2024-04-24 18:39:33 ET
Summary
- Many forget that they are not directly invested in Alibaba, but only have a contractual interest in the profits through the VIE structure.
- Moreover, I do not see much room for multiple expansions unless growth picks up and returns on capital rise.
- In addition, there is strong competition in both international and domestic markets. Pinduoduo and MercadoLibre in particular are showing incredible growth rates.
The Alibaba Group Investment Thesis
I see a lot of social media posts right now comparing the valuations of Chinese stocks to oil stocks in 2020. And many are hoping that when sentiment turns positive again, there will be a chance to make good returns through multiple expansions. As for mainland China's A-shares, I agree. However, Alibaba Group Holding Limited ( BABA ) is fairly valued in my opinion, as I will explain below....
Read the full article on Seeking Alpha
For further details see:
Alibaba: Let's Clear Up Some Misconceptions