- 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.
For further details see:
Why China Is A Buy, But Alibaba Is Not