No. of Recommendations: 4
Ant,

I was reluctant to post about TME as I wasn't sure whether all sorts of high growth stocks are welcome here or if this board is set up to only discuss software as a service/cloud stocks.

I think TME has lots of potential so decided to introduce it to this board.

Yes, China has been battered over the past year but it appears to me as though its stocks have now bottomed out.

I live in Hong Kong (been here since 1997) so know this part of the world fairly well.

I know that many posters on this board have sworn not to invest in Chinese companies and this is understandable given their bad experience with the reverse merger scams in 2010-2012. Unfortunately, I was also personally stung by a few of those scams (Deer Consumer Products, RINO, Wonder Auto etc.); but looking back, it was my own fault for investing in these issues. After all, those companies had no analyst coverage, institutions and major funds did not own shares and given their growth rates, their market caps/valuations were insanely cheap!

Fast forward to today, the current crop of Chinese businesses listed in the US don't appear to be scams - they are dominant/viable operations with 'monopolistic' characteristics. More often than not, they are led by billionaire founders with skin in the game and their valuations are now super cheap (PEG ratios of 0.5 to 1 are the norm, rather than the exception).

So, I've been gradually increasing my exposure and think these investments will produce 20-25%CAGR over the next few years.

I have positions in the following Chinese businesses -

Alibaba (BABA)
Baozun (BZUN)
Baidu (BIDU)
IQ (IQ)
Ping An Healthcare & Technology (HK - 1833)
Tencent (HK - 700)
Tencent Music (TME)
Weibo (WB)

All of the above businesses have 'moats' and are growing rapidly. Their operating results may weaken during any economic slowdown but I am optimistic about China's long-term prospects.

Best,

GM
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