G'day folks and welcome to another trading day with your friendly, neighbourhood CMC Market Analyst!
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Azeem Sheriff - @Azeem__Sheriff
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Trading Idea of the Day
NASDAQ:BIDU - Baidu Inc - BULLISH BIAS (long term) - BULLISH BIAS (short term)
- Key levels on the chart - consider taking trades from key support/resistance zones.
- Price is significantly undervalued and at a key support, a level not seen since the beginning of COVID.
- There are some notable similarities between Baidu and Alphabet (Google's parent). Both started their operations as search engines but have since exponentially grown and expanded their revenue streams, expanding into mapping, AI and cloud services which present major opportunities for growth.
- Baidu Core which is the operating wing of Baidu and encompasses its cloud services, AI, mobile ecosystem and intelligent driving initiatives - struggled to maintain the necessary growth rate to keep the share price stable. While the impacts of the recent COVID lockdowns in China are now being felt in the financial statements.
- China’s State Administration of Market Regulation (CSAMR) hasn’t supported Baidu much, having launched anti-monopoly, data security and other crackdowns on tech companies since late 2020 post the COVID period. Baidu joins the list of tech giants who’ve been whacked with penalties for monopolistic business practices over fears these companies have too much control over their industries, which appears to be a recurring theme.
- Although it hasn't been all that bad for Baidu as it still remains a fan favourite amongst major asset managers PRIMECAP Management, Alkeon Capital, Wellington Management, Arrowstreet Capital, Morgan Stanley have all maintained their valuations in Baidu, further adding to their already sizable holdings in their portfolios.
- As China emerges from its economic slowdowns, we could potentially start to see a pivot in the share price as some investors could be taking early bets on the success of Baidu’s driverless robo-taxi service, Apollo GO, which plans to operate in 65 Chinese cities by 2025.
ASX & Economic Key Events
ASX Key Events Calendar (TODAY)
Economic Key Events (TODAY)
Economic Key Events (YESTERDAY)
OPTO For Investors Research
Article of the Day: Honeywell shares overtake Intel and Tesla in self-driving race
Podcast of the Day: BlackRock’s Carolyn Weinberg on the democratising power of ETFs
APAC Daily Report
Click here to access our daily APAC report, prepared by my fellow market analyst @TinaTeng_CMC
Market Snapshot & Highlights as of 8:00am AEDT
EXPECTATIONS: Energy LOWER (lower oil prices) & Materials LOWER on overall lower commodity metal prices.
Global Markets Headlines
- Elon Musk says he will reinstate Twitter account of former President Donald Trump after online poll (CNBC)
- Theranos founder Elizabeth Holmes sentenced to more than 11 years in prison (CNBC)
- Last minute objections threaten historic UN climate deal (CNBC)
- Qatar to ban beer at World Cup stadiums in dramatic reversal two days before tournament starts (CNBC)
- Carvana lays off 1,500 employees following stock free fall (CNBC)
- FTX tells court Sam Bankman-Fried transferred assets to Bahamas government custody after bankruptcy (CNBC)
How Caroline Ellison Found Herself at the Center of the FTX Crypto Collapse (WSJ)
(All news & data sourced from AFR / The Australian / Bloomberg / Reuters / CNBC / Wall Street Journal / Morningstar / OPTO / Trading Economics)