Kerrisdale Capital reiterates its bullish view on UP Fintech (TIGR), Tencent Music (TME) and U.S.-listed Chinese internet stocks. “The dominant Chinese internet companies are great businesses which have created robust online platforms with strong network effects, and are growing at higher rates than their comparable peer group in the US while trading at lower valuation multiples,” Kerrisdale said in a research note posted on its website. The firm believes investor concerns about the variable interest entity corporate structure among Chinese American depository receipt listings in the U.S. are overblown. “Business fundamentals will eventually drive the long-term cash flows and valuation multiples of the Chinese internet stocks,” says the firm. Kerrisdale believes Tencent Music shares “are easily worth 3-4x their current trading levels.” Shares of UP Fintech are up 2% to $17.12 in midday trading while Tencent Music is up 1% to $10.61.
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