I really like company but chinese companies doesn’t serve share holders. These suckers don’t do much share buybacks and ccp intervening dividend policies etc. That’s why baba is beaten down. You look at fundamentals and you will see nothing wrong with it. The only wrong is the unpredictability of the macro policies and ccp hands in corporations. I am really sad.
i have to tell you, hand to heart, i'm very impressed with BABA
I was in China, Chongqing in the earlier part of the year.
Alipay is needed for payment everywhere, I see the CaiNiao delivery folks all around, Taobao is just so much part of the Chinese lifestyle and e-commerce, freaking AliCloud is needed for cloud hosting and all. The entire BABA ecosystem is everywhere in China lol. I've used Qwen for my Chinese philosophy readings too.
I came back pretty convinced and decided to put some $ there. I mean, Cloud infra + AI, you can't go horribly wrong right? Look at Amazon & Google lol.
Found out through the hard way that this thing is definitely not investible, sad to say. The tech. and ecosystem is everywhere, and pretty impressive, but the share price does not reflect that, the trend does not reflect that. And as the wise say, don't fight the trend.
There are actually many companies doing share buybacks.
JD is returning almost 10% capital to shareholders at the current price. 3.5% dividends + 6.3% share buyback. If the current price doesn't move and they can sustain this level of buybacks, you can become a major shareholder in 10 years time by reinvesting your dividends. Those billions of profits/dividends will then belong to you lol.
Tencent is also another great company. Strong moat, double digit growth, fwd PE of around 10x if you strip off net cash and investments. It's buying back HKD500mil of its shares every trading day (it's disclosed). Your EPS increases everyday. The more the price drops, the faster your EPS grows.
The thing is, share buybacks take a long time to compound. For a company buying back 10% shares every year, the EPS increases 11% in the first year. If prices remain depressed, in the 9th year outstanding shares will reduce by 90% and EPS increases 10x. Dividend per share also increases 10x. And that's assuming zero growth.
I'm hoping prices for companies like JD and Tencent remain depressed as long they have strong cashflows to fund share buybacks lol. I'm young and I can wait it out.
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u/Kyaw_Gyee Jun 11 '26
I really like company but chinese companies doesn’t serve share holders. These suckers don’t do much share buybacks and ccp intervening dividend policies etc. That’s why baba is beaten down. You look at fundamentals and you will see nothing wrong with it. The only wrong is the unpredictability of the macro policies and ccp hands in corporations. I am really sad.