Alibaba

Jack Ma is 'trying'to get out yet investors is trying to get in...


https://m.youtube.com/watch?v=12tcAJUzZwA

https://m.youtube.com/watch?v=_MOAT64WMlY

(25-02-2023, 02:21 PM)CY09 Wrote: 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.

I thought during the covid 19 period, our authority also requested banks in spore to 1) extend mortgage loan to those retrenched 2) reduces the dividend payout?

(25-02-2023, 11:16 AM)Big Toe Wrote: Personally, given a choice I would rather take a chance on Anwar than on Alibaba.

I would think Alibaba will survive longer than Anwar in govt. Once their govt change, policies will change again. Keeps on flip flopping. I stopped looking at Malaysia shares or any investment after the clob saga.

In terms of setting right policies, it is a low bar to cross. Anwar will have no problems at being better. Do remember that Msia is somewhat dysfunctional until Anwar made it more stable thus far. Question is how long can he keep at it / the "Unity" government stay united?

As for Alibaba it is crystal clear that the primary objectives of the CCP is not exactly the same as the shareholders. Especially with large foreign ownership for Alibaba. When we have such misalignment, you can either thread with extreme caution or better yet, avoid it altogether. Alibaba may well turn out to be a great investment, if you are prepared to roll the dice.

(25-02-2023, 10:05 PM)Big Toe Wrote: In terms of setting right policies, it is a low bar to cross. Anwar will have no problems at being better. Do remember that Msia is somewhat dysfunctional until Anwar made it more stable thus far. Question is how long can he keep at it / the "Unity" government stay united?

As for Alibaba it is crystal clear that the primary objectives of the CCP is not exactly the same as the shareholders. Especially with large foreign ownership for Alibaba. When we have such misalignment, you can either thread with extreme caution or better yet, avoid it altogether. Alibaba may well turn out to be a great investment, if you are prepared to roll the dice.

100%.. why take the risk? Is the juice worth the squeeze? What is your base/Bull case for Alibaba in 10 years? @Bibi

(26-02-2023, 01:01 AM)Wildreamz Wrote:

(25-02-2023, 10:05 PM)Big Toe Wrote: In terms of setting right policies, it is a low bar to cross. Anwar will have no problems at being better. Do remember that Msia is somewhat dysfunctional until Anwar made it more stable thus far. Question is how long can he keep at it / the "Unity" government stay united?

As for Alibaba it is crystal clear that the primary objectives of the CCP is not exactly the same as the shareholders. Especially with large foreign ownership for Alibaba. When we have such misalignment, you can either thread with extreme caution or better yet, avoid it altogether. Alibaba may well turn out to be a great investment, if you are prepared to roll the dice.

100%.. why take the risk? Is the juice worth the squeeze? What is your base/Bull case for Alibaba in 10 years? @Bibi

Im not vested in Alibaba. My only HK share is Ping An Insurance.

(26-02-2023, 12:27 PM)Bibi Wrote: Im not vested in Alibaba. My only HK share is Ping An Insurance.

Noted. Thanks for the reply. As an ex-shareholder, nothing against the company and business model; just cautious about the government. Always open to possible bull case that I might miss.

To be fair to the Chinese regulatory authority, Alibaba business model is highly predatory and could bring down the banking system if unrestrained. The lending business of Ant Group once obtained a financial leverage of around 100 times.

(25-02-2023, 02:21 PM)CY09 Wrote: 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

" 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."

I remember around 10 years back when Singapore's public transport fare increase was reviewed by the Public Transport Council every 1 or 2 years, even though all the quantitative criteria were passed (CPI, ROA earned by operators), PTC still did not allow SBST to get the full fare increase. If I remember correctly, the reason given was to take into consideration inflationary effect on the public. But perhaps it was also in consideration of elections.

I also would not be surprised if some of the merger and acquisition activities of Singapore's GLCs are directed by T which may have different interests from minority shareholders.

In Singapore's case, SBS transit were given carrots to stomach the less than expected rise. They were not required to give back the bus advertising spaces when the bus terminals/stops were returned to the state.

In China, there were no give/take, it was all just the communist party taking away. This to the extent that Alibaba even recognised it as a one-off donation expense.

Right now, Alibaba is being sold at 11% freecash flow yield and forward P/E of 14 times. Its an unpredecented figure and is probably the lowest range ever traded in history.