -4.2%. HSOL -4.5%.
  • Solar ETFs: KWT, TAN
Comments (7)
  • t time
    , contributor
    Comments (190) | Send Message
     
    THis is partially a result of China increasing worker wages and finding that some products are no longer as competitive. The days of "cheap" Chinese labor is mostly behind us - and as a result, the exports go down.

     

    Not to be confused with the dip in YY, however. This stock is incredibly strong, and I am very bullish for YY during 2014. I believe the trend since IPO will continue as this social media platform (did I read once they gained 20 million users in just one month?) sweeps the growing number of computer savy teenage Chinese (there are a whole bunch of 'em over there!) - and I am very long on YY. Take advantage of this dip - see if you can grab it for as low as 76 to 78 and HANG ON! It will be 120 soon! Facebook / Utube combined - and playing in the largest growing market in the world...!!! Yeah buddy!!
    10 Mar, 04:17 PM Reply Like
  • nedilwo
    , contributor
    Comments (55) | Send Message
     
    t time: Probably a fair point on YY (YY -4.4%), but that is just one of the many stocks that fell today. By chance did you misinterpret the statement, "
    "Chinese government reported exports fell 18.1% Y/Y in February (much worse than expected)."
    Do you have any perspective on the others noted in the article. I'm not betting on RENN - still no guidance that I can can see and Baidu bought out Nuomi. WUBA had a great Q4 and strong forward guidance. I don't know about WBAI, but it's a competitor to WUBA.
    Disclosure: long Baidu, WUBA
    10 Mar, 05:09 PM Reply Like
  • canb888
    , contributor
    Comments (267) | Send Message
     
    What do internet stocks like Yoku have to do with China's exports which are mainly consumer goods? or is it just an excuse to take profit and blame it on something what ever unrelated?
    10 Mar, 08:44 PM Reply Like
  • bashiru
    , contributor
    Comments (117) | Send Message
     
    I think the sell-off was hinged primarily on the premise that paying subscribers to internet websites will not have enough disposable income if China's income generating exports continue to dwindle.
    10 Mar, 09:43 PM Reply Like
  • t time
    , contributor
    Comments (190) | Send Message
     
    nedilwo, I like QIHU, BIDU, and NTES - the former more than the latter. Also ZX (but taking a chance on that one). Interesting, Zacks downgraded YY from 'strong buy' to 'hold' - but I don't agree - try to find the dip. (BTW, I didn't confuse Y/Y with YY - but it did make me think of the stock, and I just happen to be very bullish on it right now).

     

    Bashiru, these kids don't really pay for the subscription (they can buy stuff once signed up) - but more like You Tube - YY make money through adverstisements and this shouldn't be directly linked to exports. In fact, quite the opposite - the fact is the CHinese are making more money (and the reason exports are more expensive). Just my 2 cents.
    11 Mar, 09:59 AM Reply Like
  • bashiru
    , contributor
    Comments (117) | Send Message
     
    Agreed!

     

    Advertisements are primarily to sell products to various target audience or population; however, potentially reduced disposable income will adversely affect revenues needed to pay for expensive advertisements. Just saying :-/
    11 Mar, 09:13 PM Reply Like
  • lizst
    , contributor
    Comments (4) | Send Message
     
    The Chinese program this slowdown a year ago I don't know why everybody surprise when they said it was going to be done. The housing price inflation, pollution, credit bubble and so on. This is just the cost of growing too fast.
    11 Mar, 04:22 PM Reply Like
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