Cathie Wood’s ARK Hasn’t Given Up Completely on China. Where It Sees Tremendous Opportunity.
Cathie Wood’s ARK Invest recently dumped most of the Chinese holdings from its actively managed exchange-traded funds as Beijing cracked down on tech companies. But the firm hasn’t completely given up on China.
ARK still sees tremendous opportunity in the digitization of Chinese healthcare. China’s healthcare system has long been overburdened, and high-quality medical resources are scarce, writes ARK analyst Yulong Cui. The biggest and best-quality facilities account for less than 10% of China’s 30,000 hospitals but handle more than half its total visits. Patients can wait for days before receiving care from the most seasoned and reputable physicians.
So far, the digitization of healthcare in China has lagged far behind advances in mobile payments, food delivery, and other forms of e-commerce. But China wants to change that: Since 2015, the government has introduced a series of policy shifts to steer more healthcare solutions online, according to Cui. Result: Online consultations in China are likely to increase from 6% of all outpatient visits in 2019 to 50% by 2025, ARK estimates. That could mean a $50 billion market.
Ping An Healthcare and Technology, Alibaba Group Holding, and JD.com all have their own digital health platforms. Private firms in the space are also growing fast. Tencent-backed WeDoctor, for example, is planning to go public on the Hong Kong stock exchange later this year. The ARK Autonomous Technology & Robotics exchange-traded fund and ARK Fintech Innovation ETF have some exposure to those stocks. ARK has also been a big investor in U.S. telemedicine stocks such as Teladoc Health.
Next Week
Monday 8/16
Tencent Music Entertainment Group, Tokyo Electron, and Clear Secure are among the companies holding earnings conference calls.
The Federal Reserve Bank of New York releases its Empire State Manufacturing Survey for August. The consensus estimate is for a 26.5 reading. That compares with a record high of 43.0 in July, when the general business conditions index rose 26 points.
Tuesday 8/17
BHP, Walmart, Home Depot, Agilent Technologies, Pandora, and Krispy Kreme are among the companies hosting earnings conference calls.
America’s Car-Mart, Jack Henry & Associates, and La-Z-Boy report financial results after the market closes and will hold earnings calls the following morning, Aug. 18.
The Federal Reserve releases capacity utilization in the industrial sector for July. Consensus calls for a 75.7% reading, little changed from June’s 75.4% reading. Industrial production is seen rising 0.5% from June’s 0.4% seasonally adjusted increase.
The National Association of Home Builders releases its NAHB/ Wells Fargo Housing Market Index for August. Economists forecast an 80 reading, the same as in July. The index is down from its all-time high of 90 set in November.
Federal Reserve Board Chairman Jay Powell will host a virtual town hall with educators and students.
The Census Bureau reports retail sales data for July. Expectations are for a 0.3% seasonally adjusted month-over-month decrease, following a 0.6% rise in June. Excluding autos, spending is seen rising 0.2%, compared with a 1.3% rise in the previous month.
Wednesday 8/18
Cisco Systems, Lowe’s, Target, TJX, Tencent Holdings, Brinker International, Analog Devices, Synopsys, Lumentum Holdings, and Nvidia host earnings conference calls.
The Federal Open Market Committee releases the minutes from its late-July monetary-policy meeting.
The Census Bureau’s new residential construction report for July is expected to show the seasonally adjusted annual rate of housing starts at 1.610 million, down from June’s 1.643 million. Housing starts hit a postpandemic peak of 1.73 million in March.
Thursday 8/19
BJ’s Wholesale, L Brands, Applied Materials, Ross Stores, Estée Lauder, Kohl’s, Macy’s, Performance Food Group, Petco Health and Wellness, and Farfetch host earnings conference calls.
The Conference Board releases its Leading Economic Index for July. The LEI is expected to increase 0.7% month over month, after gaining 0.7% in June.
Friday 8/20
Deere and Foot Locker host conference calls to discuss financial results.
Write to Evie Liu at [email protected]
