 Good day, fellow investors. I have this long list of Chinese companies that I still have to research and yesterday I started doing that. However, I stopped immediately the first stock and I spent so much time that I didn't go to the second stock, so this video will be about BitAuto Holdings, a very interesting Chinese growth stock that is sometimes misunderstood by the markets. And if you look at the stock price, we can really see that the market misunderstands BitAuto. In 2014, BitAuto, that is a platform where merchandisers sell their cars, they pay a monthly fee for it, had profits, it was growing at a healthier rate 50% and the stock price almost reached $100. However, then BitAuto went into the transaction market where they will give car loans and the stock price dropped because of the huge investments and losses, so it wasn't more a profitable company. Then the stock price was lingering there, very low, then BitAuto announced an IPO of its lending business on the Hong Kong Stock Exchange, which pushed the stock price to above 40, but then with all the issues that are going there in China and with negative news due to a loss coming from the options given to employees of this Xinyin IPO, the stock price again dropped to the current $28.59. Now there is volatility, but there is also a business behind every stock and no matter how the stock is volatile, the business is always there. So we are going to first dig into the business and see what are the valuations of the business for the growth and if that is a good buy or a great buy or is something not to touch. If we look at the revenue, the revenue has been surging and increased at horrific rates in the last 10 years, even growing at 50% in the last year, so that's huge. However, the net income is negative and net income per share is 17 Remimbis or U1s, so very negative. Nevertheless, the book value of the holding has been growing constantly and you can see how it went from $7 to $22, now it's $20 and $19. That book value growth is because BitAuto constantly issued new shares in order to finance the transactional part of their car business, their financing car business, where they give loans to customers through online analysis. However, the book value of the similar situation we see with Tesla increased alongside very positive cash flows from the business, at least in 2016 and in the years before that. So very interesting good book value with a lot of cash coming from JD, from Tencent in those financing rounds. Going to the third quarter highlights, 53% increase, 54% increase. However, there was a loss from operations, which was huge, $65 million. However, that increased loss was mainly due to newly granted options by Xenin or however do I pronounce, I apologize in advance to its employers in the third quarter. However, if we take away that expense, which is not the cashers, expense, non-gap income from operations was $40 million, so that was a positive. And for the quarter, non-gap basic diluted income per ADS is 0.23 cents. So if you multiply that by four, you get to almost a dollar in earnings. A dollar in earnings, price is 28, price earnings ratio, let's say 28, non-gap earnings, something to note. And the growth is 50%. The price earnings ratio of 28 is nothing for a company growing at 50%. Let's dig deeper. What does BitAuto do is a leading provider of internet content and marketing services and transaction services for the Chinese fast growing automotive industry. So BitAuto has platforms where they sell cars, bitauto.com, and car sellers pay a monthly subscription or advertising fees to put their cars there. In addition, they are going into the loan business, which is growing at 200% per year, where they give loans to car buyers. So they are the financing behind the car buyers. And now, as I said, BitAuto IPOed Xenin on the Hong Kong Stock Exchange. And here there comes a very interesting situation of arbitrage, where the IPOed company is worth more than the mother company. So if I checked everything right, I didn't go that deep, I'll tell you later why. But Xenin has a current market capitalization of 5.5 billion. BitAuto holding owns 42%, which is 2.41 billion dollars. The current market capitalization of BitAuto holding is 2 billion. So there is a difference of 300 million, negative. So the car platform has a negative value of 300 million dollars, but the trading platform is the profitable business. So it's very, very interesting how that works and how the US market differently values Chinese businesses than the Hong Kong market. And the IPO Xenin was very high, then the stock price drifted lower or lower, because the US stock price drifted lower and lower, which means that there is a difference in perspectives from Hong Kong Chinese investors and US investors. What is very important to look for when analyzing such a company is the actual car market in China. And we can see that it has been growing at staggering rates and is still growing. We don't have yet full data for 2017, but the growth is expected to be 5% in comparison to 2016. So what's the main point here? Xenin is positive, is operating positively. You see here the operating cash flows are there, price to earnings ratio is 28 and the revenue is 50%. Now this is a good growth story. I think BitAuto will do well in the future if they manage to continue to grow at these healthy rates, if they manage to find good borrowers for their loans and they don't see default rates, if China continues to grow and everything is fine, that will be okay. So we can see profitability and then if profitability comes from the loan business and growth of 50%, then BitAuto stock would explode again as it did already twice in the past. The risk is of course that there will be issues in China, China slowing down, that would be a terrible situation for all Chinese stocks. However, given the global growth, given the strength of the global economy, that's unlikely to happen in the short term. What will happen in the short term is that there will be no more options for employees which were related to the IPO. So there will be profitability and if BitAuto shows four quarters of profitability with 50% growth, it might get revalued by the market. However, we have seen other companies that are also growing as 50% that don't make loans are not in the risky Chinese loan business and have lower price earnings ratios. A company that we already discussed that was at 12 when I first made the video then it went to 20 something and now it's back to 15 as again Chinese stocks are very volatile, but it still has now a price earnings ratio of 9. It pays a yearly dividend is UPI holdings. You can check the video here and you can compare it to BitAuto. Similar growth 50%. However, similar market wealth, money, financing and so however, I think UPI is cheaper than BitAuto holdings for this moment. I don't know how it will grow. Perhaps the potential is bigger with BitAuto because it has the backing of 10 cent of JD of whoever there. So it might get better recognized and it is a bigger company. Nevertheless, if you're looking for Chinese growth, BitAuto might be a very, very interesting player for me. Personally, you know, I really like low risk high reward place. So I will wait with BitAuto. I want to see it below 20 so that the price earnings ratio is at least 15 for such growth with a healthy business model. No risk coming from the older regulation in financing that comes in China. And then I will look again at BitAuto. So for now, here is the story. Perhaps you will like it depending on how it fits your portfolio. It will be probably a good investment at these levels, especially if the growth grows. However, I prefer less risk. That's it. Hope you don't mind. Thank you for watching. Check the UPi video and I'll see you in the next video.