E Fireworks Display

While we are recuperating from the fireworks display last night (and for New York City a later noisy thunderstorm) the rest of the world more or less runs to business as usual. China has extended its crackdown against tech companies to add YMM (Full Truck) and BZ (Kanzhun) to the list of companies under investigation. Neither is a major holding outside the PRC but the message is clear: the Xi Jinping government wants to control foreign listed stellar companies. DIDI, hit last week shortly after its US IPO is not an isolated case.

The Hong Kong market duly took note and DIDI fell 1.03% Monday, while good old Tencent TCEHY, (in Hong Kong not here) was hit with a 0.05.% drop likely to become the basis tomorrow.

Photo by Annie Spratt on Unsplash

Energy

The oil price rose to 76.81/bbl after the OPEC attempt to have a meeting to agree to boost production (and cut prices) was blocked, reportedly by the United Arab Emirates, but backed by Saudi Arabia and Russia. BP plc was reported to be quitting Iraq and fell 0.37%. However, Royal Dutch Shell B (RDS-B) gained 0.10%.

Britain saw the IPO of what is alleged to be the first “green hydrogen trust” raising £250 mn. A trust is Brit-speak for an open-end fund. We already own the largest closed-end fund in this arena, AYAtlantica Sustainable Infrastructure Ltd which rose $1.12 today. We also own it through our Canada ute Algonquin, AQN.

*Barron's wrote up Plug Power, PLUG, which also is into hydrogen. While admitting it is a singularly appealing stock, Royal Bank of Canada analyst Joseph Spak called it the best play in hydrogen and rated it buy. However the weekly dissed his advice because it trades at 18x current sales and because it rose 973% last year. Spak's target price according to Al Root is based on future cash flows and a 35x multiple on the $537 mn he estimates for 2015. Root also thinks that 2/3 of analysts covering PLUg rate it buy and the average TP is not $42 but $45. PLUG fell 4% YTD after a 9-fold rise in 2020.

*With so many Chinese shares under the gun, haven seekers bought into NIO which gained for other pundits besides me. However, Arne Verheyde, a Dutch writer on seekingalpha admitted that his model portfolio was generally money-losing except for NIO stock, accounting for 2/3 his gains. We sold 2/3 our NIO stock last year because it accounted for too much of my gains. NIO rose 5.33% last week.

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