2024 Week 17:
Nine-Point Guideline, Quasi live entertainment, Medialink Group, Activation Group, AGM experience
Nine-Point Guideline:
China Aims to End Age-of-Froth That Has Plagued Its Stock Market - BNN (bnnbloomberg.ca)
This China policy was published on April 12, and it stipulates a few things.
Dividends - “is to see more corporate profits passed on to investors. Firms should provide their payout plans before they go public, specify measures to boost dividends such as more mid-year payouts, and vows to reward companies that increase their profit distribution.”
Delisting - “Mainboard-listed companies may be delisted if their market capitalization falls below 500 million yuan for 20 sessions, higher than the earlier threshold of 300 million yuan.”
So which company will benefit from the guideline?
SOEs will heed to this rallying call and we should be seeing a sustained rally for SOE?
It is time to scan through Hang Seng China Central SOEs Index and buy your favourite.
Quasi live entertainment:
Since the end of the pandemic, there has been a continued craving for human interaction and humane-like entertainment.
Instead of being plugged into an artificial immersive experience through a VR/AR glass like the apple vision pro, the shift towards a more humane immersive entertainment experience should continue?
For the world of entertainment, the immersive world would be, I love to watch anime, listen to anime songs, buy anime merchandise, attend an anime concert, cosplay as my favourite manga character.
Okay, maybe I will not do that last item...
I am thinking about Medialink Group. Medialink is a distributor of anime and managed a host of IP on the sides. Anime is a growing category for online media consumption, they managed the IP (licensing and products) and also is trying to bring concerts to the fans. With the need for online media platform to move into profitability, will Medialink distribution business start to face margin pressure?
The same can be said for luxury goods.
The immersive world would be, I want to be engaged through watching online, attending of live fashion shows, story tell on the brand history, visiting an exhibit seeing the brand evolution and finally purchasing the product.
Okay maybe the purchasing of the product comes first… or whatever.
I am thinking about Activation Group. Activation provides integrated marketing solutions for luxury brands (like LVMH and Gucci) in China, Hong Kong, and Singapore. With the slowdown in luxury spending, will the luxury brands up or down their marketing spend in China?
Or how about motorsports or sports in general.
I will also want to watch F1 on TV, go to the grandstand to watch machines zooming past me in a milli of a second, attend, dance to the concerts on the side, drink some beer and then interact with the F1 drivers or pretty models on the paddock.
Yes, I think that is the complete immersive experience everyone is looking for.
Not the vision pro experience…
Bearish on apple (for a host of other reasons) and positive on the rest including F1 Group (Liberty Media Corp. Series C Liberty Formula One)
AGM Experience:
It is always good when you head into an AGM and you are the only 2 “real” public shareholders there.
For the first 30 minutes, I am the only person hammering questions at the CEO, COO and Chairwoman until the corporate secretariat decides to subtly put a stop to it. I guess they have a second AGM to conduct and could not afford to let the first AGM overrun.
On to the possibility of the lack of interest…
One possible scenario is that the company was so unloved and undiscovered that it could be an opportunity of a lifetime, or it is really not worthwhile for anyone but a small fry like me to turn up.
The alternate scenario is that 89% of the public float is currently controlled by the majority shareholders and it is a “controlled” stock and should not be touched.
Or another alternative scenario is that the majority shareholder is so aligned with the minority that I am able to ride on the coattails of this stable and growing industry for many years to come.
Overall, I usually feel more bullish when I am the only outsider among the insiders.
Maybe that is the contrarian in me acting up trying to be different when there is no need to be.
Maybe, there is a valid reason why I am the only “bullish” shareholder who is attending.