Tomorrow NetEase, which has become the portfolios biggest position will report results, I still believe in the company long-term but I decided to slice the position somewhat, to lock in some profits while we are close to what I saw as the short term price potential of the stock. I sell 30% of my NetEase holding as of close today. I’m still optimistic about the report though, Tencent released it results today and they beat analyst estimates, mainly due to very strong gaming profits in their mobile games. NetEase is not as heavily tilted towards mobile (yet), but I still see it as a positive that the sector seems to still have some legs to it’s growth. As a Chinese colleague of mine explained to me, the urbanisation has created all these huge cities where people have 40-50 min daily commutes on the subway, what else would they do than play games on their smartphones to and from work.
The cash from NetEase I place in CRRC, which I had at a smaller weight and now take up to a full size position. From the cash I have left I also take a 3% position in Autoliv, the stock has been trading fairly weak lately, although they have a lot going for them in the smart car space.