KWEB - KWEB ETF: Risks Outweigh Stimulus Measures For China Internet (Rating Downgrade)
2024-01-31 21:22:50 ET
Summary
- The KraneShares CSI China Internet ETF is now trading at less than one-quarter of its 2021 high, with its P/E ratio trading at 50% below QQQ's multiple.
- Thus, it may seem appealing to dip-buyers, especially also given the stimulus package.
- However, digging deeper, it is found that the main factors driving the economy have still not recovered, while regulatory risks persist.
- Worst, talking geopolitics, Chinese Internet players being denied advanced computing chips is also a headwind, especially when competing internationally.
- Thus, given the risks, the level of stimulus may also not be sufficient, and the ETF could slide further.
You may be looking to diversify some money in tech away from the U.S. In this case, the KraneShares CSI China Internet ETF ( KWEB ) seems appealing given that at a price/earnings ratio of 12.2x , it is more than 50% undervalued relative to the tech-heavy Invesco QQQ Trust ETF's (NASDAQ: QQQ )....
KWEB ETF: Risks Outweigh Stimulus Measures For China Internet (Rating Downgrade)