The cold share of Internet share dividends began to disappear?


The cold share of Internet share dividends began to disappear?

US stocks suffered another round of collapse on Monday. Apple's stock closed down 5% on expectations of a downward trend for its iPhone suppliers, dragging down the technology sector in the U.S. and its Asia-Pacific suppliers.

The fall in Apple's share price is only the trigger of the sharp fluctuations in the US stock market, but this "domino effect" also triggered the collective decline of Zhongguo shares. The performance of China's electricity supplier just finished the "double eleven" Carnival is not satisfactory.

At Monday's close, Alibaba and Baidu fell by nearly 2%, Netease by 4.2%, Weibo by 4.5%, Pingduo by 6%, Weilai by 2%, and Interesting headlines by 13%. In addition, IQI, Momo, Dali and Jumei by 2%-6%.

Consumer Internet dividends disappear?

Tan Huimin, chief investment strategist at BNP Paribas Wealth Management, told First Financial Journalist: "We've been looking at Ping American stocks and the global technology sector for some time, mainly because their prices have rebounded excessively, and in the short term they have been overbought and their valuations are relatively expensive. Therefore, we believe that this amendment is necessary for the medium-term pattern, and it can help the market remove some bubbles. "

In addition to the overall situation of the U.S. technology sector, the slump in Zhongquan also suggests that China's consumer Internet dividend may be beginning to disappear.

Driven by Internet consumption, Chinese technology companies have enjoyed unparalleled high growth in the past few years. In 2017 alone, Tencent, Baidu and Alibaba almost doubled their market capitalization, which also gives these technology companies more capital to make big investments, such as increasing cloud business and offline business. Investment in physical stores and financial businesses.

But now market winds are shifting. Alibaba has lowered its revenue forecast for the first time since 2014, and its sales in the past quarter have also hit the lowest growth rate since 2015. Jingdong recorded a loss in its first quarter earnings report.

The decline in corporate earnings has evaporated the market value of China Capital Technology Co. by nearly $500 billion this year. This also puts pressure on new technology companies, such as Ulai Automobile and Todo, whose shares fell 33% in October.

The ETF fund, which holds 74 shares of different Chinese technology companies, has fallen by 30% this year. It also reflects that China's technology companies that rely on economic growth are losing their favor in the capital market. Prometheus Fund, a technology-focused fund, recently released a report showing that this year is the first time in 30 years that high returns for technology companies have begun to face risks. From all dimensions, technology companies are in cold weather, whether in terms of the amount of investment, scale or financing, there is a significant decline.

China's technology companies are facing double pressures of domestic economic downturn and stricter supervision, especially game companies and Internet financial enterprises. Affected by this, Tencent shares have fallen more than 25% this year.

The performance of cheetah mobile listed on the NYSE in 2014 has also been under pressure this year. Cheetah Mobile CEO Fu Sheng responded to stock prices in an interview with First Financial Journalist at an Internet conference held in Wuzhen last week. Fu Sheng said: "share prices are very low and there is pressure. But I think the mechanism of U.S. stock market is also very good. It won't go up because of one news. You really need to make a performance. Although it is very cruel, but also very fair, forcing enterprises to innovate constantly, the closed-loop innovation is key, from a mechanism point of view, it is more reasonable.

New regulations force ETF to adjust positions

Deng Zhijian, Director of Wealth Management Strategies at Star Show Bank (China), also told First Financial Journalist that the fluctuations in technology stocks were related to MSCI's announcement in September this year that it would adjust the industry standards of its Global Industry Classification System (GICS), mainly for the technology industry. Firstly, the main technology stocks of China stock market, such as Tencent, Alibaba and Baidu, will be removed from the IT industry of MSCI China Index. Secondly, the telecommunication service will be renamed as telecommunication service, which will be included in the periodic sector. Electronic commerce will be transferred to the consumer sector, that is to say, Tencent and Baidu will be included in telecommunications in the future. Service sector, Alibaba will be included in the consumer goods sector.

"This means that ETF, which tracks the index of S&T stocks, should adjust its position and technology funds should gradually sell such stocks. Therefore, the short-term volatility of stock estimates is also related to this factor." Deng Zhijian told First Financial Journalist, "But when the adjustment is gradually completed, market sentiment will stabilize. When we re-focus on corporate performance, as long as the profits are stable, some companies'valuations now falling will be more attractive."

In the downturn of the US stock market, more and more Chinese technology companies begin to consider the upcoming domestic science and technology start-ups. In response, Fu Sheng told First Financial Journalist: "The advantage of the registration system is to let the market mechanism decide, the regulatory authorities are only responsible for compliance, and very strict, the process is also transparent."

Huang Guobin, Chief Executive Officer and Managing Director of J.P. Morgan's Global Investment Banking Department, told First Financial Journalist: "We are also very interested in Sci-Tech and will pay close attention to the details of the launch."


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