Agreed, its a very good move for China and the Chinese population, the risk for China is a severa crash akin to 08 or something, and when you see the Evergrande situation you can see what could start it so I think the govt are making the right moves for long term stability.
As a shareholder its bad short-term for the stock price, however I think at current levels Ant Financial stake Alibaba owns is essentially priced at $0 so the fact it will work with govt more closely and have joint ventures will be good for Ant and Alibaba long term, for one it means Ant will get favourable govt treatment in future compared to a up and coming rival that govt have no interest/control in.
Imo it all depends on the outlook and view of Chinese gov. and its relationship to big tech (what a surprise I know -.-)
Anyway contrary to widespread believe I think a strong involvement of Chinese regulators/gov. could very well be seen as an advantage mid to longterm.
Why?
Reigning in bigtech is overdue lets be honest, China could be just ahead of the curve so to speak
If you argue upside is limited due to gov. regulation you could as easily argue gov. involvement can be protection against future headwinds as well. If Chinese Big tech play ball they can count on strong ally (i.e. Chinese gov) in the future
If you believe world is heading towards less gov.regulation then China is clearly moving against mainstream and current valuations seem to some extent justified.
Chinese BigTechs are starting to loose some of their economic moat, their huge pile of proprietary data.
Alibabaās Ant Group has begun to send its consumer credit data to a database run by Chinaās central bank.
Chinaās large internet platforms have for years tended to resist sharing their data, a crucial asset that helps them run operations, manage risk and attract new customers.
Alibaba is a good example of why fundamental alone, P/E, EBITDA, ROE, EPS, D/E ratio is not a good strategy in investing and trading.
In case of Alibaba, show how C.C.P could grab money from investors around the world. They should not allow BABA, other big Chinese private companies or its American depository to list in the US other international stock exchange from the beginning. Not after using them to collect money from international investors and then rob them.
The fundamental side is fantastic, one of the best ops out there. But I tend to agree with some of @adindas points. Particularly the fact that we are just easy access to capital for them.
But under the leadership under President Xi is as it is, it could be pretty nasty for some time due to the current unpredictability
Not only that, at some stage may the SEC take a different view of allowing these VIEs that represent the companies, opposed to the actual assets of the company float on the NYSE? Quite possibly. (I may be wrong on this, but Iām sure someone far more intelligent can cover this). And naturally, if you own BABA on its local exchange then this is mitigated.
So there are for sure two sides of things for sure. Iām in the I can make money elsewhere camp at the moment.
To be honest I am not sure why anyone buys bonds in anything right now
But yeah anyone who knows China or has lived there I think wouldnāt invest in property company bonds, or bonds as the risk reward is not favourable, Chinas property situation in crazy so I wouldnāt touch that industry. $BABA offers me a good risk/reward I feel, equally if it goes to 0 then my portfolio will survive.
In the current climate, those who want to invest in property in China has lost their mind. The āEvergrandeā Case will bring all of the chinese investment which have co-relation with chinese property down.
