Two Chinese concept stocks that may cause heavy losses to investors at any time

Original title: Two Chinese concept stocks that may cause heavy losses to investors at any time Source: Financial industry website
The U.S. Senate recently passed a new bill. Many investors who buy U.S. listed Chinese concept stocks will be hit, because under the bill, companies controlled by foreign governments or listed companies that do not hand over accounting books to U.S. auditors , May have to be forced to delist and delist. The bill is still to be passed by the House of Representatives, and then signed into law by President Trump, but the bill is currently supported by the Republican and Democratic parties.
The threat of this bill is imminent. Under such volatile market conditions, it is difficult to continue to invest in Chinese concept stocks. However, many large companies, including Baidu and Alibaba, have stated that they will not delist.
However, the proposed bill will hit many other Chinese companies at any time. Let’s take a look at a few stocks that are too risky.
Pinduoduo is the third largest e-commerce platform in China, second only to Alibaba and JD. It has recorded strong double-digit revenue growth, but its losses have continued to expand.
Pinduoduo encourages consumers to buy in groups, order products in large quantities, and create a sky in the highly competitive e-commerce market. This approach is very popular in the low-income market, but because of the proliferation of fakes on the platform, it was also included in the “notorious market” blacklist by the US Trade Representative.
Pinduoduo tried to whitewash, crack down on fakes, punish related businesses, and expand its business to high-income cities to develop brand-name products. However, to attract buyers, Pinduoduo persuaded merchants to sell brand-name products at prices lower than Alibaba and JD.com, and then paid for the difference.
This strategy of seeking growth at all costs is much the same as Luckin Coffee’s challenge to Starbucks. If the battle with Alibaba and JD.com fails, it will be counterproductive at any time and cause heavy losses for investors.
GSX Techedu, a Chinese online education platform, looked like a perfect growth stock at a glance. Last year’s revenue increased by 432%, and its adjusted net income surged by 617%. The company also stated that the COVID-19 epidemic has brought new catalysts, and more and more students have registered for online courses.
However, many prestigious short-sellers have recently accused GSX will be the next Luckin Coffee, claiming that the company fabricated fake sales and student numbers, and promoted growth through promotional offers, and even filled the classroom with chats.
robot
, Create an illusion.
GSX denies the allegations, but Muddy Waters recently disclosed that it has been short-selling the stock. Muddy Water is also the short-seller that previously accused Ruixing Coffee. Before Ruixing Coffee admitted to fraud, Muddy Water also began short selling the stock. GSX may eventually turn the risk out, but these allegations make this stock too risky. In this cruel stock market, the risk of this stock is too high.