BABA bagholder here.
Just a few weeks ago, the stock looked like it was falling down without any end in sight. $73 and seemed the price would go in the $40s or whatever.
In the past week (and today), the stock has been climbing quite well (and surprisingly, no one talks about the stock anymore). At the time of writing, BABA in Hong Kong is now $110.50 USD.
Alibaba since the tech crackdown and delisting issues has been doing amazing as a company despite the zero covid lockdown in China.
It beat expectations. Its Ant Financial is profitable. CCP seems to be giving a green light to Ant Group and it looks like Ant Group might IPO again in the near future.
Unlike all the fears of Pindoudou/JD taking all the market share, Alibaba is actually taking massive market share in the lower tier cities (basically, taking away Pindoudou's growth story).
Alibaba is getting a new CEO to revamp Lazada and China has been openly declaring the past few months heavy support for its tech sector as China as a whole is struggling (due to zero covid, housing crisis, etc.).
Alibaba is also growing very well including its Cloud sector.
While the story of China currently is really grim (with housing crisis, insane zero covid policy, tech crackdown, etc.), Alibaba has somehow been growing even better than before overall. Imagine in a healthy economy then.
Outside the lower margins, Alibaba as a company has gotten a much stronger moat than 2 years ago in China. All the while everything has been going against Alibaba in the macro perspective.
And Jack Ma recently made a public appearance earlier this year in China. And China has declared for 25th anniversary with Hong Kong, mainland Chinese will from this July purchase Hong Kong ETFs through Stock Connect. And China has repeatedly stated it is basically doing with tech crackdown (even having Xi say it); I doubt CCP is going to back on its words so quickly especially with the current housing/zero covid crisis in China.
In other words, mainland Chinese will be buying BABA (09988 HK) from this July with their money. The housing crisis has been a blessing in disguise as CCP has since created a 401K for investing in Chinese equities and seem to be taking equity markets very seriously (as a viable alternative to investing/pension). China has also been opening more Stock Exchanges including Beijing Stock Exchange last year.
All the while China declared end of last year that investing through VIE structure for foreign investors is a valid means of investing (for Chinese equities).
If even mainland Chinese from next month will be investing in 09988 (8 09988 share == BABA), then doesn't this imply BABA shares are legitimate shares in the eyes of the government?
Why have 401K tied to BABA otherwise. Also, to clear confusion, both BABA and 09988 are the same shares through the Cayman Islands.
You can always exchange BABA for 8 09988 shares in Hong Kong at any reputable brokerage.
Regardless of delisting story or not, if even mainland Chinese is going to own 09988 shares, then doesn't that imply those shares are legitimate henceforth implying BABA is at an irrational low. A company of Alibaba's size is trading at $260 billion. Note that Tencent and Alibaba literally run China.
The size and influence of Tencent and Alibaba is like Microsoft/Google/Apple/Amazon of US.
I do think this stock is worth looking into with more objective eyes. I know there's justified hate on China but this company literally runs China and China has basically given a green light to the shares as legitimate forms of investing inside China.
As a bagholder, I honestly think the price today is absolutely nonsensical. While US market has an overvaluation problem that worries everyone, Chinese market has an undervaluation problem that worries everyone (in a different way).
Note the political risks remains: Especially China and Taiwan. All hands are off if something happens there.
Otherwise, I honestly feel the price today for BABA (09988) is too unrealistic even if delisting occurs. Sure valuation would be lower due to lower liquidity and trust, but considering mainland Chinese will be buying them too, fundamentals should matter more in the longer run.
I will also note Tencent trades in OTC and has done extremely well. Holding Tencent past decade despite the Chinese tech sector crash would have outperformed FAANG shares. And shares like Tencent give dividends.
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