In this video, I will be talking about Alibaba (BABA 0.93%) and whether or not it's worth the risk. Charlie Munger has doubled his position, Ray Dalio raised billions for his China fund, and the Chinese cloud market is booming. You can find the video below, but here are some of the highlights.
- Investing in China hasn't been all sunshine and rainbows in recent years. Real estate crisis, CCP regulations, anti-for-profit education, less gaming, delisting risk, etc. But could 2022 be a turning year for Chinese companies like Alibaba?
- The US dollar has fallen 1.8% against the Chinese renminbi. China's interest rates are around 4%. If the economy slows down significantly, it can very easily lower rates and print more to support the economy, whereas the Fed has already used all its ammunition.
- Market research firm IDC expects the cloud industry in China to grow by a compound annual growth rate of over 30% until 2025, reaching $87 billion by 2025. China's cloud market is driven by infrastructure, whereas the US is more software focused. Alibaba Cloud has a 38.3% market share in mainland China as of Q3 2021.
- For Singles' Day, Nov. 11 -- a major shopping day in China -- the company reported gross merchandise volume of about $83 billion, up 15% from last year and proving there's resilience in Chinese e-commerce.
- It's crucial to note that although Alibaba's main focus and bread and butter is China, it has a big presence in Europe and Latin America. Could it offer its services in Africa in the future? Maybe.
For the full insights, do watch the video below, and consider subscribing.
*Stock prices used were the closing prices of Jan. 14, 2022. The video was published on Jan. 16, 2022.
