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Speaker 1: We're joined up by Sean Yang, he's managing director at

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Speaker 1: Blue LOADUS Capital Advisers, to talk about some of the

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Speaker 1: big take earnings that we've had out of China, and Sean,

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Speaker 1: I want to start with Alie Barber and get your

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Speaker 1: view on the numbers that we got. A lot of

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Speaker 1: the price action today seems to be driven by the

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Speaker 1: upsizing of the buy back program to the tune of

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Speaker 1: fifteen billion dollars, but other than that, it was a

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Speaker 1: pretty mixed bag. What were your takeaways. I think byepack

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Speaker 1: is definitely something provides a fundamental for the like stock

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Speaker 1: price rady, but I think more investors are looking to

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Speaker 1: the you know, the next stage movement. We we actually

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Speaker 1: think that investors could like you know, long China internet

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Speaker 1: names because if you look at all the active factors previously,

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Speaker 1: like the regulation, macro week, micro economy, the COVID disruption,

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Speaker 1: a lot of factors I think up pricing, and people

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Speaker 1: are more positive about the you know, the you know,

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Speaker 1: gradually easing of the covids like SERO policies and also

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Speaker 1: to improve macroeconomy. And if that is true, that as

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Speaker 1: the major like portal e commerce in China, but Adibaba

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Speaker 1: should be benefited. Yeah, Goldman Sax is making a similar call,

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Speaker 1: really placing a lot on the reopening theme. But I

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Speaker 1: want to just talk a little bit about the semiconductor

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Speaker 1: space because it's very interesting that we're seeing some relative

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Speaker 1: strength among Asian chip related stocks today after the numbers

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Speaker 1: from applied Materials here in the US after the bell uh,

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Speaker 1: the numbers were better than feared. And one of the

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Speaker 1: big things hanging over applied Materials right now the restrictions

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Speaker 1: that have been placed from on the company by the

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Speaker 1: Biden administration in terms of exporting certain semiconductor manufacturing technology

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Speaker 1: into China. Are these restrictions going to hold back technology

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Speaker 1: shares more broadly speaking in China. I see what you're

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Speaker 1: talking about is about more about the hot whale technology.

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Speaker 1: But if you look at Ali Baba and most of

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Speaker 1: its business, I would say ninety five of the business

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Speaker 1: are located in China. So the domestic restriction or domestic

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Speaker 1: regulation environment is much more important than the cross border

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Speaker 1: the restrictions. Well, that's a fair point in terms of

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Speaker 1: e commerce, I get that, but I'm talking more broadly

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Speaker 1: just about technology shares in China overall, Away from e

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Speaker 1: commerce yeah, I think the same. The technology includes a

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Speaker 1: heart well and software and also internet, so I think

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Speaker 1: you need to be differentiated about like which like subsector

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Speaker 1: you are looking at. If you're looking at asking hotware,

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Speaker 1: that first of all, I'm not and it's covering hot well,

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Speaker 1: so I think that probably will definitely bring some impact.

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Speaker 1: But if you look at in the past that this

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Speaker 1: has been already been a factor that has been long

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Speaker 1: handydale and the investors are probably asking is that worse

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Speaker 1: for is that better? Um? So that's more for the

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Speaker 1: for the hot wall, But I think for the internet names,

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Speaker 1: I think as I said, that people are more game

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Speaker 1: for the positive science. If we take a look at

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Speaker 1: Ali Baba shares, yeah, we're seeing a decent pop today,

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Speaker 1: but they're still off fifty on year analyst ratings though

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Speaker 1: fifty buys on Ali Baba four holds just one cell.

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Speaker 1: So clearly the consensus is there's quite a bit of

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Speaker 1: upside from here. What's your outlook, UM, I think it's

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Speaker 1: it's people have reasons to be more positive. We actually

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Speaker 1: still have a cold rating. We we we think that

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Speaker 1: people have reasons to be more positive. But if you

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Speaker 1: look at the commerce names, they're actually better stocks than

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Speaker 1: Ali Baba if you look at it look for buyer ideas.

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Speaker 1: I think j D and the PDDN met one the

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Speaker 1: three competitors. Uh, they probably they're stock more attractive and

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Speaker 1: that are Bi Baba and see their growth are higher

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Speaker 1: than Ali Baba. But I think in general that people

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Speaker 1: are looking for like you know, macro reasons to own

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Speaker 1: the whole Chinda China internet stocks. When you look at

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Speaker 1: the cloud compute in industry in China right now, is

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Speaker 1: that encouraging to you or do you see greater adoption

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Speaker 1: of the cloud um? I think there are some similar

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Speaker 1: stories if you compare with the US, that the penetration

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Speaker 1: is still increasing, but also it's slowing down a little bit.

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Speaker 1: I think Ali Baba is still the largest like cloud

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Speaker 1: service provided in China, but a lot of it's like

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Speaker 1: market share are taken by the telecom companies because they're

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Speaker 1: also raising very quickly. The other thing that is also

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Speaker 1: very similar in the US is that if you look

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Speaker 1: at Amazon, a lot of UH that their customers are

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Speaker 1: internet companies, but the penetration internet companies already to very

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Speaker 1: high level and they need to both Amazon Ai Baba.

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Speaker 1: They need to look for customers outside the Internet sector,

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Speaker 1: like from governments and from financial industry, and this is

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Speaker 1: something that are not very good at because they think

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Speaker 1: they each sector is different like approach, um so, which

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Speaker 1: means that they're definitely going to someone to see some slowdowns.

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Speaker 1: And if you look at Ali Baba's cloud, it only

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Speaker 1: grows like I think four percent something yeah, yeah, discorded.

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Speaker 1: So that's basically a sign that's it's unavoidably slowing down.

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Speaker 1: We've got another big week of Chinese tech earnings next week.

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Speaker 1: You mentioned made one by, do show me also out

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Speaker 1: with numbers. What are you anticipating? What are you're expecting

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Speaker 1: to see? Um? I think at this stage our top

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Speaker 1: by ideas are tencents, Made One, j D, p D

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Speaker 1: D UM. I think that uh we prefer physical internet

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Speaker 1: Internet names that includes e comments and advertising names, then

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Speaker 1: virtual Internet names that includes entertainment and gaming, because we

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Speaker 1: think that if the there's like improved of the macro economy,

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Speaker 1: then those e commers advertising names will be first benefited.

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Speaker 1: So that's why we like Tencent, we like we like UH,

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Speaker 1: made one, we like j D, and we like p

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Speaker 1: D when it comes to game aiming visibly, ten Cent

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Speaker 1: and and where the government stands on licenses. Are you

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Speaker 1: optimistic that Beijing is going to be supportive. UM, I

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Speaker 1: think it's probably the supports that that's it's a little bit. Uh.

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Speaker 1: The first of all, they have a commentary like I

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Speaker 1: think two days ago something that basically that's this that

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Speaker 1: the government is saying that, look, we should be more

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Speaker 1: politive about gaming because like the European like parliament or

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Speaker 1: something like, they make some previdential policies. I think I

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Speaker 1: think that's just like change of the tongue. And uh,

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Speaker 1: you see that yesterday Tens and that has got their

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Speaker 1: like game called approval. I think that's has been long

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Speaker 1: time waiting. So I think investor could be more potifle

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Speaker 1: about gaming. We are going to see TENS and that

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Speaker 1: is to obtain more games in coming month, and that

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Speaker 1: can that can be a very important reason to to

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Speaker 1: support their growth. Sean, good conversation. Thanks for taking time

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Speaker 1: to chat with us. Shaun Yang is a managing director

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Speaker 1: at Blue Lotus Capital Advisors, joining us from Shenzen Here

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Speaker 1: on day Break Asia