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August 5th, 2021 | 11:26 CEST

NIO, AdTiger, Alibaba - Opportunity China

  • Investments
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To ensure data security, cross-border data flow and management of confidential information of Chinese companies whose shares are traded abroad, tech companies, in particular, came into the focus of Chinese regulators. A sell-off followed the uncertainty in related stocks. Companies such as Baidu, Tencent or Alibaba lost disproportionately and offer attractive long-term entry opportunities at the corrected level.

time to read: 3 minutes | Author: Stefan Feulner
ISIN: NIO INC.A S.ADR DL-_00025 | US62914V1061 , ADTIGER CORP.LTD. | KYG009701064 , ALIBABA GR.HLDG SP.ADR 8 | US01609W1027

Table of contents:

    AdTiger - In the slipstream of the big players

    In contrast to the big players in the Chinese tech market, AdTiger, a leading company in digital marketing, is still relatively unknown. Yet, the growth rates in the field of performance marketing are enormous. According to a study by Frost & Sullivan, growth rates will be around 26.4% by 2025. With Big Data and artificial intelligence algorithms at the core of its AdTensor platform, AdTiger leverages the leading Internet media platforms to access the world's active Internet users. It provides global digital marketing solutions for companies to leverage online audiences to drive sales and marketing, create brand awareness, and thereby build a large customer base.

    Chinese corporations make up a large portion of AdTiger's primary customers. Many of these customers are among the top 50 in China across industries, such as Sina, Futu, Netease, and Baidu. In addition, there are long-term partnerships with the largest global platforms. AdTiger is Google's leading advertising agency in China and has been one of Facebook's export partners for 8 years. In addition, the China-based holding Company cooperated closely with TikTok and Bigo and was awarded as "Lens Creative Partner" of Snapchat.

    Last year showed that AdTiger could adapt to rapidly changing circumstances. At the time of its initial listing on the stock exchange in July 2020, India was the largest overseas market for advertising for the Company. Due to Covid-19 and the trade disputes between China and the United States, the Indian market was hit hard. The Company decided to shift to the Chinese advertising market in the fourth quarter of 2020 and rapidly expanded the advertising markets in Southeast Asia and the Middle East. As a result, only 3% of total revenue was generated in India in the first quarter of the current year. Despite the collapse of the Indian market, overall revenues increased by 70% compared to the same quarter of the previous year.

    With the trade conflict between China and the US, AdTiger is also increasing its focus on its TikTok and WeChat video services and growing ASEAN countries such as Indonesia, Singapore, and Vietnam. The China-based holding Company wants to grow through strategic collaborations and incubations on several apps. To that end, it has set up an investment fund in Qingdao to work with the industry's leading private equity funds, giving it access to the most promising players.

    AdTiger is setting a tremendous pace of growth. The Company's stock market value, traded in Frankfurt and Hong Kong, is EUR 60.0 million. An exciting Company with massive potential in a rapidly growing market.

    Alibaba - Slowed growth

    Since November of last year, tech giant Alibaba has not been able to get out of the headlines. At that time, the share price stood at USD 271, the world's largest IPO of Ant Group, subsidiary and financial arm, was to go through. That was called off shortly before the initial listing due to pressure from the country's regulatory authorities. It was then followed by weeks of speculation surrounding the disappearance of Alibaba founder Jack Ma. Around half a year later, the tech company lost about 40% of its value and offered an attractive long-term entry opportunity despite the uncertainties at the current level.

    The Company's leadership team took a similar view and announced the increase of its share buyback program from USD 10 billion to USD 15 billion, the largest program in Alibaba's history. Earlier, the Company reported a 34% increase in revenue for the second quarter, amounting to 205.74 billion Chinese yuan (RMB). Although the EBITDA margin was an enormous 2%, the strong growth rate of 64% compared to the previous quarter could not be repeated. Thus, the revenue expectations of analysts were missed. In terms of earnings per ADS, the Chinese Company was above the consensus of RMB 14.45 at RMB 16.6.

    NIO - Strong figures continue

    The chart-technical situation looks better with the Chinese automaker NIO. Thus, overcoming the mark of USD 46.80 offered short-term trading potential up to the area of USD 55. The situation is supported with further high sales figures for the month of July. Compared to the same month last year, 7,931 vehicles were delivered, a healthy increase of 124.5%. Deliveries included 1,702 ES8s, the brand's 7-seat electric SUV flagship, 3,669 ES6s, the midsize SUV, and 2,560 EC6s, as NIO calls its SUV coupe. On Aug. 11, the electric carmaker will also release its second-quarter figures.

    With the crash in the stock market due to the regulatory fury of the authorities, Chinese tech companies offer exciting entry opportunities due to the lower level. Besides NIO and Alibaba, China-based AdTiger also provides high growth potential.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

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    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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