One Micron Can Buy Virtually the Entire Chinese Internet Sector

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In our previous article, we highlighted key signals indicating that the destructive, heavy-subsidy food delivery wars among China’s internet platforms were finally drawing to a close (see Is the Delivery War Drawing to an End?). However, as noted in our latest monthly views of Chinese equities, China’s internet giants are continuing to burn massive amounts of cash, but the ultimate strategic implications remain unclear to the public market.Baiguan Pro features short and timely commentaries on important market anomalies and events that are worth your attention. Today, our team’s Aaron breaks down this cash-burning and outlines why these cash cows might be intentionally understating their true profitability.One Micron Can Buy Virtually the Entire Chinese Internet SectorWhat’s Behind the Giants’ Bizarre Cash-Burn?Let’s log this historic milestone: Micron’s market cap now roughly equals Tencent+Alibaba+JD+ Meituan+Pinduoduo + Kuaishou combined.This year, Chinese internet stocks have been trapped in extreme pessimism. With Q1 earnings wrapped up, market sentiment has hit a freezing point. The contrast over the past month is jarring: US semiconductor stocks are skyrocketing, while US-listed Chinese tech giants continue to plunge.Michael Burry’s bullish call on Chinese assets about a month ago seems to have been a bit premature.Capital markets have priced Chinese big tech into complete distortion. The fact that a single memory chip maker like Micron (MU) is worth nearly the entire cohort of China’s digital pioneers is mind-boggling. These are massive commercial empires, yet combin…