China Internet Stocks Down 10% — Buying Opportunity or Warning Sign? | Henry Greene

In this episode of Lead-Lag Live, host Melody Schaefer explores the recent 10% drop in China Internet stocks, asking whether it signals a buying opportunity or a warning sign. Guest Henry Greene, investment strategist at CraneShares, argues that the decline is primarily a short-term pullback driven by macro factors like Middle East tensions and investor concerns over profitability from subsidy wars in instant delivery services. Despite this, he emphasizes that China's internet giants—Alibaba, Tencent, and Baidu—are fundamentally undervalued, especially given their strong AI initiatives, cloud growth projections, and emerging chip-making capabilities like Alibaba's T-Head. Greene highlights the transformative impact of DeepSeek’s open-source AI model in reshaping global perceptions of China’s innovation capacity, contrasting China’s open ecosystem with the U.S.’s proprietary, subscription-based models. He also discusses the strategic appeal of CLIP, a covered call ETF on KWEB, which offers high income (26% annual yield) and downside protection in a volatile market. Greene concludes that China Internet stocks remain attractive for long-term investors due to strong free cash flow, long-term earnings growth, and relative insulation from geopolitical risks like the Strait of Hormuz crisis.