Portfolio manager: We like Chinese online gaming companies as they are positioned for 'solid growth'

I think the administration in China has been very clear that they don’t want to engage in widespread stimulus in that sort of manner. So I think it’s going to be more targeted and that also means this, you know, the recovery is going to be more moderate in in these categories. More broadly, you do need to see, as you mentioned you know stabilization property, a lot of wealth is tied into the property market. So that would give people confidence improvement in employment. And so these, these are the bigger drivers I think as opposed to these smaller. Targeted sort of stimulus. Measures, yeah. When you mentioned employment, I just think of the astronomical almost youth unemployment. And the reason why I mentioned that is that you say that you like the the online gaming industry, you’re more constructive on the online gaming industry. Are you not fretful though because you know it’s almost like a once bitten, twice shy kind of a situation because yes, they they appear to be at the very least a little bit positive on that spacer, you know, allowing licenses for new games hand over fist. But do do you? Do you get concerned that you know what is in effect now, considering their track record might not be in effect, you know, two months from now or even tomorrow, Who’s to know? Well, the, the, you know, the one thing we’ve seen in the online gaming sector and if you look at this over 2 years is that a lot of regulation has come in when you talk about restrictions in terms of minors and the number of hours they can play a week, content regulation, you know approvals were halted for over 12 months and that they’ve resumed middle of last year, so. You have already seen quite a bit of regulation. That doesn’t mean that we’re going to see the end of it. We’ve seen the end of it, but I think we we threw the vast bulk of it and anything from here will be more just tinkering around the edges. And so approvals are resuming as you pointed out we are seeing. Decent gaming growth for Nettie’s 10 cent was weaker in the recent result, but we think that pipeline should provide some growth going into 2024 and it is a cheaper way to consume entertainment in China. So as I talk about the trading down theme, I think gaming is is a relatively more resilient area. And these companies are also growing internationally, you know for a third of $0.10 business now comes from the international operations and that’s growing faster than domestic. And more importantly, advertising is growing faster and gaming, so they’re actually getting sort of solid growth overall. So I think gaming is one of the better areas to do investing and competition is less in this segment if you look at. Consolidation in this segment, it has consolidated around 10 cent in Neti. Smaller operators have generally fallen by the wayside.