This is going to be a very short update. Life has been very busy lately, moving country and a new role at work. I expect to start writing more frequently again. I’m currently in Shanghai on business trip and the latest on the ground data point is that regulators are putting in place very strict capital controls. Most of the controls has been through as it is called “window guidance”, where they tell banks that they need to change their procedures for controls of capital flow. Not good and many call this turning back the clock 10 years in terms of capital opening, something that needs to watched closely. I don’t think this has got enough attention in media and markets take it a bit too calmly – but maybe it’s just me that is wrong.
Hong Kong stocks are lagging, perhaps because of the above mentioned reasons, but it feels rather like more short term worries over US Gov rates and new scares that the Chinese property market is wobbling. Even so I find the significant pullback in some stocks unwarranted. In particular Coslight, I will write a longer update shortly, but if anything the business case for Coslight is even stronger. I think the stock is easy to manipulate with fairly thin volumes and it is now oversold, I’m using the cash I have left to make it a high conviction position again. More portfolio changes will follow soon.
Just when I thought I was out.. ..they pull me back in. Like the character Silvio in Sopranos says, I say about inflation and interest rates. Just when we were giving up and starting to believe the low rates would be here forever, Trump pulls us back in. Two weeks since my last update and it is already a new world out there. I won’t go over the obvious around Trump’s win, but its clear the market has decided to take his promises for fiscal spending seriously. What is happening in the US Gov yields further out on the curve is very interesting. Suddenly we live in a world, where people are anticipating some inflation pick-up a few years out. The US 10Y Gov yields quickly dropped to 1.75 during the election night, setting a low at 1.75% intra-day and then reversing and now trading around 2.26% – that is a massive move!
This is something we equity investors have to be wary about, it changes the investment landscape and should if it continues create massive sector rotations. For example all the high dividend strategies that sounds amazing with 4-5% dividend yields, sounds less fantastic when the US 10Y Gov is back at 4% and at the same time those companies need to lower their dividends, because they are highly leveraged and their cost of funds just when through the roof. Everyone should go through their portfolios and look at if their companies have high debt levels as well as consider their business model in a higher interest rate environment, this could be the beginning of a bigger shift.
Rottneros – adding
So the Rottneros report came out, it was disappointing yes, below what I had estimated, but the company is still cheap and its a small company, so earnings will not be as smooth. With the SEK weaker than ever and pulp prices holding steady I choose to add here and make it a conviction position, by increasing another 2%.
Poor performance
For the ones that follow the portfolio performance graph in the Portfolio page has seen that it has under-performed quite significantly the last couple of weeks. I had a few hits, among them Ramirent that came with a weak report, really weak, strangely weak. Not really sure what to do here, I’m looking for a better exit level. But in general most of my holdings have been weaker than the index, it’s just been a shitty two weeks for my portfolio. High beta? Yes a bit, but also caught on the wrong side of the Trump-stock-rally – overweight Hong Kong stocks has for example not been great. But I stick to my guns, I’m sure I will come out OK on the other side.
As i mentioned in the previous post I have taken a position of 5% of my fund in Rottneros mainly because of the weakening SEK. Sitting on the beach (yes my life is hard) I was not in a position to write a full analysis, so here it is.
Rottneros at a glance:
MCAP: 1 234 million SEK
Shares Outstanding: 153.4 million
Largest Shareholder – Arctic Paper 51% of shares outstanding which in-turn is majority owned by Thomas Onstad.
P/E 7.5
P/B 1.13
Simple company to understand
The company run two pulp mills located in Rottneros and in Vallvik in northern and middle part of Sweden. Because it is a debt free small company, running two pulp mill plants it’s also easy to understand the drivers of profitability and risk. It’s cash flows depend on a few variables so I will try to map out the main components that determines the value of Rottneros business. The below picture describes the full production process Rottneros is involved in.
The Swedish Krona (SEK) is plummeting further after the Riksbanks latest communication of a lower for longer scenario. In a fairly short period of time the Krona has gone from fairly strong to weak, particurlary to the USD which strengthen against more or less everything. In a perfect world a stock denominated in SEK, with earnings in EUR/USD should correct its stockprice to reflect the now weaker SEK. But we do not live in a perfect world, and potential bargains could exist out there.
Winners on the weak SEK
A company which is a obvious winner on the weak SEK, has its costs in Sweden but sells all its products abroad. Good examples of such companies are Swedish pulp and paper companies. They usually source their timber/wood locally, use electricity from Sweden and has its labour costs in Sweden. Whereas the pulp is sold on the world market, with prices set in USD.
Most such companies are currently trading at high multiples at a point in time when pulp prices are at high historical levels, but i think i found an exception in the small cap lists in Sweden. The company is called Rottneros and has a somewhat troubled history ending in a rights issue in 2009. Since then they have shaped up considerably and the stock is in a nice uptrend and still trading at attractive multiples. Given the SEK plunge the operating margins are looking very nice indeed. On top of that the electricity cost is hedged, and they are rolling into lower and lower locked prices.
Risks are obviously if pulp prices on the world market plummet, I have no edge at all to predict those, but i can note that they are high from a long historic perspective.
Since Im sitting on the beach writing this i will do a more proper write up at a later time. As of close yesterday I have taken a position in Rottneros of 5% of my fund.
Ericsson
One word about Ericsson as well, the share price has continued to fall sharply and this is also a company benefiting from a weak SEK, as well as from an US investors perspective 44 SEK per share is a lot cheaper today than it was a few months ago. Im willing to continue my Value bet here and take another 2% of my fund to double up the position in Ericsson.
Little did I know how timely my recent analysis of Ericsson would become. It just ended up on the top of my “Value list” and because of that I decided to take a closer look (Value hunting – Ericsson). My conclusion was to buy in the 50-55 SEK range, and well, it entered and went below that in one single day. I won’t say I had any idea that this would happen, but what I can say is that I did mention the nasty downside risk Ericsson has showed in the past – and once again we experience it -20.21% on the day. The rumours of aggressive accounting must more or less be true, for this type of downturn in numbers.
Probability of bid went up
Before we had a fairly valued company, now it starts to look much more interesting to me. We will probably see lower dividends, perhaps back to the levels of 2009. But even so we still have a very healthy dividend yield of about 3.5% going forward. But to me the value is the patent portfolio and I believe Cisco gets more and more interested, the lower Ericsson falls. In my previous analysis I said that I don’t believe the majority owners would be interested to sell. On my latest flight to Asia I picked up a newspaper in the airplane which I took a photo of:
The article is saying that the pressure on the majority owners is increasing and there are more or less rumours that they consider selling the company. There is apparently a lot of discussions going on behind the scenes on what is the best way forward. The article continues that there is a clear resistance towards selling Ericsson, but all options are at this moment evaluated.
Reading todays articles in the Swedish press, the majority owners and the Wallenberg family particularly is heavily criticised for not taking action. The press more or less demands the Chairman (Leif Johansson – feature image in post headline) is also thrown out. So a lot is going on, and in these situations it is really painful to go in and buy.
How to value potential Cisco bid?
Let’s do a back of the envelope valuation, based on the Sum of the Parts valuation table I presented before.
SOTP
2017E EV (SEKm)
2017E EV/EBIT (x)
Per Share (SEK)
Networks excl Patents
48 350
8
15
Global Services
46 973
10
14
SS excl Patents
10 471
1
3
Patents
83 940
10
26
The idea is that Cisco is interested in the Patents portfolio and are willing to pay a good premium for that – without any deeper analysis they can pay a 40% premium on the patents parts of the business. The rest of the business is slaughter and valued at 60% of previous valuations (due to the deteriorating numbers).
Networks = 15 * 0.6 = 9 SEK
Global Services = 14 * 0.6 = 8.4 SEK
SS excl Patents = 3 * 0.6 = 1.8
Patents = 26 SEK per share * 1.4 = 36.4 SEK
Total = 55.6 SEK
But the probability of a bid is not 100%, let’s say it is 40%. Then the Patents portfolio is valued at 26 SEK + 40% * (36.4-26) = 30.16 SEK
And Total valuation is = 49.36 SEK. Which is inline with today’s valuation. I think the probability of a Cisco bid over the coming 1-2 years is in the 30-40% probability range and I don’t think the rest of the business should be valued as low as my back of the envelope calculations. I don’t find the price of Ericsson to be the bargain of a lifetime but interesting enough.
No brass balls
So since I’m not born with brass balls, I won’t take a large position here. I hold 12% of my portfolio in cash and I feel comfortable with taking a 2% position in Ericsson, with the option to increase my position to full size in case we see further share price deterioration towards the low 40 range, this is when the stock starts to become seriously interesting.
In the future I will move to quarterly performance reviews, so this is the last irregular update. The portfolio has done extremely well and I must say this much out-performance does not come without a certain amount of luck. I feel we are reaching the end of this long bull-market and we are probably moving into a more challenging investment climate over the coming years. Even so I still think there is enough dispersion in the market that it gives some comfort in attempting to pick stocks. The strength of the USD is concerning I think. I don’t see how the US stock market can be at it’s peak and the USD keep strengthening as well, at the same time other equity markets are far from peak levels. Something got to give.
Performance
The graph above shows The “GSP Portfolio” performance including all trading and dividends since the blog inception (no trading fees deducted).
Current Holdings
Previously held stocks
Notable Movers
+ Coslight Technologies
After tremendous results in it’s semi-annual report, the stock soared. I have been analyzing all the battery companies that are listed and I have been able to invest in. Out of all of those I placed my bets into two stocks, that were pure-play battery companies. One has with a lot of volatility, mostly gone sideways, but Coslight had the sales turnaround I was expecting, driven by China’s significant insentives for electric vehicles, both buses and cars. Nice to be right for once, after spending tremendous amount of research on the topic over a 1 year period. Now there is talks about a potential over-supply situation among the Chinese battery-makers, I’m somewhat worried about that, but more short-term than long-term. I see signs everywhere that the growth of Plug-in hybrids and all electric cars is just in its infancy. If this company keeps playing their cards right, this stock could go another 100% within the next 2 years. Previous write-up on Coslight.
+ Shanghai Fosun Pharma
This was an example where a lot of things together made me take the investment decision in this holding company. The chart looked like the stock was set for a leg up, I wanted a healthcare stock in my portfolio and the valuation started to look more and more compelling (SinoPharm holding >50% of Fosun Pharmas Market Value). Right after I bought the stock started surging, a quick 25% gained. Lucky yes, but at the same time it was strangely out of sync with SinoPharm. Now the stock is more fairly valued, although still not expensive. Since I have understood from Chinese friends that Shanghai Fosun’s management have a bit of a reputation, I might need to have some margin of safety in this one. I have another “Pharma” holding on my radar, if it looks more compelling I might switch this for something else. Fosun Pharma write-up
+ NetEase
This fantastic company is over-delivering for every report they release. But I can’t keep holding the stock at these valuations, so I sold all, at an average gain of over +50%. I’m hoping there will be a rebound, because this is probably still a great stock to hold over the long-term. NetEase full analysis
– MQ
Well, I thought I got this stock on the cheap, and I still think I did. But it got even cheaper. I’m surprised by how weak retail sales are in Sweden, given how well the economy is doing. This was a play on the Swedish consumer, and although I wasn’t dead wrong, I was not right either. Seems it’s sales through internet channels that are hurting retail all around the world and perhaps also in Sweden? Well I chose to move on since I don’t believe in the Swedish consumption over the coming 5-6 years anymore., even if it pains me to sell something that is still cheap.
– LG Chem
Again I thought I got in on a technically good level, where the graph looked like a move up was in the cards. And it was, but it became very short-lived, a month later the stock peaked and then took a serious turn downwards, now sitting -10% from my purchase price. But the stock falling doesn’t generally bother me much, I’m in for the long-run for their battery production (although it’s not a pure-play). But there was a reason for the stock falling, which was plans from LG to merge LG Chem with LG Life Science. I don’t know anything about LG Life Science, but what I do know is that I bought this for it’s future in battery making, not to own a conglomerate with a small part in battery-making (like Panasonic) – frustrating! So, right now it is wait and see, I’m not ready sell, especially when the stock is trading fairly cheap. On a more positive note the Chevy Bolt is coming out with great positive reviews from everywhere, just like the Tesla model S before the Tesla share surged with 300%. The Bolt is very much a LG product, with battery produced by Chem and the electronics inside is produced by LG Electronics. Looking at competitors it’s clear that LG is one step ahead of its competitors in battery technology (price per kWh). Short LG write-up
Short update on changes in portfolio. Im happy with the performance of Netease and chose to close the rest of my position on todays closing price. This trade has given me an average return of almost 50% in about six months time. Great company but current valuation has as much to live up to.
I have become more skeptical about MQ for various reasons, mainly due to online shopping which seems to eat into margins of all clothing companies in a way i didnt expect. So I take my loss here and sell the full position. Right now i feel comfortable sitting on some cash (lowering my beta) waiting for new good opportunties to arrise as well as allocalate to new investment ideas.
Since I first sat foot in Asia and started to meet more local Asians, I have been fascinated by how deeply ingrained gambling is in their culture. Sure we have all sorts of gambling in Europe and the US too, but what surprised me the most was how large sums of money the Asians were willing to part with for gambling (compared to their income). Someone with a monthly spending power (after costs) of 10 000 HKD could discuss with me that having a budget around 7-8000 for gambling over a weekend. That for me was unheard of except by more professional players.
Rise and fall of Macau
I guess nobody have been able to avoid the headlines from the Macau gaming sector and the mind-boggling turn-over figures and profits the companies were churning out, a few years back. Companies like Sands and Galaxy were the stars and for a short while Stanley Ho, the owner of Galaxy was the richest man in Asia. Well the Chinese leaders thought it went too far, and in their drive to rein in corruption, bribery and money laundering, it was suddenly not OK for the wealthiest Chinese to be seen in Macau, spending obscene amounts of money. This fairly small group of rich people, who stopped gambling, toppled the whole industry. On top of that the mainland stock market went from roaring bull to free-fall at the same time. Shares of HK listed Casino companies fell 60-70% from their peak levels and it all went very fast. Many investors who didn’t understand the dynamics of the sector must have been caught pretty bad in these companies. I talked to some US investors who obviously did not understand this deeply and jumped in just a few months before the peak. This is the first lesson in Chinese Casino gambling, a small group of VIP clients, can drive more revenue, than the whole mass market. But as they say, easy come, easy go.
Junket operators
The second lesson is understanding how the VIP segment of Chinese high-rollers are attracted through junkets. This is fairly shady business, although some junket operators are even listed on a stock exchange. What they do is providing a middle man between Casinos and VIPs, providing different “value adding services” (yes, I know what you are thinking of), arranging flights, pick-ups etc. For the interested reader here is a longer description: Junkets Factbox. But the most important service of a junker for VIPs is credit while gambling and the possibility to gamble for large amounts, and then settle potential debts back home in RMB in China. This is essential since the conversion of RMB to foreign currency is not freely available to mainland Chinese. This is then also a way of getting money out of China and/or money laundering. Casino and junket operators will probably not end up in ESG funds if we put it like that.
Russian Casino
Obviously there are other countries that wants to gain from the Asian’s willingness to gamble. Among them two that I studied, Cambodia and Russia. I spent the better part of a day updating myself about Nagacorp (3918 HK). Nagacorp run a casino in Phnom Penh, Cambodia. This is a company I know well, owned for a few years and followed since 2011 and I’m still interested in. But I’m waiting for an attractive entry point, which I think is in the 4-4.5 HKD range. I save that discussion for another time. Reading about Nagacorp I started to look deeper at their upcoming casino project in Russia. This then led me to another company, Summit Ascent Holding (102 HK) who have just opened a new casino in small scale in Vladivostok Russia. I found project and plans of the Russians to open this casino area very interesting. In fact it is somewhat similar to how Macau Cotai strip got developed. Or as Bloomberg asks, is Vladivostok the next Vegas (hardly but anyway interesting comments in the video): Putin’s Making a Big Bet on Building Vegas in Vladivostok
For research purposes I found this “boring” video more interesting, showing the plans for the casino resort area.
Summit Ascent Holding (102 HK)
Newly opened, small casino in Vladivostok Russia, yes, we are climbing out far on the risk ladder with this one. I have decided to take a small position (2% of my fund NAV) on today’s close in Summit Ascent Holding (SAH from now on). This won’t be a full analysis, but I will quickly try to work through why I invested. I needed to write such a long intro above, because it all ties together. Let’s start with the share-price.
The stock was hyped a lot a few years back, because the company is started by the son of Stanley Ho (richest man in Asia for a short while), who runs Galaxy, perhaps the most famous of the Macau casino giants. This is what it sounded like back then: Hong Kong Billionaire Lawrence Ho’s Summit Ascent Boosts Stake In Russian Casino. Well as we know, things usually take longer than investors have patience and the stock price fell sharply. Especially when the operations were up and running, and revenue was not showing any sharp increase. That changed dramatically with the latest semi-annual report, when the stock jumped 40% within a week.
Targeting Chinese
Although located in Russia, the obvious customer targets are Chinese. Gambling is banned in China and therefor Macau’s success. But it is far to Macau from northern China – and hence we have Vladivostok in a much closer distance. This would also be the case for Japanese gamblers, although initially it is probably not the operators main targets. Also perhaps the city is able to offer another type of lifestyle more long term, compared to overcrowded Macau, as can be seen in the video about the area.
Quick revenue increase last two months
This table shows the VIP turnover and the revenue it generates, as you see a sharp increase for the last two months.
This revenue increase does not show in the semi-annual figures yet (since it ends in June), but is only visible to the one that actually reads the full report. Here is the explanation:
“Our rolling chip business, targeting the Asian VIP market, has seen phenomenal month-on-month growth, vindicating our investment thesis that the Primorsky Krai IEZ is an ideal location to capture the significantly underserved gaming demand in Northeast Asia. Our strategy has been to start our rolling chip business using only casual junkets initially without fixed-room operators. This strategy is deemed necessary in order to preserve the bargaining power of the casino vis-à-vis fixed-room operators. Thus far, our strategy has been proven to be correct. This is evidenced by the fact that rolling chip turnover has been increasing on a month-on-month basis since the commencement of business in November last year and dramatically increased following the start of two fixed-room operators in late June 2016”
Investment case
The stock has been hammered and although a breakthrough has been shown in the figures, the market has not yet hyped the stock as before. Calculating on just current run-rate as of August for the Casino business, we are looking at a company valued around P/E 15-20.
I actually believe in this resort area as a whole, as long as Putin stands behind it, and it becomes a VISA free region, low tax and everything that has been promised. Build it and they will come!
The Ho family surely have all the right junket contacts, to bring in and focus on VIP players makes a lot of sense. The mass market will come when it is a big resort area with other activities. Also since it’s still somewhat no-no for Chinese VIPs to gamble in Macua, maybe they feel more comfortable in a very private setting in Russia with other high-rollers. I think we can see further growth from the numbers in the table above
The company has another project phase in their plans, although we do not know the success of the whole resort area or any build outs, it has at least some optionality value.
Obviously very high risk. But in my view worth a 2% position, since this can easily double or triple within the next year(s).
In a number of posts (Last section here, and here) I have concluded a desire to tilt my portfolio more towards Value. Particular in Europe where Value stocks have been hammered. So a few months ago I started by asking myself, what stocks in Europe are actually considered Value? At the time I had access to an advanced Value ranking which blends simple metrics like Book to Price with more advanced ones. I ran the Stoxx 600 members through the scoring and the top 5 stocks in that ranking were:
Ericsson
Lufthansa
Marks & Spencer
Casino Guichard Perrachon
Sanofi
They say Value should feel hard to invest in.. ..well they were right, that is not a list of stocks I find particularly attractive. In the future I intend to build a model which rank stocks on a blend of my own Value-metrics, but that will take some time to get in place. So I will use the advanced Value model (which I trust) and start with the list above. I don’t think I will analyse them all, but Ericsson looks interesting to me, so at least I start there.
Ericsson introduction
Ericsson is a huge company with 110 000 employees spread out over the world. Ericsson was one of the companies that was hyped during the dot-com bubble and thereafter crashed terribly and was saved thanks to strong owners (Investor and Industrivärlden) through a huge rights issue in 2002. A lot has happened since then (business model changed from phones to networks) but the company has failed to create meaningful shareholder value over the past 15 years:
As I want to merge Value investing with Momentum, this price graph is not ideal, given the sharp negative trend Ericsson is in, but let’s look further anyway.
Business Model
It’s current business model is fairly simple to understand – they build mobile networks and everything that comes with it. The company divides its business into three parts: 1. Networks, 2. Global Services and 3. Support Solutions. Below follows more details on the units.
My holding Coslight Technology (1043 HK – listed in Hong Kong), a batter producer in China did what is commonly called a turn-around by presenting very strong first half 2016 results. They actually issued an pre-announcement that the results would be significantly better, but the market did not react much on the news. Anyhow the results for H1 2016 was an EPS of about 0.36 HKD per share and at the time the stock traded at about 3.8 HKD. Multiplying the result with 2 gives a forward P/E of about 5, so I think you can understand why the stock soared 30% the next day. Since then the stock has continued to trade very strongly and in a wobbly market closed today at 6.7 HKD up +76% since the result announcements. Since we bought our position in the stock at 2.87 HKD we are now up +133% and our first stock price doubling since the blog started! This also means that the holding is close to my holding guidelines of max 15% position size. I am therefore forced to reduce my position size somewhat, the question is how much and does the stock still have room for more upside?
Analysis of Coslight
The outstanding results were partly thanks to subsidies by the Chinese government on EVs. And also that the subsidies where design in such a way that it favored EVs who bought batteries produced in China. I bought this stock because it is one of the most pure play Lithium battery producers that is listed anywhere in the world. And even this company is by heritage involved in production of lead acid batteries (which they are currently losing money on) and also doing something as bizarre as mobile games for the Chinese markets. It happens so that the mobile gaming unit is actually very profitable and not at all something to laugh away, it has very high margins and I see it as a free option for launching a new hit game (you never know).
A move from lead acid to Lithium battery production
The figures in the Semi-annual reports tell a story. The story told is that lead acid battery sales used to be a terrific product, with healthy margins. Coslight made great money on their products and the stock traded in the 10 HKD range in its glory days. Then something must have happened in the industry, because margins deteriorated to the point were Coslight was losing money on its lead acid battery business. At the same the shift started towards Lithium battery production, which has similar healthy margins as the lead acid batteries used to have.
As the graph above shows, net and gross profit margins were healthy back in 2007-2009 and then slumped sharply. Lastly we can see a shift in the trend, where the latest report which created the surge in share price, indicates that the companies sales are back in the healthy area of gross and net profit margin. The reasons for this is because Lithium battery sales has totally taken over and lead acid battery sales has been scaled down significantly. See graph below.
The red line shows how Lithium battery sales has gone from around 30% of total sales in 2012 to around 90% of sales in the last years (although with some volatility). And the blue line also with some significantly volatility shows that lithium battery sales is profitable business. So now we have a transformed company, which stopped producing loss making lead acid batteries and focus on profitable lithium ion batteries. They recently also announced they are going to double production volume (with a 400m USD investment), meaning if they can keep margins at these levels, they will be able to generate a forward EPS of around 1 HKD per share, justifying a price of Coslight of around 10 HKD. The big if is if Lithium battery margins can keep at these levels. I would argue that there is a lot in the pipeline that suggests it will. The demand for batteries is huge among Chinese EV makers and listening to Coslight themselves it sounds like this:
“Power Batteries benefited from Chinese government policies on new energy, the sales volume of China’s new energy vehicles surged to 170,000 in the first half of 2016. The demand for our power batteries grew dramatically for the corresponding period. We have delivered 11,127 sets (2015: 3,061 sets) of all types of electric vehicles batteries, representing an increase of 264% over same period last year. We continued to collaborate with domestic and foreign auto makers to provide battery system solutions for electric vehicles. Our customers include wellknown brands of domestic new energy vehicles manufacturers. Our products include lithium ferrite phosphate batteries and ternary power batteries which are applicable to different types of electric vehicles, including buses, commercial vehicles and sedans. We expect the amount for delivery will rise substantially for the whole year.”
Other areas
Coslight produces batteries for many purposes, it’s not just EVs that are interesting, but also mobiles, laptops, drones and other wearable devices. One big are of sales for Coslight is laptops. I’m impressed with how advanced Coslights battery technology is for the latest generation of laptops. If you haven’t noticed all Laptop brands are coming out with new ultra slim, around 1 cm thick laptops. And I after some serious digging found out that the HP Spectre laptop comes with a Coslight battery. I find this very impressive, the laptop has good battery life although it is so slim. This gives me confidence that Coslight knows what they are doing and are up fighting with the best battery-producers.
Conclusion Coslight
I will reduce my position because I want to follow my investment guidelines, but only by 25%, I want to keep this as a large position in my portfolio, since this is somewhat of a breakthrough and turn-around in the company. I will hold on to my stocks at least until I see prices around 10 HKD per share, somewhat aggressive to expect the stock surge to continue short-term, but reasonable in the next 1-2 years I think.
NetEase Slicing position
I already reduced my position once in this stock, now I again sell half my position, since the stocks keeps defying gravity. I’m super happy with the return I got in this stock, but it reached my target price and I see better opportunities elsewhere at these valuation levels.
