Max Zhang’s Post

Private businesses in China have long had to figure out how to operate without being crushed by the authorities. China’s main stock exchanges in Shanghai and Shenzhen were established in the early 1990s as part of reforms that transformed China’s economy, but public offerings were mostly limited to companies controlled by the state. Between 2011 and 2018, China had about the same number of I.P.O.s as the United States. In 2019, China launched the Star Market in Shanghai to encourage tech companies to go public there. But Chinese investors and company founders preferred to list in New York if they could. Since Didi delisted, Beijing has made it clear that the power and the profits of China’s private industry should be directed toward the country’s push for technological self-reliance. Investment has poured into cutting-edge fields like semiconductors, artificial intelligence and data centers. In May, the government registered a $47.5 billion fund dedicated to semiconductor development, sending a signal to entrepreneurs and investors that while some industries may be riskier bets, these have the seal of approval

Taking the market by surprise, Alibaba Group Holding Ltd has cancelled plans to spin off its #CloudComputing division, stirring renewed concerns among investors about the stability of Chinese #TechnologyStocks, according to a report in the Australian Financial Review. This decision comes amid a broader context of mixed earnings reports in the sector. Alibaba shares have witnessed a significant 10% drop in Hong Kong following the decision, which was influenced by the United States' restrictions on the sale of advanced semiconductors to China. This development mirrors a similar statement from Tencent Holdings Ltd, highlighting the impact of these trade restrictions. More at #Proactive #ProactiveInvestors #HongKOng #ChineseTechStocks http://ow.ly/8rty1052MfQ

MASSIVE week of China tech results next week. Tencent and Alibaba on Tuesday, JD.com and Baidu (and probably Meituan) on Thursday. Key things to look out for: - continued margin recovery and expansion - update on buybacks, since these companies are sitting with significant net cash balances. Alibaba has bought back $30bn over the last year and currently plan to buy back almost 20% of their shares over the next couple of years. The CSRC's 9 point plan to improve the quality and returns from the Chinese equity market, new reforms (considering scrapping dividend tax) and stimulus announcements have been positive catalysts. The Chinese equity market has sneakily outperformed the S&P 500 by >10% over the last month. Has the rotation started? Most Developed Market based investors call China uninvestable. The Chinese economy will have to digest the property bubble for many years, so best to be selective with the exposure you take. Fortunately high quality, growth companies are now trading at single digit Price/Earnings multiples. Link to the Fairtree Emerging Market fact sheet where we have 29% exposure >> https://lnkd.in/eX78nfzv #investing #marketinsights

The Accidental US Taxpayer - How Many Non-American HNW FAANG Investors are Guaranteed to Lose up to 40% The Nasdaq 100 is making all-time highs – led in part by the usual team of FAANG stocks – Facebook, Apple, Amazon, Netflix, and Google (but do not forget the rest, and apologies to Bill Gates!). Many high-net-worth investors today have made significant fortunes by sticking to a buy and hold strategy in the US tech sector with the new focus on AI and the stocks that will benefit from this new paradigm. The latest Op-Ed from our Engagement & Consultant Partner, Mark Smallwood TEP sheds light on U.S. Estate Tax Risks for Non-Resident Alien Investors.

An excellent and succinct summary of an issue we’ve highlighted to our partners for years. There are several easy ways to solve the problem, the simplest being PPLI.

In a remarkable turn of events in the worldwide technology sector, the stock values of Chinese tech behemoths Alibaba and Tencent have experienced a significant upswing. This increase in stock values is a result of investors' growing belief that the period of China's stringent control over the tech industry may be nearing its conclusion. #Alibaba #China #EmergingMarkets #TechSuppression #Tencent

When Xi comes for his visit, and everyone talks about how bullish REglobalization is for the economy, remember your old pal, Chris. https://lnkd.in/ejcE3jvA #Apple #XiJinping #XiVisit #reglobalization #deglobalization #trade #internationalaffairs #Taiwan #geopoliticalrisk

It’s a repost of a repost etc and many of us in the tax mitigation space will concur … Here is another inconvenient truth that investors don’t want to hear or when they do, think you have been swigging on old grandmas cough syrup 👵. Well, the only thing that will make you cough is that not only is there a 40% estate liability but there is 30% withholding tax too; each year 😳. Since the latter is latent ie its taken at source, most have no idea they are losing this optional tax for non-resident aliens of US assets. The next bleat I hear is that my Banker/Lawyer/Trustee or similar has not told me so therefore it cannot be true. Well, articles like this, a bit of Google not to mention a glance at the IRS website if you dare, will confirm this has always been the case. ✅ “It’s just the cost of doing business in the US …” I have heard Bankers quip. Easy to say, but they are not the ones losing 30% each year on dividends not to mention the risk of a 40% estate tax. I bet their bonuses that every client would like to mitigate this 30% not to mention, prevent the IRS taking 40% away from their family’s inheritance. 💵 If you are an investor from anywhere in the world, regardless of your tax status or holding structures you use, and you have any kind of exposure to the US, directly or otherwise, it makes sense to review how efficient you are investing in one of the most exciting but tax complex markets today. DM if you would like a guide #tax #PPLI #advisory #STEP #IRS

𝐇𝐚𝐬 𝐭𝐡𝐞 𝐭𝐢𝐝𝐞 𝐭𝐮𝐫𝐧𝐞𝐝 𝐟𝐨𝐫 𝐇𝐊 𝐡𝐢𝐠𝐡-𝐭𝐞𝐜𝐡 𝐬𝐭𝐨𝐜𝐤𝐬?   This week has been a good week for the Hong Kong stock market, and in particular for its four most actively traded hi-tech shares, Tencent (700), Alibaba (9988), Meituan (3690) and Kwaishou (1024), with gains of 10-20% in market prices. The National Development and Reform Commission (NDRC) has broadly endorsed the sector’s role.   A mood of ‘bad news is good news’ prevails. Ant was fined almost US$1 billion by Chinese regulators but it is interpreted as good news – drawing a line under Ant’s woes and a signal that the crackdown on the tech sector is over. China’s figures for June suggest a close shave with deflation – good, a stimulus should be coming. Unemployment figures for young graduates are concerning – good, the private sector should be supported to find them jobs. A stream of visitors to Beijing seems designed to improve US/PRC relations.  Janet Yellen appeared more like a fairy godmother than an avenging angel in her trip to Beijing. Next up is the amiable John Kerry. Meanwhile, whatever the rhetoric, Nvidia and Apple made it clear that in economic terms US/PRC decoupling is ‘impossible’.   There should be more potential as Hong Kong hi-tech seems undervalued in relation to international peers. Some catch-up is overdue. However, Hong Kong listed hi-tech companies may be well advised to emphasise their contributions to more politically favoured sectors, such as AI, semi-conductors and robotics. Payment systems, social media and computer gaming, which still generate the bulk of their profits, may have to remain lower profile. #HongKongStockMarket #HighTechIndustry #Tencent #Alibaba #Meituan #Kwaishou #NDRC

Alibaba, Tencent’s $66 Billion Party Starts to Fade Technology leaders likely to report strongest growth in a year Investors remain wary in China’s post-crackdown environment China’s largest tech companies Alibaba Group Holding Ltd. and Tencent Holdings Ltd. have gained $66 billion in market value since May’s end, propelled by expectations of a gradual return to pre-crackdown growth and a litany of official promises to unshackle the private sector. Yet some investors warn the celebration may be premature. For the first time since 2021, China’s technology leaders head into an earnings season with what appears to be the wind at their backs. They’re set to report their strongest growth rates in over a year. #business #finance #financialservices