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Chinese Stocks & the Decline of CNY

The Chinese stock market is down 17% this year as a weak Chinese Dollar (CNY) has caused money to flow out of emerging markets. The decline in the CNY has taken the winds out from the sails of the top Chinese stocks — which were on a tear higher.

What’s worse than the stocks coming down is that lots of these companies report profits in CNY, and once this profit figure is converted to USD the annual profit estimates are coming in lower than last qtr’s.

Top stocks have similar characteristics: high profit growth, beating analyst profit estimates, and increasing future estimates are three of the most important.

Now we are in a situation where Chinese companies are missing estimates and future estimates are declining.

Here are some of the top Chinese stocks, along with their one-year charts. Let’s take a look at how the decline in the CNY is affecting my Fair Values.

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