East Buy Holding (HK: 1797) (OTCPK: KLTHF) shares are down 8.5% today. The East Buy share price fall seems to be coming from worries over whether the new streaming policy is quite working. We should though make something clear here. The information flow from the Mainland China economy to us out here in the English language is not good. So we often do see share price movements in these Hong Kong listed - but Mainland operating - stocks that we can’t really explain. We have to make assumptions and rely on a very delayed and fragmentary information flow to see whether we’re right or not.
The issue seems to be: “East Buy Holding, an e-commerce unit of New Oriental Education and Technology Group that is driving the private education provider's transformation, will diversify and begin live streaming on Alibaba Group Holding's Taobao after Douyin, the Chinese version of TikTok, suspended its show last month. East Buy will start on Taobao on Aug. 29, the Beijing-based company announced yesterday. Yu Minhong, founder of New Oriental, and Sun Dongxu, chief executive of East Buy will lead the team.” So, perhaps some nervousness about how this will all work out is the cause?
East Buy Holding share price from Google Finance
The rise over the past few days is easier to explain as we’ve got the information there: “East Buy Holding Limited, the livestreaming arm of Chinese education training company New Oriental, released its first annual performance results. The report shares the company's net revenue of 4.5 billion yuan ($618 million) in the 2023 fiscal year ending in May, an increase of 651 percent. Their net profit was 971.3 million yuan - compared with a net loss of 71 million yuan in the previous fiscal year, reported The Paper.”
So there’s obviously speculation about how much of that trade is going to move over to the new platform.
We’ve talked before about East Buy: “This being something we need to realise. Sure, everyone has to play by whatever the rules are in their particular marketplace. But capitalism, market operators, are adaptable as to how to work within those rules. In fact, free market capitalism is the one system that explores what can be done profitably within the one set of rules faster than any other system. What this means is that when the rules change we need to be looking for those who adapt to the new market realities the best. Which is what we seem to have in East Buy Holdings.”
Well, we’ll find out, won’t we?
