Cachet's Insight 22/07/2020

Market Outlook: Cinemas in low-risk areas reopen

China Film Administration announced that cinemas in low-risk of COVID-19 areas may resume operations on 20 Jul, while those in medium and high-risk regions will remain closed until further noticed, according to media reports. In addition, all movie tickets must be sold online through a real-identity reservation system and total number of viewers will be capped at 30% of maximum capacity. Further, the reopened cinemas are required to observe a 1-meter separation distance between viewers and cut their movie schedules by half.

Cachet’s View

According to data from the China Film Administration, revenue of domestic movie industry this year is expected to decrease by 30-billion-yuan year-on-year. With the reopening of movie theaters in lower-risk areas in China, it will bring a recovery in consumer demand for movies, driving Ali Pictures (1060.HK) and IMAX China (1970.HK) to bottom out. The policy of online purchasing of movie ticket may benefits ticket sales agents: Maoyan Entertainment (1898.HK), Meituan Dianping (3690.HK) etc. As the COVID-19 pandemic is fluctuating, recovery takes time. Investors can keep a close eye on watching those potential companies and buy for long term.

Market Outlook: The dollar fell

In July, as the global economic recovery is expected to heat up to promote the restoration of risk appetite, the dollar trend gradually weakened. Because of the low global interest rates, investors are seeking alternatives to stocks and bonds and flooding into the precious metal market. Gold and silver are favored by funds. As of July 21, the U.S. dollar index fell by more than 1.7%, citing the recovery of the global economy, Asian and European markets have attracted more capital inflows, while the number of confirmed cases in the United States has gradually increased.

Cachet’s View

As the United States is in the presidential election year, the situation of Sino-US relations has become more complicated. The all-round competition between China and the United States has changed the situation of world hegemony, and the fluctuation between China and the United States has exacerbated the decline of the dollar. Although there is a great chance for the dollar to rebound in the short term, we are optimistic that Europe will take the lead in recovery under the long-term trend of unlimited volume. Therefore, we recommend buying and holding precious metals such as silver, and high-quality currencies such as Euro and Pound that benefit from the decline in the dollar.

Market Outlook: Ant Group is going to list in China and Hong Kong

Ant Group, a subsidiary of Alibaba (9988.HK) and the parent company of Alipay, announced today that it has launched a plan to seek simultaneous issuance and listing on the main board of the Hong Kong Stock Exchange and the Science and Technology Innovation Board of the Shanghai Stock Exchange to further support the digital upgrade of the service industry to expand domestic demand , To strengthen global cooperation to help global sustainable development, and to support the company to increase technology research and development and innovation. Ant Group reportedly seeks at least US$200 billion in IPO valuation, which is equivalent to one-third of Alibaba’s current market value of US$663 billion.

Cachet’s View

Ant Group is the parent company of Alipay, China's largest mobile payment platform. The listing of Ant Group is believed to boost the overall valuation of the financial technology sector. The market value of Ant Group is over US$200 billion, which has injected new impetus into the Hang Seng Index for a long time and can also consolidate Hong Kong's position as the world's leading corporate fundraising market. We are the first to be optimistic about the long-term development of the Hong Kong Stock Exchange (0388.HK). With the landing of China's financial technology monster and the return of Chinese concept stocks, Hong Kong is likely to become the "Oriental Nasdaq."

Product of The Week

Founded in 1992, Greenland Holding Group Company Limited (Greenland Holding) is a China-based company. It was one of the country's largest property developers by contracted sales in 2018. The Shanghai State-Owned Assets Supervision and Administration Commission (SASAC) had an effective shareholding of about 46.37% in Greenland Holding as of 30 September 2019. The company is headquartered in Shanghai, with a focus on the real estate sector. The company has other businesses, including construction, consumer products, energy, finance, and auto dealerships. Greenland Holding also owned about 59.11% of Greenland Hong Kong Holdings Limited as of June 2019, which is listed in Hong Kong and serves as the company's primary overseas listed vehicle in the real estate development and investment business.

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