Thoughts on my Portfolio (June 2021)

My personal cash flow for the past few months has been tight. My parents needed more cash early this year. It is only in recent days or weeks that I have some spare cash to invest. Work wise, salary has also been stagnant given the recession.

Chinese Tech stocks sell-off

It is perhaps also timely as growth counters (US listed & HK listed stocks) have taken a beating in May 21. A quick look at the growth stocks in my portfolio (namely Alibaba, Pinduoduo, Alphabet and Mastercard) showed that many of them have dropped from their peak stock prices.

Pinduoduo Inc. (PDD) stock price is around 35% down from its peak.

Alibaba Group Holding Limited (9988.HK) stock price is around 32% down from its peak.

Mastercard Incorporated (MA) stock price is around 8% down from its peak.

It appears that there are more significant price drops from Chinese tech stocks, despite their recent stellar quarterly financial reports. In fact, Tencent Holdings Ltd., Alibaba Group Holding Ltd. and Meituan have accounted for more than 40% of the MSCI China Index’s decline since the February high.

As reported in May, PDD’s total revenues in the quarter showed an increase of 239% from the same quarter of 2020. Average monthly active users in the quarter showed an increase of 49% from the same quarter of 2020. Net loss attributable to ordinary shareholders in the quarter also dropped significantly (was RMB2,905.4 million (US$ 443.5 million), compared with RMB4,119.3 million in the same quarter of 2020). 

As reported in May, Alibaba’s revenue showed an increase of 64% year-over-year. Annual active consumers on our China retail marketplaces was 811 million for the twelve months ended March 31, 2021, an increase of 32 million from the twelve months ended December 31, 2020. Net loss attributable to ordinary shareholders was RMB5,479 million (US$836 million),and net loss was RMB7,654 million (US$1,168 million), primarily due to the above-mentioned Anti-monopoly Fine. Excluding this impact and certain other items, non-GAAP net income was RMB26,216 million (US$4,001 million), an increase of 18% year-over-year.

The stock price drop in the Chinese tech counters could be attributed to various reasons from the ranging from:

1) Beijing crack-down on heavyweight tech firms over monopolistic practices;

2) Washington’s threats to delist Chinese companies;

3) Concerns that commodity-fuelled inflation will prompt central banks to tighten monetary policy, denting the appeal of (tech) stocks whose valuations often hinge on earnings prospects far into the future.

Beijing names and shames Tencent, Alibaba, Baidu and 81 other apps for excessive data collection under new rules (read here)

Global tech sell-off deepens as Chinese index sinks 30% from high (read here)

China tech stocks may recover as most regulatory risks priced in, analysts say (read here)

Tiny bites into the dips

My unbalanced bar-bell portfolio (read here)

My stock portfolio is more skewed towards dividend income stocks. With my little bit of spare cash, I recently bought more of Alibaba stocks and will be looking to add a bit more to my growth counters (US or HK listed stocks).

Dividend cash flow machine

My passive dividend ‘machine’ has been churning along nicely.

I reckon 2021 total dividend will be much more than 2020 dividend income, although I reckon my focus this year tends to be slightly more skewed towards building up more on my growth counters.

Month over month, the dividend income should be more than the previous year’s amount, for most of the months.

The table below show the dividend amounts base on ex-dividend dates. Month over month, there is an increase as compared to the previous year (2020) dividend amount.

The table below show the dividend amounts base on pay dates. For May 21, the dividend amount was unfortunately lower than May 20 dividend amount. Nevertheless, the June 21 dividend amount is much more than June 20 dividend amount (more than make up for it).

Thanks for reading.

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