30. August 2021 | 13:22 CET
BYD, AdTiger, Xpeng - Way clear for further share price gains
As expected, the highly anticipated symposium in Jackson Hole turned into a non-event. Although FED Chairman Jerome Powell is concerned about inflation at current levels, he considers the price increases to be a temporary phenomenon that does not require any changes in key interest rates. Nor was a specific date given for scaling back bond purchases. The ultra-loose monetary policy is thus preparing the ground for further price rises in the asset classes of equities, real estate and precious metals.
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ISIN: BYD CO. LTD H YC 1 | CNE100000296 , ADTIGER CORP.LTD. | KYG009701064 , XPeng Inc ADR | US98422D1054
AdTiger - Fast-growing Asian pearl
Because DAX, Dow Jones & Co are currently running from high to high, it is worth looking to Asia for new investments, especially in the technology segment. Giants such as Alibaba, Tencent and Baidu have been suffering for months from the consequences of the wave of regulations with which China's government is challenging domestic tech companies.
One should also take a closer look at the stock of AdTiger. It is listed on the Hong Kong Exchange as well as in Frankfurt. AdTiger, with a market capitalization of nearly EUR 70 million, is a leader in the fast-growing digital marketing market, which is expected to grow at a compound annual growth rate of 26.4% through 2025, according to a Frost & Sullivan study. In 2020, AdTiger was named the fastest-growing digital marketing company of the year at the 20th IAI International Advertising Awards.
Its primary clientele are Chinese advertisers who want to access potential customers through the world's largest social media platforms such as Facebook, Google, Snapchat, Twitter, and Yahoo, as well as major Chinese media platforms such as ByteDance, Kuaishou, and iFeng.com, in order to optimize their ad placements and thus gain users worldwide through advertising on these platforms. Using its proprietary AdTensor platform, which leverages algorithms and artificial intelligence, ads are automatically optimized and managed in real-time to deliver the highest conversion potential and maximize monetization for media providers. AdTensor connects to media publishers' platforms, collecting user data through an API connection that leverages unidentifiable behavioral patterns for further analysis.
Expansion is to be pushed in ASEAN countries such as Indonesia, Singapore and Vietnam, and especially in China, which is why a subsidiary has been established in the Jimo Economic Development Zone in Shandong Province with AdTiger Technology as its headquarters. The trade conflict between China and the USA and the decline in advertising in India, among other factors, shaped the Group's figures for the first half of the year. Although sales rose by 16.7%, profits fell by around 41%. However, due to geographic repositioning and strategic collaborations and incubations on several apps, this dip is said to have been a one-off event.
BYD - Shortage weighs
The Chinese electric carmaker BYD also had to cope with a sharp drop in profits in the second quarter. The Company, backed by Warren Buffett, suffered like the entire industry from the shortage of semiconductors. In addition, the increase in lithium, an essential raw material for batteries, put pressure on profit margins. The bottom line was a 30% drop in profits to around EUR 150 million, while sales climbed 53.6%.
As the figures did not cross the ticker until after the market closed, BYD shares are likely to open well in the red.
XPeng - Growth bought at a high price
Significant sales growth with a widening of the loss, this is how the figures for the second quarter at electric car producer XPeng can be summarized. Sales climbed 537% year-on-year to EUR 493 million, with 17,398 cars delivered in the past quarter. However, along with the revenues, the loss also grew to almost EUR 160 million. The gross margin increased by 11.9% in the period. Up to 22,500 units are to be delivered in the third quarter.
From a chart perspective, there is currently no reason to buy the stock. The share price should not fall below the level of USD 37.50; otherwise, there is a risk of a relapse into the EUR 30 range.
By continuing their ultra-loose monetary policy, the central banks are opening the door to further price increases on the stock market. In particular, the Asian stock markets offer anti-cyclical entry opportunities due to the correction. While caution is advised for BYD and XPeng in the short term, investors should keep a close eye on the digital Company AdTiger.