Alibaba

https://www.straitstimes.com/business/ja...pital-plan

It looks like ANT's IPO is to resume. ANT will remain the largest shareholder with a 50% stake.

More importantly a government entity will hold 10%

Ant Group founder Jack Ma to give up control in key revamp

https://www.reuters.com/business/ant-gro...023-01-07/

監管有望告終! 馬雲放棄螞蟻集團在內多企業實控權｜方念華｜FOCUS全球新聞 20230109@tvbsfocus
https://m.youtube.com/watch?v=_MOAT64WMlY

China moves to take ‘golden shares’ in Alibaba and Tencent units
https://www.ft.com/content/65e60815-c5a0...f0f76462de

Quote:China is moving to take “golden shares” in local units of Alibaba and Tencent as Beijng formalises a greater role in overseeing the country’s powerful tech groups.

The Chinese government has responded to a stuttering economy by backing away from the tough fines and sanctions that were a hallmark of its campaign to rein in the country’s largest tech groups, but which also scared off foreign investors.

While the heavy-handed crackdown has ebbed, the government is increasingly snapping up small equity stakes in the local operations of big tech companies, as it recently did with TikTok owner ByteDance. This provides the Communist party with a mechanism to remain deeply involved in their businesses, particularly the content they broadcast to millions of Chinese people.

Did a new sum of the parts for the latest Alibaba's Dec quarter 2022 result

http://scg8866tstockinvesting.blogspot.c..._luGnZBzMY

if you cast your net wide enough, you will notice that there is significant number of large sized MNCs with steep conglomerate discounts in all major markets. Alibaba is the poster child for regulatory crack down/policy risk so discount is warranted. Whether having the chinese government taking a direct stake is a good thing in the long run remains to be seen.

Those old enough to remember the Msia CLOB issue(together with other policy shifts) will remember the pain. Perhaps Anwar will be a more moderate figure that can stabilize the country and win back the trust of investors.

Personally, given a choice I would rather take a chance on Anwar than on Alibaba.

Charlie Munger said recently at the Daily Journal AGM:

"I regard Alibaba as one of the biggest mistakes I ever made. In thinking about Alibaba, I got charmed by their position in the Chinese internet and didn't stop to realize, 'they're still a gawd-damned retailer.'”

Daily Journal has cut loss on its investment on Baba.

China Communist Party has dealt a permanent damage to the private market of China which will not be easily reversed.

Investors are now aware the government can force corporation to lower their fees (alibaba/meitaun), put a hand into their business running affecting profitability (Ant Group) or even take away their business like in the education industry. These are policy actions which will not happen easily even in authoritative regimes like in Singapore.

Alibaba may be valued at about 11% free cashflow yield with forward P/E of about 14. But then, people are aware the communist party can make it disappear like what happened in 2021. All the good work done by a good management can simply be undone by the government if the company is in the bad books.

How would one be able to value things with some precision if the communist party is doing it? A $25 billion valuation can become a $4 billion valuation in a week- just ask Temasek who lost a lot in its investments such as oriental education due to China policies

There were even proposals by Chinese lawmakers for schools to spend less time on English, because there is little use for it for majority of its citizens. It was rejected by Education Ministry.(At least education ministry have some horse sense). But the fact that such an idea can be floated scares me. And who knows what the future holds for schools and the education sector.

Most of us do not understand how entrenched the policies of the CCP are on its people and businesses. Every aspect of one's life is deeply intertwined with CCP's policies and objectives. Personal finance, education, etc There is not much space left to wiggle. But having said that, i am not saying that all of China is a bad investment in itself. It can be a good one, given the right valuation and condition.