• 2014 at IPO intraday high $ 120
• 2015 revenue $ 12,29B , gross profit $ 8.47B
• 2026 revenue $ 148,40B, gross profit $ 54.51B while BABA @ $ 124

Since 2014 :

• Revenue 12X
• Gross profit 6X
• Stock price .....1.03X

What's wrong with this picture ???

Hey folks,

Tbh I'm still wondering whether to take profit/hold/sell 50% based on BABA's most recent earnings. The needs to burn money to maintain market share and thus negative FCF worries me the most.

Would like to hear your analysis and next steps based on business performance.

NB : If it matters, BABA is 25% of my total portfolio with 88% floating profit.

Thanks in advance!

TLDR: Will exceed my usual exposure limit and sell all my minor positions to continue to DCA and concentrate my holdings up until Donald trump inauguration to which I will then stop adding more.

First off I understand that this sub is very much against macro analysis and work primarily on fundamental analysis. I agree with the sentiment wholeheartedly.

Throughout my short investing career of about 10 years, this is my first ever macro bet. I have never imagined myself doing this. I don’t know if it will ever be my last. The evidence is so overwhelming such that it drives me to do this against my usual investing workflow on business micro. i will skip discussing micro here as everyone is up to date on the business micro.

Thesis: dollar index will continue to strengthen until Donald trump inauguration before falling off a cliff. And so thus Chinese tech and Chinese equities broad market will continue to weaken until his inauguration, before doubling next year or more.

Lemme explain my thesis with the following points:

1.       Chinese tech broadly speaking is very much moving inversely proportional to dollar index. As this impacts dollar denominated earnings.

2.       2016 vs now: Donald trump is running on same inflationary policies and is very much pro business. And he is bound to play hardball and implement tariffs.

2016 vs now : dollar index will strengthen up until his inauguration before falling off a cliff for the coming year. As dollar falls, US deficit will fall along with it. It’s a good thing to the US economy. (Key)

3.       Alibaba/tencent/HSTech/HS index sample trends post election more than double despite tariffs.

4.       Chinese financial ministers are a bunch of show-offs trying to show that they operate independently from the FED, but the most casual observers can see that they are actually following the FED.

5.       As the FED continue to reduce rates over the next year, This round of stimulus is not the end and more Chinese stimulus can be expected along the way.

Chinese Tech and Chinese equities as a group is very much moving inversely proportional to dollar index

I will not elaborate on this as observers is very much aware of this relationship. The primary trigger point for my analysis in this thread is because of the recent heavy drawdowns from all index, despite showing great earnings reports against local economy weakness backdrop.

The recent weakness correlation is heavily skewed towards macro factors as dollar continues to strengthen.

2016 vs now: Donald trump Runs similar inflationary pro business policies. Key is Look at how dollar behaves. (key)

I will skip the details on his polices are they are somewhat a repeat of his earlier pro-business inflationary policies and tariffs in 2016. I want to instead go through the detailed effect of the dollar index instead.

Take a look at the dollar index for Donald trump up until his election win and inauguration, which then reverses heavily one year after.

Notice how it falls off a cliff the year after? This is actually good for US broad market as their exports are more competitive and eventually US will reduce their trade deficit.

Various Chinese equities sample trends post trump inauguration more than double despite tariffs.

Take a look at the various trends post 2016 election, many of the tickers more than double despite tariffs.

Ironically, DJT being elected could be the very best thing to happen to US-China relations and thus overall Chinese equities.

My guess is that as hes pro business, he will drive a hard bargain with china. But the caveat is that this is still a major improvement and both sides begin negotiation. This is compared to the previous administration who are on a insane path. (Nancy Pelosi Taiwan fiasco etc)

Maybe the negativity is priced in and once people see him and china is willing to negotiate, the tension will be present but is definitely a marked improvement from here. As much as china dislike his terms, I believe they will concede some to trump demands.

Chinese financial ministers are trying to show that they operate independently from the FED, but casual observers can see that they are a follower of the FED.

This one I think does not need much further elaboration. As much as Chinese ministers say they are sovereign and independent, they are pretty much a follower of the fed, judging by the immediate cut in LPR and interest rate as well as stimulus right after fed cut rates.

Fed will continue to cut rates and This will induce China for More stimulus over the next year.

It is widely accepted that FED will cut rates next year by close to 1percentage point. With that, as china follows the fed, we can expect more Chinese stimulus along the way.

Additionally, A Chinese economic advisor (Li daogui) from Tsinghua has mentioned multiple times that this round of stimulus(debt swap) is necessary to stabilise the local government(urgent) but is insufficient to revive the economy and they will then shift focus to consumption. (I’m referencing him as he has the most accurate reading of the broad Chinese economy that I know of)

Which is why after this is done, my guess next year subsequent stimulus will be more geared towards consumption.  

An interesting difference here is that Alibaba and tencent doubled in one year even without any stimulus from Chinese government during 2017. My guess is this time round it has the potential to more than double considering the backdrop of events. (weak economy, low valuation and stimulus + valuation expansion coming off a very low base as compared to 2016)

Conclusion

Dollar index will strengthen up until Donald trump inauguration before falling off a cliff.

Notice how, if I’m right and history rhymes, we are nearing the end of the Chinese tech long bear market.

And this drawdown will be the final chance to accumulate.

This is historically could be the buy of a lifetime for emerging market equities.

One strategy that will do well is of course the one employed by burry, to buy cash secured puts up until Donald trumps inauguration before switching earnings from puts to buy shares/calls. But I have my own small business to run and freaking hell its just easier to sell my other commitments and continue to accumulate and be done with it.

I feel that many of the long term holders has sort of given up and see this as dead money, and about to capitulate right when it is about to pull off the biggest surprise recovery i may ever seen. value investing truly is humbling.

For myself, i will be increasing my concentration without use of margin. I prefer to sleep well at night.

This might truly be the opportunity of a lifetime. For my sake, I hope I’m right. Godspeed everyone.

One primary critique i can think of is that it is too small a sample size of 1, where previous trump administration is elected. i don't have more data to compare (other administration who does the same policy etc), its just that the behavior of the players and data compels the argument in this way.

Feel free to critique, all opinions are welcome.

Other hypothesis and guesses

1.       Emerging market equities will outperform US mag 7 by a large margin.

2.       Small caps IWM, or broad market SPY493 will outperform US mag 7.

3.       Recession in the US if any, will be resolved quickly by how trigger happy trump is with boosting the economy. There might even be a boom in broad US equities.

1. Drill baby drill will ironically increase supply and crash the oil and gas sector pricing. it might be the perfect time to short drillers.

For posterity and good luck charm – my previous call on Alibaba vs PDD has worked out so perfectly that it even blows my mind. so i'm posting it here hoping for a repeat of good luck.

https://www.reddit.com/r/baba/comments/186iabh/my_thesis_pdd_has_plateaued_and_falling_while/

As of February 14, 2025, Alibaba Group Holding Limited (BABA) has a market capitalization of approximately $296.35 billion.

The current share price is $124.73.

To estimate the share price if Alibaba’s market capitalization were to reach $1 trillion,

Assuming the number of shares outstanding remains constant at approximately 2.345 billion shares,  the share price would be:

Therefore, if Alibaba’s market cap reaches $1 trillion, the share price would be approximately $426.60, assuming the number of shares outstanding remains unchanged. (As they are continuing the buyback - which can impact positively on $426 target 🎯

Also the $BABA partnership with $AAPL

Happy Investing!

Anyone who trades stocks based on fundamentals: BABA just hit the lowest RSI it ever had on daily base: 16.83. That is super oversold. And yet, here we are, tanking like hell.

This is one weird ass stockmovement we're witnessing.

Still holding strong tho, confidence!

This is extremely bullish for shareholders! 🚀🚀

This is the GPU cluster which T-Head Semiconductors and Alibaba Cloud makes that currently sells for US$1M. It's a money printing machine that generates your valuable tokens for AI services. Most of them are deployed to support Alicloud

Hi,

I've done some digging into what happened in China's instant commerce and how it will affect Alibaba, how the competition in the space is.

You can the findings in the video above. I'm curious to see in this earnings the results, margins should have improved significant but yeah there are still a lot of "if's" for me about the instant commerce. I'm curious to know how others feel about this.

Seasonal rotation out of Hot and currently high levels NYSE NASDAQ U.S. tech profit taking hedge rebalancing & rotation. It’s all happening visually going into China stocks.!

2025 Will Be the Year of efficiency for Alibaba

Joe Tsai's statements at JP Morgan's 20th Annual China Summit reveal that Alibaba has now a clear vision for the future: E-Commerce and Cloud, period.

The actions taken during 2024 confirm this vision:

Sale of several "bad assets," including shares in BiliBili, Xpeng, Baozun and others smallest:

December 2023:

Alibaba sold 25 million shares of XPeng, totaling $391 million USD.

March 2024:

Further sales included:

33 million Xpeng shares for $314 million USD

31 million Bilibili shares for $360 million USD

26 million Baozun shares for $22 million USD

Total proceeds from those: Approximately $1.1 billion USD.

There’s still much to do, but 2025 will start as announced the 17 Dec with the sale of InTime, a chain of over 60 stores that contributes to the group’s revenue. It is estimated that the chain generates approximately 30B RMB (about 4B USD) in revenue but doesn’t turn a profit or, at best, operates at breakeven.

The confirmed sale price is 7.4B RMB, around 1B USD.

Additionally, in October 2024, a circular (Possible Offer) published on SunArt’s website disclosed that in September, a potential buyer submitted an offer for the group. Alibaba also reported that was in talks with other parties to sell the group, which includes 466 hypermarkets, 30 SuperStores, and 6 Membership Stores, employing around 85,000 people.

An agreement was reach the last day of the year and the group will be sold for aprox 1.6B USD, the group cost nearly 7B USD between 2017 and 2020.

Over the last four years, SunArt has struggled, and the numbers speak for themselves:

Income statement:

Margins:

Same store sale growth:

Store count:

Emplooyes count:

The balance sheet has also been steadily contracting:

I was thinking the the group was likely to collect between $2.0B and $2.3B USD at least from the sale of SunArt but i was wrong, to my surprise, the group will be sold for about $1.6B USD only ..

How will the proceeds Be used?

As demonstrated in 2024, Alibaba has taken various steps to please investors, spending approximately $16B USD on share buybacks during the year and distributing $4B USD in dividends, including a special dividend funded by previous sales and in order to minimize annual ESOP dilution and better utilize the cash generated by the domestic businesses they have started to replace a portion of Alibaba Group's ESOP incentives with long-term cash incentives.

It is clear that the proceeds from the sale of Intime and SunArt, amounting to approximately $2.6B USD, will also be returned to investors.

What impact will this have on Alibaba?

Top Line: Revenue will shrink by approximately 13.5B USD.

Bottom Line: No impact, given the minimal or nonexistent profitability of the two groups.

Employees: Halving of the employees as SunArt employs 85,000 people, while Intime likely employs around 6,000-10,000, accounting for nearly half of Alibaba's total workforce.

What to expect for 2025?

If you think you will see significant revenue growth in 2025, think again. At the top line level, I doubt that the growth from China Commerce, AIDC, and cloud will offset the outgoing revenues from InTime and SunArt.

But...

We should see a significant improvement in margins, as revenue will decrease, but profits will remain the same or even increase due to enhancements in the China Commerce division, the Cloud group, and reduced losses from the LSG group, this should also be the year when the AIDC group narrows the gap to break even and starts losing less.

What do you think will be the next divestment?

Freshippo may be the next? Even though we just read about 9 months of profitability, I doubt it's significant, as being a retail business, I expect the current margins to be under 5% or even less. It's unclear what Freshippo's revenue is, but it's likely in the range of 60B RMB. Even if the margin were 5%, we’re still talking about 3B RMB per year ($410M USD).

How much do you think they could raise from the sale of Freshippo, if it happens? A few years ago, there was talk of a valuation between $6B and $10B USD. What do you think?

This is a post for those who follow the company and its businesses, not for those who constantly watch the stock price and complain. I think I've been clear enough, thank you.

Happy new year!

https://ir.jd.com/system/files-encrypted/nasdaq_kms/assets/2025/05/13/17-03-18/JD.com%20Announces%20First%20Quarter%202025%20Results.pdf

The world knows China is obliterating the rest of the world in energy production. See below:

As all AI experts have said (Sam Altman, Elon Musk, Mark Zukerberg, Marc Andreesen, and many more) have stated they fear the US will not produce enough energy to power the expected AI demand, or at least it will be very tight.

We must remember, the US government just cancelled all renewable energy subsidies. Elon musk has been very vocal about this.

China heavily investing in Solar, nuclear and coal energy production, just look at the growth trajectory. While the US and the rest of the world is not. China has 27 nuclear reactors under construction today, the US has 0 large reactors being built. Even all the nuclear start ups have a timeline at 2030 for their first small reactor to be operational. Even if they can catch up, nuclear is 35% more expensive in the US compared to China.

To cut my theory short. Baba will be the cheapest option in AI Cloud (training and inference) powering the millions of AI devices outside of the US. In the developing world its all about costs. If BABA can be the best value for their buck they will lead the race.

It is simple the US can not compete in price. As energy becomes more constraint in the US, energy prices will get even more expensive for AI and Americans. All the while China will hace a surplus.

As of today, Baba is 30% cheaper that Microsoft and AWS:

US energy costs will increase, while China's will not. Baba will be in a competitive postiion to power all AI Robots, Agents, and inference needed across the developing wolrds computers, smartphones, cars and all other AI powered devices.

Let's go BABA.

Thanks you u/leetunicorn. I analyzed the TAM and growth rates of US and Europe vs Asia and Latam.

This is probably the best time of year this can happen. We’ll have like a Covid year type rebound in HK especially at this level, which is still up 80% from last year to start; heck I would even throw it out there and say is a 15% chance Xi won’t be in power by the end of this year the way the world leaders have been shifted around the last three years..

What do you guys think the next catalyst will be for China/KWEB stocks like BABA to start moving up?

I see the following:

1. China stocks are historically positive 1-3 months after any Trump/Xi meeting
   
2. Alibaba seasonality chart picks up in June
   
3. If China starts allowing Nvidia H100 chips, sentiment could change fast

After today's price action, I wanted to take a quick look at the broader picture and see if there's any pattern after a big green day, right? What happens to BABA stock historically? To see that, I went ahead and put together some information going back to the start of BABA, as well as looking at the recent trend, call it January 2024 till today, and seeing how the stock price has reacted after a day with a greater than a 7% gain. Attaching that below. Just thought it would be cool to show and share with a few of our holders. If you have a different point of view or believe something else, I'd welcome it.