August 24th, 2021 | 10:46 CEST
Triumph Gold, Tencent, Baidu - China is making a big push!
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"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
The rally continues
Meanwhile, a round of revaluations is raging in the markets. Most of the companies' half-year figures were positive, and the indices thus marked new highs even in the otherwise volatile summer. However, those that fail to meet expectations often fall low. The main topic remains the increasing inflation via the commodity side; the US Federal Reserve FED already announced the first tapering steps. It led to a short kink in the stock indices, which was completely leveled again by Friday. Thus, equities remain favored, seemingly without alternatives.
Gold experienced a flash crash to USD 1,670 at the beginning of August but quickly recovered from its correction levels to currently USD 1,780. Bitcoin also showed muscle again after its bottom reversal and chased towards USD 50,000. As a diversification to equities and bonds, gold and bitcoin are equally interesting, but which will perform better now?
Triumph Gold bets on artificial intelligence
If you want to bet on gold, look for companies that lost some ground in the last gold correction. With Triumph Gold, you will find what you are looking for under this approach, as the share price has recently fallen by 60%. However, the latest resource determination using artificial intelligence is well on its way. Triumph Gold Corp. is a Canadian-based junior resource company engaged in property exploration in the Yukon Territory. Its flagship project hosts three NI 43-101 mineral occurrences and covers an extensive section of the Big Creek fault zone, a regional structure directly associated with epithermal gold and silver mineralization and gold-bearing porphyry copper mineralization.
Triumph Gold Corp. is now using artificial intelligence in its exploration efforts. The gold-copper-silver-molybdenum mineralization within the Freegold Mountain project is currently being investigated. The Company has contracted Minerva Intelligence Inc., whose innovative DRIVER software is used with K-Means Cluster Analysis to evaluate drill data from multiple elements. The geochemical data evaluated in this way defined new vectors of gold and copper mineralization in the Nucleus deposit. DRIVER has identified undervalued areas at the northeast and south junctions of the volcanic vent in the Revenue deposit. Both discoveries represent drill-ready exploration targets and expand the known resource. If the gold price now also picks up, Triumph is ideally positioned with its strong investors, making the stock extremely interesting for European investors too.
Triumph shares stood at CAD 0.35 a year ago and can now be bought at CAD 0.15 due to the gold price correction. The market capitalization is currently only about CAD 20 million. One of the principal shareholders is Newmont Corporation with 12.8%, Zijin Mining Fund owns another 9.8%. At the current level, speculative entry is a good idea.
China tightens control of its technology giants
Whether and how the price of gold or cryptocurrencies will continue depends largely on China. After all, China is a major gold producer, and it intervenes heavily in the opaque crypto world. To further position the digital yuan, Beijing continues to ironically pull through the regulatory crusade against Bitcoin and Co. In addition, the technology giants are being targeted because their digitalization approaches go too far for the regulators, especially in the areas of education, finance and data protection. Only recently, the Chinese digital regulator took action against Uber competitor DiDi Global, and Alibaba founder Jack Ma also felt the power of the regulators last year when the IPO of the Company's subsidiary Ant Group was canceled at short notice.
Tencent - Good figures despite regulatory intervention
Technology giant Tencent posted Q2 revenue growth of 20% to 138.26 billion yuan and net profit of 42.6 billion yuan. That represents a 29% year-on-year growth and is higher than analysts' forecast of 40.5 billion yuan. While this means the Company's performance was largely in line with analysts' forecast, there are growing concerns about regulatory risk. As China steps up its antitrust and information security efforts, investors worry that Tencent's leading position in key markets could be weakened.
As the world's largest gaming company, Tencent's gaming business has been in the spotlight recently after an Aug. 3 newspaper article compared online video games to "electronic drugs." Cathie Wood, star investor and founder of investment firm ARK Invest, takes a critical view of what is happening in the Middle Kingdom, as she explained in a recent webinar hosted by her Company. She recently cut Chinese technology stocks very sharply.
Baidu - The first robotaxi is here
China's largest search engine, Baidu, is continuing to grow its business outside of the Internet. At its World 2021 corporate event, Baidu unveiled a new robotaxi. It has been working on the Apollo intelligent driving program for years now, aiming to pave the way for the era of autonomous driving.
According to Robin Li, co-founder and CEO of Baidu, the robocar will be a vehicle and the driver, the secretary, and a learning assistant at the same time. Equipped with voice and face recognition and AI technology, the robot car can analyze the internal and external environment and make predictive suggestions, as well as we humans can.
The regulatory fury of the Chinese leadership will cause some more problems for the tech giants. Shares have been falling for 6 months, Tencent and Baidu have already more than halved. Gold should now have completed its summer correction, drawing the attention of investors back to well-positioned explorers like Triumph Gold.
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