Let's talk about Xiaomi and Tencent
The Hong Kong stock market is going crazy, and the two stocks I heavily invested in (Xiaomi + Tencent) have risen significantly. Let's discuss the background and Xiaomi and Tencent.
I. Background
The surge in the Hong Kong and A-share markets has several backgrounds:
- Moderate macroeconomic easing
This began at the start of the real estate bull market many years ago. The current stock market is akin to the houses back then; China is starting to follow the path of the U.S. stock market—while I agree that there is currently no comparability between the two, it won't be a smooth journey. However, as long as you vaguely acknowledge that "A-shares and Hong Kong stocks are better than before," that is sufficient.
- Confidence bottom reversal
In recent years, Chinese assets have plummeted, and many people, including myself, lost confidence. However, after some exploration abroad and with platforms like Deepseek, confidence has greatly reversed.
In essence, just like investment itself, human factors are crucial. As long as the intervention does not cause excessive destruction, we should have a sense of the diligence and output of the Chinese people.
This part does not need to be elaborated; let's observe as we go.
- Valuation bottom range
At the worst times, every step forward is upward. The stock market has struggled for many years, with horizontal stagnation and vertical heights.
Some say that the A-share market needs to rise by 1,000 points. I believe that if it rises by 1,000 points, it will certainly rise much more than that.
Because whether it’s the change in the macro environment or the FOMO among retail investors, we have long experienced in the crypto space: when it falls, it often leads to despair, but when it rises, the FOMO can be "even more desperate."
II. Xiaomi
Xiaomi is like China's Tesla, and Lei Jun is the Chinese version of Elon Musk.
- When it comes to stock trading, it’s essential to see what the 30-50 age group is interested in and what they love. Therefore, while Moutai is great, the demographic of 30-50-year-olds today is more inclined towards trendy toys, Lei Jun, cars, and smartphones than the Moutai drinkers from over a decade ago. This is Xiaomi's fundamental base.
Currently, Xiaomi is developing what is called the Xiaomi ecosystem, which includes smartphones, cars, and smart home appliances—this is the ecosystem.
Now, if you are renovating a house and want to set up a smart home, using Xiaomi products is very cost-effective. You can get a complete set from lights, speakers, curtains, cars, smartphones, to cameras, which is quite interesting. [Note: I mainly use the Apple ecosystem, but my usage is primarily overseas products; however, this should not bias my view of the Xiaomi ecosystem.]
Additionally, it is worth noting that Tesla's valuation has always been relatively high, mainly because of the premium associated with Elon Musk's influence.
In China, currently, only Lei Jun can be compared (only from the perspective of investment valuation; there is no need to discuss the fact that Musk is much greater, as I agree with that).
Xiaomi is the only project in China with a solid base and a popular traffic star.
- Tencent
Regarding the widespread implementation of AI, I initially thought it would be Apple's Siri, but now I believe it will definitely be Tencent. Features like WeChat's search will replace Baidu, and the combination of Deepseek and WeChat will lead to significant growth for both—Deepseek will quickly gain hundreds of millions of users through WeChat, while the latter will provide the best AI experience.
Tencent's social moat is firmly established, and at least for now, no other social tools seem capable of changing that.
These two have high trading volumes, making them suitable for large funds.
Note: This article only analyzes what these two are; discussions about whether to buy, when to buy, etc., are not within the scope. I have bought Tencent at over 200, over 300, and over 400, with no investment advice given.
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