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May 17th, 2022 | 11:56 CEST

With a focus on Asia: Well positioned with Hong Lai Huat, BYD & Alibaba shares

  • Asia
  • RealEstate
  • Investments
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In volatile stock market times, investors win with a smartly positioned portfolio. That includes tangible assets such as real estate, renewable energy in the form of electric cars as the engine of the future, and generally looking to the Asian market for trading platforms such as Alibaba, the biggest top dog alongside Amazon. In countries like Cambodia, with an inflation rate of 2-3%, the economy is booming. Real estate companies like Hong Lai Huat are also focusing on acquiring agricultural land. We look at which stable value assets are optimal to invest in during times of Corona.

time to read: 5 minutes | Author: Juliane Zielonka

Table of contents:

    Fan Xian Yong, CEO, The Place Holdings
    "[...] We recognized that there is a lack of business models that combine innovative business concepts, such as "new retail" solutions and omni-channel strategies, with conventional business segments. [...]" Fan Xian Yong, CEO, The Place Holdings

    Full interview


    Hong Lai Huat - Real estate opportunity in the ASEAN country of Cambodia

    Hong Lai Huat Group Limited (WKN: A2JL8Q) is a renowned real estate and property development company with a 31-year track record. The Company focuses on residential, commercial and industrial property development in Singapore and Cambodia. Cambodia is located on the northeast shore of the Gulf of Thailand. It borders Thailand to the west and northwest, Laos to the north, and Vietnam to the east and southeast and is one of ten countries in the ASEAN alliance. The Southeast Asian Alliance is committed to the peace, trade and economic advancement of its member states.

    Cambodia is one of the fastest-growing economies in Southeast Asia. With an average GDP growth of 7% year-on-year (2019) and a population of 16.2 million, it is becoming a popular business location. Cambodia enjoys strong foreign direct investment of USD 3.9 billion (2019) and has USD-only exchange rate pegs. Inflation is also stable at 2% to 3%.

    Citizens in Germany can only dream of this so far, with an inflation rate of 7.9% rampant here. Good to know: The Hong Lai Huat Group's agricultural and farming business focuses on the cultivation of fresh cassava and the production of native tapioca starch. In Asia, tapioca is a primary ingredient for sauces and soups. So the Company is well-positioned in its portfolio.

    Investing in tangible assets through a listed real estate company like Hong Lai Huat may be worthwhile. The Singapore-based company has a market cap of EUR 32.8 million, shares outstanding are currently 517,844,114, and the float is 40%. For those who want to take a closer look, Dylan Ong, Group General Manager and CEO of Hong Lai Huat Group Ltd., will be available to answer questions from potential investors on May 19, 2022, at 10:40 CET. Seats for the digital investor conference are limited. Click here to register.

    Alibaba - High growth potential in the cloud

    Analysts at JPMorgan Chase give tech stocks like Alibaba (WKN:A117ME) the green light and recommend buying this stock. However, especially in countries like China, uncertainties remain regarding the national COVID-19 strategy.

    The Corona pandemic is not over yet; although it feels that way with summer temperatures, any sigh of relief is also deceptive in the markets. Uncertainties in logistics and supply chains remain, and these upheavals heavily impact the retail business. Only cloud efforts can guarantee further growth at the moment. Alibaba is increasingly investing in the expansion of cloud solutions - and with success. Last year, the cloud business grew by 50% YOY and by another 20% in the last quarter. According to analysts, the Chinese cloud market is expected to grow by about 91.3% from 2020 to 2023. For Alibaba, that means a lot of untapped potential to monetize.

    Anyone with an inkling of the Chinese business mentality and its strategic planning over decades should take their time to consider a potential long position. After all, founder Jack Ma's vision is to build the future commerce infrastructure with Alibaba. In his vision, Alibaba will become a place to live and work for at least 102 years. On May 26, the Company will report its numbers from the March 2022 quarter and for the full fiscal year 2022. Investors can register for the webcast here.

    BYD - Strengthened by land-owned utility chains

    From real estate to retail to road and rail, Chinese transportation company BYD (WKN:A0M4W9) is defying the crisis. BYD said it sold 105,475 BYD plug-in cars in China in April 2022. That is 321% more than the previous year and a new company record. Unlike domestic automakers such as VW and Daimler, BYD has avoided major supply chain disruptions.

    In April, BYD officially announced it would cease production of internal combustion engines and focus 100% of its automotive division on Battery Electric Vehicles (BEVs) and hybrids. The fast-growing supply of new hybrids is another strategic advantage over Chinese competitors. In addition, China is a country with large deposits of mineral resources and associated production facilities for the automotive industry. Supply chains can thus be carefully maintained. However, the prices of the raw materials lithium, nickel and cobalt for battery production have risen dramatically: At the beginning of 2022, the price of lithium carbonate was 266,000 yuan/ton (39,580 USD/ton), and in May, the price rose to 466,000 yuan (69,340 USD/ton). That will somewhat reduce BYD's expected profits.

    In addition, the automaker is getting into trouble with local authorities. BYD had to curb production at one of its largest plants after authorities launched an investigation to determine whether air pollution from the factory was harming residents. The plant, located in Changsha in central China's Hunan province, has faced numerous protests from residents in recent days. The protesters claim that children have nosebleeds due to pollution caused by the plant. The plant has to stop production for the time being until the authorities get to the bottom of the matter. It seems BYD has to make improvements to its ESG guidelines. Otherwise, the people will put the brakes on the automaker.

    Asia remains an exciting investment candidate. In countries like Cambodia, inflation is 2 to 3%, bringing investment in tangible assets into focus, such as through Hong Lai Huat, a company listed on the German Stock Exchange. The group is well positioned with a well-stocked portfolio of commercial, residential and agricultural properties. CEO Dylan Ong will be on hand to answer questions via Zoom live at the International Investment Forum on May 19 at 10:40 CET. As one of the largest e-commerce providers, Alibaba has to cut back on sales figures under its own country's covid measures; results will be available on May 26. Only the cloud seems to continue to be a high-flyer. BYD as a pioneer in the electric vehicle industry has fewer problems in maintaining its supply chains. Still, on the other hand, production does not seem to be fully ESG compliant. One of the most important plants is at a standstill until it is clarified whether the production emissions are causing adverse health symptoms for local residents. BYD has a broad international footprint, both on the road and rail.

    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") currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a "Transaction"). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
    In this respect, there is a concrete conflict of interest in the reporting on the companies.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
    For this reason, there is also a concrete conflict of interest.
    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Juliane Zielonka

    Born in Bielefeld, she studied German, English and psychology. The emergence of the Internet in the early '90s led her from university to training in graphic design and marketing communications. After years of agency work in corporate branding, she switched to publishing and learned her editorial craft at Hubert Burda Media.

    About the author

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