BABAF - Why China Is A Buy But Alibaba Is Not

• Investors overestimate the "China Risk" due to misunderstanding the reasons behind regulatory changes as well as the possible consequences of the deteriorating political situation.
• Delisting is not the end of the world for investors, and could actually be beneficial for the stock price of Chinese companies.
• Regulation punishes big companies like Alibaba and Didi, but can support smaller companies.
• While Alibaba has lower multiples than its American peers, it still trades at higher multiples than most US-listed Chinese companies.
• However, there are still many solid Chinese companies with much lower valuations (P/E Ratios below 5) and balance sheets full of cash, that offer great investment opportunities.

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