Long term - China $BABA, $BIDU, $TAL, $EDU
Updated
Recently we have been seeing a constant selling pressure from Chinese stocks. These are generating some long term opportunity. Very large MOAT here, with very high uncertainity in the market.
Do focus on the price move and adjust the projected pattern accordingly.
Some might pick
EDU against 
TAL due to their cash position. TAL has a industry advantage being the leader in the education sector, so I favor TAL, with their small investments and large bond sale last year, there is very little risk of further earning dilution in 2021 (constant 3% max). Next Earning Report is Huge.
BABA - DAMN the enterprise value, My model shows to justify the enterprise value BABA is currently trading, we should have a growth rate decline from 46% to 8% and the interest rate for 20 Yr bond to go up 42 - 60%, with EPS of $10 in 2021, 2022. Is that likely? I would argue not all of them will happen.
Therefore, I want to wait for the selling frenzy to be over to take a sizeable position here (Leverage - Go big or go home).
BIDU - The least favoritefor me at this point. If I have to get really interested in Bidu the share better drop another 20%. I am not too keen here.
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This is similar to my 2017 Eurusd Post. FXE play. The reversal is so evident that could really be worth.
Do focus on the price move and adjust the projected pattern accordingly.
Some might pick
EDU against TAL due to their cash position. TAL has a industry advantage being the leader in the education sector, so I favor TAL, with their small investments and large bond sale last year, there is very little risk of further earning dilution in 2021 (constant 3% max). Next Earning Report is Huge. BABA - DAMN the enterprise value, My model shows to justify the enterprise value BABA is currently trading, we should have a growth rate decline from 46% to 8% and the interest rate for 20 Yr bond to go up 42 - 60%, with EPS of $10 in 2021, 2022. Is that likely? I would argue not all of them will happen.Therefore, I want to wait for the selling frenzy to be over to take a sizeable position here (Leverage - Go big or go home).
BIDU - The least favoritefor me at this point. If I have to get really interested in Bidu the share better drop another 20%. I am not too keen here. -----------------------------
This is similar to my 2017 Eurusd Post. FXE play. The reversal is so evident that could really be worth.
Note
OOOI OOOI Jeez!How many articles on
BABA? That just sucks. A wise investor should not position more than 10-20% right now. 90% of these early investors (so called will dump if BABA drops another 5-10%. The bargin then would be best. There are too many weak hands right now based on the amount of coverage on value media coverage.
Note
EDU / TAL - Do you have the stomach to digest. DDIDI - is also close to its intrinsic value (assumptions involved)
Note
EDU is more attractive than TAL. Trading below book. Dont dive in. Enter slowly.Note
BABA will soon be in a the bargain territory. So would BIDU. Let the whole youtube "investors" dump it. Wait.... Need to see more selling. The story will get more serious I am assuming, even if the earnings are good, they will dump it.
Typical "Blood in the street, Hope its not yours." kinda play.
Catching a falling knife is always bad, with a pre hedged option position, you can keep catching them over and over again. You account would not take a major hit.
Note
Specific to EDU and TAL, my friends have asked my position, and am I still Bullish. Yes. As a matter of fact, These are rn trading below Book and Cash Value.
TAL has debt. If they have 50% revenue compared to 2020, they can pay off these debts in 2 - 3 yrs. Delisting fear? Its totally faith in the management, that they will do just. Either a warrant will be issued, or buy back at Book Value. If and Only IF delisting is going to happen.
Wallstreet hates uncertainity, and this is how it create these deep value stocks.
Uday C Santhakumar
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