• Ernie Diaz

Hit or Miss List?

The consequences from 3 generations of Chinese single children brought up under the "second place is as bad as last" principle: Didi spikes to $80b in its IPO, but sighs that it missed $100b.

Next week EV maker Xpeng will list on the HK market and float HKD$14b, the 5th largest offering this year...which is 8% less than the company had hoped.

The attitude affects investors, of course, who know they must make long-term investments based on the same kind of thinking, but can't help looking for the next big thing. So while Xpeng gains more ground, and Tesla loses more of its China turf (285k auto recall - ouch), amidst government plans to phase out all "gas-burning" cars by 2035, investors fret about Xpeng's profitability, and performance in the ace of inflation.

"These are fair concerns of course," says Jimmie Jeremejev, "and there will be plenty of rivals coming for as much market share in China's booming EV market as possible. But from a fundamental, practical perspective, Xpeng is very solid. Investors looking for smart China exposure could do a lot worse than to take positions in a basket of EV companies, including Xpeng, Nio, BYD, and Geely among them."

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