Let me first respond to a question that readers have asked a lot in the past two days, which is why my attitude is always negative every time I mention Alibaba, and whether I am very pessimistic about this company.
Simply put, yes. In fact, if you look at its stock price, you will know that the market has no confidence in it.
Not to mention the 81% pullback in the Chinese stocks market crash in previous years, just looking at this round of market that started on 924, Alibaba’s performance was also disastrous. The latest stock price has fallen back to the level of September 19.
I won’t post the financial report figures one by one, I will just give a simple conclusion. Alibaba’s most profitable business is Taobao Tmall, but the revenue of this business has hardly increased, and the adjusted profit is still slowly declining. The reason is that China’s e-commerce market is no longer growing at a high speed. On the other hand, Pinduoduo and Douyin are both extremely powerful, and Alibaba can’t do anything about them.
Ten years ago, Alibaba’s share of China’s e-commerce market once exceeded 70%, but now it is only 33%, and there is a high probability that it will decline further. (Pinduoduo 19%, Douyin 18%)
As for the remaining five or six businesses of Alibaba, some are losing money and some are making money, but together they are neither losing money nor making money. Alibaba Cloud, which was once highly anticipated, is now only growing in the single digits, with an annual profit of about 10 billion. If you are a small company, 10 billion is a lot of money, but when thrown into Alibaba's financial report, it will just make a fuss. As for the remaining three, Cainiao, Big Entertainment, and Local Life, they are just making up the numbers, neither making money nor growing.
The only thing that has some hope is the cross-border e-commerce business. Although it is currently losing billions, the revenue growth rate is close to 30%, which is the hope of the whole village. Interestingly, the person in charge of international business in the past few years is Jiang Fan, who was involved in an extramarital affair a few years ago. So this guy is very capable and shines wherever he is.
I read in the news a few days ago that Alibaba was going to merge its domestic and international e-commerce businesses and let Jiang Fan be in charge. The company has reached a critical moment of life and death, honor and disgrace, so of course it will make use of talents in an unconventional way.
We all know that Tencent repurchases 100 billion a year. In fact, Alibaba repurchased more than Tencent in the past year, which is more than 14 billion US dollars. After repurchasing so much, the stock price is still so low. You can see the attitude of institutions towards it.
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Today, a speech by gsw went viral in the circle. His macro analysis is already very influential, and this time some of the content is a bit...unrestrained.
Let me give a brief summary:
1. China's economy is undergoing a transition from reliance on debt and real estate to technological progress and industrial upgrading, but the reason for the economic slowdown is not transformation and upgrading, but cyclical fluctuations.
2. The government has deliberately guided and restricted the industries of listed companies, which was implemented after 2018 and has been effective so far. Gao did not specify which guidance and which restrictions were imposed, but it is easy to imagine that there have been no IPOs in real estate, catering, and liquor for many years, while chips and electric vehicles have all been green-lighted.
3. Young people's income expectations are declining, and their consumer confidence and willingness to buy houses are declining. On the contrary, the elderly have stable retirement income and are active in consumption. So today's famous sayings on the Internet: the elderly are full of vitality, the middle-aged are disappointed, and the young are lifeless.
4. Gao believes that the data from previous years are very strange. The relationship between several important data such as employment, GDP and core CPI is somewhat abnormal. He thinks that some of the data may be "overestimated".
5. Next year will be an important turning point. The government has realized the problem and will take targeted and effective measures to provide a more positive macroeconomic environment for the stock market. However, he believes that it will take 3-4 years for the economy to fully recover, so he should remain patient.
Recently, both Fu and Gao gave personal speeches. In fact, I feel that Gao's writing quality is better. He has already shared his views very frankly within the scope of speech. You can only digest as much as you can.
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A-share turnover today was RMB 1.7 trillion, with a market median of -0.08%, basically neither rising nor falling. What’s interesting today is that the market trend is rising at both ends and falling in the middle, which was very rare before. The key is that the surge at 2pm was a bit like the national team's previous support for the market, but the ETF's explosion was not significant enough and the evidence was insufficient.
If there is no intervention of national team funds, the trend of Shanghai Composite 50 and CSI 300 today is quite strange. You can recall that this table was arranged in ascending order most of the time before, and in descending order on very few trading days, but I have never seen it arranged in descending order first and then ascending.
In terms of sectors, the most prominent ones are banking (+1.6% today) and real estate (+1.63%), ranking 4th and 5th out of 90 industries respectively. However, I looked through all the information today and did not see any good news related to banking and real estate, which is quite strange, because these two sectors are not touched by hot money now, retail investors also stay away from them, and institutions can forget about it.
In general, today's market fluctuations are within the normal range. We will not make too much extended interpretation. If there is really big money to drive the stock market, it is not a bad thing anyway. Some people often ask a question, that is, how to withdraw the government's rescue funds in the future. In fact, it is not necessary to withdraw. The Hong Kong Fortune Fund mentioned yesterday is a good example.
The TraHK Fund was established in 1998, which was exactly the second year of the financial crisis. At that time, government funds were injected into the stock market to stabilize the stock market. After that, the government established the TraHK Fund, injected stocks into the fund, converted it into an ETF of the Hang Seng Index, and then gradually opened it to the public for subscription, returning the shares to the market. This is also acceptable.
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1. The offshore RMB fell below 7.3. The exchange rate is currently the focus of the market. Foreign institutions generally expect that the RMB will depreciate sharply next year, but they predict that the exchange rate at the end of next year will be 7.5-7.6. We will not advance it to the end of 2024.
2. Many Chinese associations are calling on domestic companies to purchase American chips prudently to avoid possible restrictions and suppression in the future.
3. The world's largest diamond producer cut its prices by 10%-15%, the first significant price cut this year. Interestingly, the sector with the largest increase in A-shares today is artificial diamonds.
That’s all for today.