Last week Didi announced that they were going to delist from US stkc exchange. In this video, I’ll talk about what this mean for all the other China stocks, will they delist too? What should you do now? Should you still invest in China stocks or stay far away?
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0:00 – Intro
1:07 – What happened to Didi
Right after Didi IPO on US stock exchange on June 30th, the China government immediately asked Didi to remove their apps from app stores, saying that Didi was illegally collecting data, then started investigation on Didi due to national security concerns.
Few months later, Didi announced that they will be relaunching their apps soon. But there were also reports that China asked Didi to delist from the US, and US announced that they will start delisting foreign stocks if they don’t meet audit requirements.
In the end, Didi announced that they will delist from US and list in Hong Kong instead.
2:19 – What does this mean for other Chinese stocks?
US created Public Company Accounting Oversight Board, to inspect the audits. If companies do not comply for 3 years, they will be delisted. All the companies have cooperated except for China and Hong, because China blocked US regulators from inspecting the audits.
3:14 – Contradicting news from China and US
There were alot of contradicting news saying that China wants to cooperate, then China doesn’t want to cooperate. Till now, there’s no conclusion yet.
5:25 – Will other chinese stocks delist too?
There are reports that China is having talks with US. I believe that eventually they will come to an agreement because delisting doesn’t benefit anyone.
6:17 – What happens if Chinese stocks are delisted?
But if China stocks are delisted, nothing bad will happen because of fungibility. You can exchange your US stock with Hong Kong stock instead. However the stock itself would drop due to all the negative news.
6:59 – My thoughts
When you are investing in China stocks, you need to be aware that there’s an added layer of risk, the government.
There are many big investors who are bullish on China stocks, like Ray Dalio and Charlie Munger. China is estimated to overtake US by 2028, which will benefit China companies.
If you want to invest in China stocks, just invest in them directly via Hong Kong stocks. For ETFs, invest in ETFs that don’t have US holdings, like CQQQ.
Personally I’m quite bullish on China stocks, but I prefer not to invest in them because they are more complicated than US stocks.
*None of this is meant to be construed as investment advice, it’s for entertainment purposes only. Some of the links and other products that appear on this video are from companies which Kelvin Learns Investing will earn an affiliate commission or referral bonus.*