Exposing the Charade: China’s Economic Rebound Narrative is Not What it Seems.

Ruchir Sharma, chair of Rockefeller International, argues in the Financial Times that the narrative of China’s economic rebound is not supported by economic realities. He points to several indicators of underlying weakness, such as corporate revenue growth of only 1.5% in the first quarter, imports dropping 8% in April, and credit growth last month being half of forecasts. Sharma explains that since 2008, China’s economic model has been driven by government stimulus and rising debt, which has now run out of steam. He warns that Western observers are too optimistic about China’s rebound narrative, which could lead to investors losing hundreds of billions of dollars. He concludes that it is time to expose this charade before the fallout gets worse. This list explores companies that are likely to be impacted by economic weakness in China.

This list has performed 2.78% over the past year. By comparison, S&P/NZX 50 Index is 6.91% over the same period. The beta of this list, which is a measure of volatility, is Moderately Low at 0.91. List Beta is calculated using an equally weighted average beta of the securities within this list. This list includes 40.00% of Technology stocks, 40.00% of Consumer Cyclicals stocks, 10.00% of Energy stocks, 10.00% of Financials stocks.

List performance is calculated using an equal-weight methodology. This list is generated by scanning the web and using our algorithms to surface potentially relevant securities to the topic. The list is intended to be educational and includes securities that may be suitable for a watchlist. It is not intended for investment or trading purposes. Microsoft does not recommend using the data and information provided as the basis for making any investment decision.

Alibaba Group Holding Limited

BABA. Alibaba Group Holding Ltd provides technology infrastructure and marketing platforms. The Company operates through seven segments. China Commerce segment includes China retail commerce businesses such as Taobao, Tmall and Freshippo, among others, and wholesale business. International Commerce segment includes international retail and wholesale commerce businesses such as Lazada and AliExpress. Local Consumer Services segment includes location-based businesses such as Ele.me, Amap, Fliggy and others. Cainiao segment includes domestic and international one-stop-shop logistics services and supply chain management solutions. Cloud segment provides public and hybrid cloud services like Alibaba Cloud and DingTalk for domestic and foreign enterprises. Digital Media and Entertainment segment includes Youku, Quark and Alibaba Pictures, other content and distribution platforms and online games business. Innovation Initiatives and Others segment include Damo Academy, Tmall Genie and others.

Alibaba Group Holding Ltd. is -4.14% over the past month and -13.32% over the past year, underperforming the S&P/NZX 50 Index by -3.40% over the past month and -20.23% over the past year.

NIO INC.

NIO. NIO Inc is a China-based holding company principally engaged in the research, development and manufacturing of premium smart electric vehicles. The Company is mainly engaged in the design, development, manufacture and sales of high-end smart electric vehicles. The Company’s products mainly include ES8, ES6, EC6 and ET7. The Company develops battery swapping technologies and autonomous driving technologies. Its electric vehicles apply NAD (NIO Autonomous Driving) technology, including super computing platform NIO Adam and super sensing system NIO Aquila. The Company is also engaged in the provision of charging piles, vehicle internet connection services and extended lifetime warranties. The Company mainly conducts its businesses in the domestic market.

NIO Inc. is -3.39% over the past month and -53.53% over the past year, underperforming the S&P/NZX 50 Index by -2.65% over the past month and -60.44% over the past year.

JD.COM, INC.

JD. JD.com Inc is a holding company mainly engaged in e-commerce business. The Company operates two segments. JD Retail segment consists of online retail, online marketplace and marketing services in China. The Company offers electronics products, home appliances and other general merchandise categories. The Company has its own online platform, which third-party merchants offer products on it. The Company provides marketing and display advertising services to third-party merchants, suppliers and other business partners on its website channels. New Businesses segment includes logistics services provided to third parties, overseas business, technology initiatives, as well as asset management services to logistics property investors and sale of development properties. It offers comprehensive supply chain solutions to third parties through JD Logistics, including warehousing, transportation, delivery and after-sales service. The Company mainly conducts its businesses in the China market.

JD.Com Inc. is -4.75% over the past month and -38.34% over the past year, underperforming the S&P/NZX 50 Index by -4.01% over the past month and -45.25% over the past year.

NETEASE, INC.

NTES. NetEase Inc is a China-based technology company. The Company operates through four business segments. The Online Game Service segment is engaged in developing and operating online game services that cover mobile games and personal computer (PC) games. The games include Westward Journey, Onmyoji series and others. The Youdao segment provides intelligent learning services. Its products and services include Online Courses, Youdao Dictionary, Youdao Dictionary Pen, Youdao Listening Treasure, Youdao Smart Learning Lamp, Youdao Translator King, Youdao Super Dictionary and others. The Cloud Music segment provides online music services and social entertainment services. Products offered by the Innovation and Others segment include Yanxuan, NetEase Live, advertising services, high-end email and other value-added services. The Company mainly operates its businesses in the domestic and overseas markets.

NetEase Inc. is +1.11% over the past month and -13.93% over the past year, outperforming the S&P/NZX 50 Index by +1.85% over the past month and -20.85% over the past year.

Daqo New Energy Corp.

DQ. Daqo New Energy Corp. is a polysilicon manufacturer. The Company utilizes the chemical vapor deposition process, or the modified Siemens process, to produce polysilicon. The Company’s segments include Polysilicon and Wafer. The Company manufactures and sells polysilicon to photovoltaic product manufacturers, whereby the polysilicon is processed into ingots, wafers, cells and modules for solar power solutions. The Company offers ready-to-use polysilicon, packaged to meet crucible stacking, pulling and solidification needs. The Company offers wafers through its downstream photovoltaic product manufacturing business. The Company also provides wafer original equipment manufacturer (OEM) service to external customers through tolling agreements by processing polysilicon to produce ingot and wafer. Its annual capacity for polysilicon is approximately 12,150 metric tons (MT) in Xinjiang. The Company’s wafer manufacturing annual capacity is approximately 90 million pieces.

Daqo New Energy Corp. is -9.78% over the past month and -21.44% over the past year, underperforming the S&P/NZX 50 Index by -9.04% over the past month and -28.35% over the past year.