The Chinese internet industry has had a difficult year with regulations aimed at redefining the space and the businesses that inhabit it. Amid all this, the KraneShares CSI China Internet ETF (KWEB) is experiencing record inflows as it continues to integrate new companies into its portfolio. The following is a breakdown of which companies were added and when.
Kuaishou Technology (1024 HK) was added during rebalance in February and is a content community and social platform for mobile users. It hosts a place where its users can create, share, and watch short videos and is akin to TikTok. Kuaishou Technology makes its money from live streaming, advertising, e-commerce and virtual gifts, according to CNBC, and weighs 2.56%.
Yidu Technology (2158 HK) was added during the June rebalance and is a medical data intelligence platform. It strives to deliver healthcare solutions created using big data and artificial intelligence technology, and also uses cloud technology. Yidu Tech is transported at a weight of 0.49%.
XD Inc (2400 HK) was added during the June rebalance and is an investment holding company involved in mobile and web video games. The company has two different parts of its business: a game publishing and operation service, and an information services segment which provides online marketing services for video game developers and other players in the business. the gaming industry, according to Reuters. XD Inc is shipped at 0.37% by weight.
Youdao Inc (DAO) was added during the June rebalance and is a developer and distributor of software applications. Some of the services they provide as a smart learning company include personal cloud, online shopping, language translation, and more, according to Bloomberg. Youdao is increased to 0.27% by weight.
360 Digitech Inc (QFIN) was added during the June rebalance and is a fintech platform that helps lenders reach underserved markets and uses funding partners to fund, according to Reuters. 360 Digitech provides risk management and credit data services to its users who may not otherwise have access to them. QFIN is transported at 0.68% by weight.
21 Vianet Group Inc (VNET) was added during the June rebalance and is the largest carrier-neutral internet provider in China, according to their website. They provide cloud services, hosting and related services, as well as corporate VPN services. VNET has a weight of 0.63%.
17 Education & Technology (YQ) was added in the June rebalance and is an online education company that has reworked its business model to comply with new after-school tutoring regulations. It’s the leading education technology company in China that offers a mixed-school and after-school model, according to their website. YQ is transported at a weight of 0.03%.
Zhihu Inc (ZH) was added during the June rebalance and is a question and answer website for its community, similar to Quora in the United States. website. ZH is brought to 1.16% by weight.
Full Truck Alliance (YMM) was added during the July rebalance and is the world’s largest digital freight platform based on gross transaction value, according to their website. The company is a logistics manager who connects trucks to shippers and enables requests and fulfillment on demand. YMM is increased to 4.75%.
KWEB, a Great Buy in China’s Growing Internet Industry
The KraneShares CSI China Internet ETF (KWEB) continues to be watched as the Chinese tech sector – especially the internet industry – struggles to comply with regulations and recover from its recent setbacks.
KWEB recorded $ 880 million in net inflows at some point last month as investors bought the downside and looked for the long term.
KWEB tracks the CSI Overseas China Internet Index and measures the performance of publicly traded companies outside of Mainland China that operate in the Internet and Internet-related sectors in China.
This includes companies that develop and market software and Internet services, provide retail or commercial services via the Internet, develop and market mobile software, and manufacture entertainment and education software for home use.
KWEB provides exposure to the Chinese internet equivalents of Google, Facebook, Amazon, eBay, etc., all of the companies that benefit from a growing user base in China, as well as a growing middle class.
Its main holdings include Tencent at 10.83%, Alibaba (BABA) at 9.18%, and Meituan at 9.04%.
The ETF has an annual expense ratio of 0.70%.
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