ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Emerging Markets Channel
  2. Some Good News for Chinese Internet Stocks
Emerging Markets Channel
Share

Some Good News for Chinese Internet Stocks

Tom LydonJan 31, 2022
2022-01-31

It’s been a while since investors had something to cheer about regarding Chinese internet stocks. The 2021 regulatory regime enforced by the Chinese Communist Party (CCP) saw to that while ushering in major equity price erosion.

However, there could be some good news emerging, and it might prove material for exchange traded funds, including the Emerging Markets Internet Ecommerce ETF (EMQQ C+). EMQQ isn’t a dedicated China ETF, but it allocates over half its weight to Chinese equities, including some that were drubbed by the aforementioned regulatory crackdown.

Emerging markets equities aren’t yet anything to write home about in 2022, but some analysts believe that select Chinese internet stocks offer potential upside as the year unfolds, and that could provide support for EMQQ as a rebound candidate. Count UBS among those seeing some reasons to be constructive on Chinese internet stocks.

“Alibaba has been a poster child for the Chinese government’s crackdown on alleged monopolistic behavior. Since economic growth began slowing in the last several months, analysts say the worst of the regulatory crackdown might be over as authorities focus more on supporting the economy,” reports Evelyn Cheng for CNBC. “The beginning of the UBS analysts’ positive turn began in November, with an upgrade of emerging markets consumer discretionary stocks, which includes many internet companies.”

Alibaba (NYSE:BABA) is EMQQ’s third-largest component at a weight of 8.71%, as of January 27. UBS is also bullish on several other EMQQ holdings.

“The UBS analysts added several other Chinese consumer discretionary stocks to their high conviction list for 2022. Those names include e-commerce and logistics giant JD.com, food delivery giant Meituan and electric car company BYD. Each of these new additions has a 1.9% weighting in the UBS list of top 40 emerging market stocks,” according to CNBC.

Meituan and JD.com are EMQQ’s second- and sixth-largest holdings, respectively, combining for just over 14% of the ETF’s weight.

A simple catalyst could fuel an EMQQ rebound: earnings. In other words, some of the fund’s components are likely to deliver 2022 earnings growth in excess of the MSCI Emerging Markets Index.

“We think our new Top 40 offers superior earnings growth as its weighted median 2022 [estimated earnings per share growth] is 9.8 [percentage points] above the consensus estimate for MSCI EM, and its 15.4% trailing [return on equity] track record is far higher than the 13.4% EM average,” notes UBS.

For more news, information, and strategy, visit our Emerging Markets Channel.

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X