Latest news with #China
Yahoo
39 minutes ago
- Business
- Yahoo
Down 17% in a week and on a P/E of 10! Should I buy this dirt cheap value stock?
Chinese stocks are normally valued at a discount to their US peers, even if they're in hyper-growth mode. Take PDD Holdings (NASDAQ: PDD), which is a Chinese e-commerce company that trades at the sort of valuation you'd expect to see from a FTSE 100 value stock. The Temu owner grew its revenue and earnings by 59% and 78%, respectively, last year. Yet the stock has tumbled 17% in a week and now trades at a price-to-sales (P/S) ratio of 2.6 and a price-to-earnings (P/E) multiple of just 10.5. At first glance, this looks unjustifiably cheap. So, should I add this value stock to my portfolio? Let's find out. Firstly, it's worth pointing out why US-listed Chinese stocks trade at such a wide discount to American peers. It all boils down to regulatory risk, as China's tech companies can quickly fall foul of regulators and have them breathing down their necks for all sorts of reasons. For example, as well as its international Temu shopping platform, PDD operates Pinduoduo in China. It focuses on value-for-money merchandise and has a strong emphasis on agricultural products, directly connecting farmers with consumers. It has had great success taking market share from larger e-commerce rivals like Alibaba in recent years. However, President Xi Jinping wants more 'high-quality development' in the Chinese economy, with fewer counterfeit goods. In response to these concerns, Pinduoduo has initiated efforts to enhance product quality. Last year, PDD said it was 'prepared to accept short-term sacrifices' to 'vigorously support high-quality merchants'. I read this as a clear signal that the firm's profits were going to come down significantly. To be fair, management was honest about this, saying: 'In the long run, the decline in our profitability is inevitable'. Essentially, Chinese companies have to align themselves with what the government wants. And this often doesn't involve the maximisation of shareholder profits, which puts off a lot of investors. Hence why most Chinese stocks trade at cheap multiples. And geopolitical risk associated with US-China tensions only adds to the downwards pressure. But it's not all domestic issues, including weak Chinese consumer spending, for PDD. Temu's explosive growth has relied on shipping low-cost goods to US consumers directly from Chinese merchants. However, President Trump has abolished the de minimis tax exemption that encouraged this, as well as slapping sky-high tariffs on Chinese imports. In Q1, PDD's revenue grew just 10% to $13.2bn, a significant deceleration. Meanwhile, profits fell nearly 50% to $2bn! The risk here is that Temu users face paying far higher costs, which could undermine the platform's raison d'être (dirt cheap bargains). Instead of being able to 'shop like a billionaire', as Temu puts it, consumers might have to settle for shopping like a humble millionaire. Or not at all on the app. Given the significant challenges the company faces, I don't think the earnings figures can be relied upon. In other words, the P/E ratio of 10 might be misleading if growth decelerates and margins take a hit. If a US-China trade deal is struck, perhaps PDD's strong international growth might resume. But given the murky outlook, I'm going to focus on other growth stocks for my portfolio. The post Down 17% in a week and on a P/E of 10! Should I buy this dirt cheap value stock? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Ben McPoland has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
South China Morning Post
44 minutes ago
- Climate
- South China Morning Post
High spirits as Hong Kong's Dragon Boat Festival kicks off amid strong winds
Hong Kong dragon boat racers are in high spirits for Tuen Ng Festival, despite strong winds, with tourism authorities expecting a 14 per cent increase in mainland Chinese visitors compared with previous weekends. A tourism spot, where the Stanley International Dragon Boat Championship is taking place, was packed with racing teams and residents on Saturday morning. 'The weather today is a little windy, which may affect our performance,' said Alan Chan, team captain of the West Kowloon Cultural District's Dragon Boat team. 'Given the wind, there could be big waves when we go out to the sea later, which would affect our results. The waves were not that big when we practised. We will do our best.' The team, joining the competition at Stanley Main Beach for the first time, said they had completed seven two-hour lessons to prepare for the event. While some may view the weather as an obstacle, others believe it can give them a boost.
Khaleej Times
an hour ago
- Business
- Khaleej Times
Trump doubles global steel and aluminum tariffs to 50%, accuses China of violating trade deal
US President Donald Trump on Friday accused China of violating a bilateral deal to roll back tariffs and announced a doubling of worldwide steel and aluminum tariffs to 50 per cent, once again rattling international trade. Trump said China had violated an agreement with the US to mutually roll back tariffs and trade restrictions for critical minerals and issued a new veiled threat to get tougher with Beijing. "China, perhaps not surprisingly to some, has totally violated its agreement with US. So much for being Mr. Nice Guy!," Trump said in a post on his Truth Social platform. Later, at a rally in Pennsylvania promoting an impending "partnership" between Japan's Nippon Steel and US Steel, he announced the US would double steel tariffs from 25 per cent to 50 per cent, effective next week, which he said "will even further secure the steel industry in the United States." He subsequently announced in a Truth Social post that aluminum tariffs would also double to 50% on Wednesday. While China is the world's largest steel producer and exporter, very little is sent to the United States, as a 25% tariff imposed in 2018 shut most Chinese steel out of the market. China ranks third among aluminum suppliers. On overall trade with China, Trump said he made a "fast deal" in mid-May with Chinese officials for both countries to back away from triple-digit tariffs for 90 days. He said he did this to save China from a "devastating" situation, factory closings and civil unrest caused by his tariffs of up to 145 per cent on Chinese imports. Trump did not specify how China had violated the agreement made in Geneva, Switzerland, or what action he would take against Beijing. Asked later on Friday in the Oval Office about the China deal, Trump said: "I'm sure that I'll speak to President Xi, and hopefully we'll work that out." Rare earths licences But a US official told Reuters that it appeared China was moving slowly on promises to issue export licenses for rare earths minerals. The deal called for China to lift trade countermeasures that restrict its exports of the critical metals needed for US semiconductor, electronics and defense production. "The Chinese are slow-rolling their compliance, which is completely unacceptable and it has to be addressed," US Trade Representative Jamieson Greer told CNBC, without specifying how that would happen. Indeed, Reuters reported on Friday that global auto executives are sounding the alarm on an impending shortage of rare-earths magnets from China – used in everything from windshield-wiper motors to anti-lock braking sensors – that could force the closure of car factories within weeks. Liu Pengyu, a spokesperson for China's embassy in Washington, said China has maintained communications on trade matters with US counterparts since the Geneva talks, but raised concerns about US export controls. "China once again urges the US to immediately correct its erroneous actions, cease discriminatory restrictions against China and jointly uphold the consensus reached at the high-level talks in Geneva," Liu said in a statement. Reuters reported earlier this week that the US has ordered a broad swath of companies to stop shipping goods to China without a licence and revoked some existing export licences, according to three people familiar with the matter. Products affected include design software and chemicals for semiconductors, butane and ethane, machine tools and aviation equipment, these sources said. Spokespersons for the White House, the US Treasury and the US Trade Representative's Office did not respond to requests for comment. China talks 'stalled' On Thursday, Treasury Secretary Scott Bessent told Fox News Channel that US trade talks with China were "a bit stalled" and that getting a deal over the finish line will likely need the direct involvement of Trump and Xi. The US-China agreement two weeks ago to dial back triple-digit tariffs for 90 days prompted a massive relief rally in global stocks, and along with other pauses on Trump's import taxes, lowered the effective US tariff rate to the mid-teens from around 25 per cent in early April. It was less than 3 per cent when Trump took office in January. The temporary truce between Washington and Beijing, however, had done nothing to address the underlying reasons for Trump's tariffs on Chinese goods, mainly longstanding US complaints about China's state-dominated, export-driven economic model, leaving those issues for future talks. Major US stock indexes ended little changed on Friday after Trump's complaint about China's compliance. Trump's social media post came two days after a reporter infuriated him by asking him about Wall Street's new term for bets that he will back off extreme tariff actions - the "TACO" trade, an acronym coined by a Financial Times columnist for "Trump Always Chickens Out." "I chicken out? Oh, I've never heard that. You mean because I reduced China from 145 per cent that I set, down to 100 and then to another number?" Trump said, later adding: "It's called negotiation." Trump's tariff strategy also suffered a major setback on Wednesday when the US Court of International Trade ruled that his broad global tariffs, including those on China, were invalid because he exceeded his authority under an emergency powers law used to back them. An appeals court has issued a temporary stay for the decision, allowing them to remain in place for tariffstrump tariffs
NHK
an hour ago
- Business
- NHK
Trump accuses China of 'violating' trade agreement with US
US President Donald Trump says China has "violated" a trade agreement with his nation. Trump posted on social media on Friday, "I made a FAST DEAL with China in order to save them from what I thought was going to be a very bad situation." He said, "Because of this deal, everything quickly stabilized and China got back to business as usual." He added that everyone was happy and that was the good news. Trump then said there was bad news, adding, "China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US." But the president did not specify how China violated the agreement. Trump was later asked about this post by reporters at the White House. He repeated that China had violated the agreement and expressed confidence that he will speak to Chinese President Xi Jinping. Trump said, "Hopefully, we'll work that out." Trump's comments came after Treasury Secretary Scott Bessent told Fox News on Thursday that trade talks with China were "a bit stalled." The US and China agreed this month to cut additional tariffs on each other by 115 percentage points. Washington is calling for more market access and reducing the bilateral trade deficit. Trump is apparently dissatisfied with Beijing's response, and concerns are growing that the trade tensions could escalate again, depending on future negotiations.
South China Morning Post
an hour ago
- Business
- South China Morning Post
Why US exceptionalism and the export of crassness is finally losing its shallow appeal
In early May, as Roman Catholic cardinals convened for their conclave , US President Donald Trump posted an AI-generated image of himself as the pope . Shortly afterwards, he declared that he would like to become a pontiff. Reactions from around the globe were swift, though not everyone was shocked. After all, this was American crassness at its finest – a spectacle the world has grown accustomed to. Trump is neither the first nor the only US figure to inure the world to such behaviour; there is a long list. Advertisement When Trump announced sweeping tariffs on global trading partners in April , with China bearing the brunt, financial markets plunged into their worst turmoil since the early days of the pandemic. Ignorance, arrogance, exceptionalism, and fear of 'the other' converged in a display of American crassness on steroids. Trillions of dollars evaporated from stock valuations. Only when the fallout became too severe did Trump pause tariffs for most countries, eventually negotiating with China in mid-May. Yet much of the American public missed the larger picture: these tariffs weren't about sparking a trade war or addressing claims of the world 'ripping off' America. They were a desperate gambit to prop up the American brand – a brand that was sustained for decades by economic hegemony and the 'exorbitant privilege' of the dollar, but is now facing its moment of decline. Donald Trump holds a chart outlining 'reciprocal' tariffs at the White House on April 2. Photo: AFP Desperate to project strength, Trump boasted that world leaders were queuing up to make deals and even 'kiss his a**'. To call such behaviour crass would be an understatement, but the world barely blinked. This crude bravado has long been central to the American way, manifesting in entertainment, politics, media, finance and even sports. To much of the world, it reflects the immature culture of a brash young settler nation. Wealth accumulated through the colonisation of Native American lands bred an unfettered arrogance that normalised such behaviour. The world once playfully dubbed this the 'Ugly American', but that playful tolerance only emboldened the American psyche. Today, this has culminated in a rogue state run by supremacists, supported by a large majority. The US trade deficit, often cited as justification for protectionist tariffs, is merely a symptom of a deeper malaise. The real issue is that American goods – and the culture that sells them – are losing their appeal. Nations like China South Korea , and before them Japan , now produce superior goods. Meanwhile America, high on its own rhetoric about globalisation, shifted its economy towards services dominated by the financial sector, hollowing out its manufacturing base. Yet Americans continued to borrow and consume at unparalleled levels, encouraged by the state. Living beyond their means, they amassed crippling debt. All the while, they were led to believe that their consumerism was the engine of global growth, a myth perpetuated by American business media like Bloomberg and CNBC. For decades, this propaganda painted American life as the global standard. What was once irresistible now feels unsustainable, replaceable and, to the rest of the world, deeply crass. The world has finally woken up to the unsustainable mechanisms of the US-led 'rules-based order' and the hollowness of the so-called American dream. So why did it take so long for the world to realise that this dream is, in truth, a paper tiger? The myth of American superiority
