Alibaba Stock: Russian Stocks Worth Pennies - Will Chinese Stocks Suffer The Same Fate?

seekingalpha2022-03-14

sbayram/E+ via Getty Images Investment Thesis The military aggression in Ukraine had multiple global implications on Russia, since they are the aggressors in the story. Despite the imposed trading ...

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SL1977
2022-03-14
SL1977
i don't read junk.
NPC69
2022-03-14
NPC69
K

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Despite the imposed trading ...</p>\n\n<a href=\"https://seekingalpha.com/article/4495244-alibaba-russian-stocks-worth-pennies-will-chinese-stocks-suffer-same\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK1517","symbol_name":"云办公","start_time":0,"source_url":"https://seekingalpha.com/article/4495244-alibaba-russian-stocks-worth-pennies-will-chinese-stocks-suffer-same","article_id":"2219127196","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2219127196","pubTimestamp":1647262257,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"sbayram/E+ via Getty Images Investment Thesis The military aggression in Ukraine had multiple global","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK1517":"云办公","BK1502":"双十一","BK1608":"元宇宙概念","BK1575":"同股不同权","BK1584":"蚂蚁金服概念","BK1501":"阿里概念股","BK4531":"中概回港概念","ZLAB":"再鼎医药","09618":"京东集团-SW","HCM":"和黄医药","BK4534":"瑞士信贷持仓","QNETCN":"纳斯达克中美互联网老虎指数","BK4147":"半导体设备","BABA":"阿里巴巴","BK4533":"AQR资本管理(全球第二大对冲基金)","BK4007":"制药","BK4558":"双十一","BK4509":"腾讯概念","BK1588":"回港中概股","BK4535":"淡马锡持仓","BK4524":"宅经济概念","BIDU":"百度","BK4508":"社交媒体","BK4574":"无人驾驶","BK4538":"云计算","BK4527":"明星科技股","WB":"微博","BK4077":"互动媒体与服务","BK4526":"热门中概股","YUMC":"百胜中国","BK4579":"人工智能","BK4552":"Archegos爆仓风波概念","BK4122":"互联网与直销零售","BK4503":"景林资产持仓","BK4551":"寇图资本持仓","BK4207":"综合性银行","BK4502":"阿里概念","BK1521":"挪威政府全球养老基金持仓","ACMR":"Acm Research Inc.","BK1586":"云计算","BK4504":"桥水持仓","BK4209":"餐馆","BK4575":"芯片概念","BK1142":"互联网与直销零售","BK1591":"就地过年概念","BK4548":"巴美列捷福持仓","BK4514":"搜索引擎","BK4565":"NFT概念","BK4513":"直播概念"},"translate_title":"阿里巴巴-SW股票：价值不菲的俄罗斯股票--中国股票会遭受同样的命运吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ACMR":1,"ZLAB":1,"YUMC":1,"WB":1,"RNFTF":1,"HCM":1,"BABA":1,"BIDU":1,"QNETCN":0.6,"09618":0.6},"content_text":"sbayram/E+ via Getty Images Investment Thesis The military aggression in Ukraine had multiple global implications on Russia, since they are the aggressors in the story. Despite the imposed trading halts, multi-billion dollars' worth of Russian stocks is now worth pennies. However, we also believe that there are elevated tensions between the US and China, given its friendly military collaborations with Russia and refusal to impose sanctions on the latter, post-Ukraine invasion. With Russia asking for Chinese military assistance for the Ukraine war, the situation could also worsen moving forward. It is uncertain and speculative at best. However, we believe that sending military aid to Russia would expose Chinese economies to similar sanctions and significantly escalate the trade war between the US and China. Given the slow war progress for Russian advancement and the punitive economic sanctions against Russia, many also speculate whether China will take Taiwan by force moving forward. On a separate matter, five Chinese stocks could also be delisted if American regulators cannot review their audits for three consecutive years. The announcement timing couldn't have been \"better,\" given the particularly sensitive time and massive sell-off post Big Tech crackdowns in China since 2021. Since the Chinese law prohibits sharing of information with US regulators, we expect that all US-listed Chinese ADRs may be delisted from US stock exchanges in the future, assuming that US regulators take a hard line. We encourage you to read our previous article on BABA, which would help you better understand BABA's competitors and market opportunities in Cloud Computing. Alibaba: Cloud Service Will Likely Drive Its Revenue Growth Russian Stocks Are Worth Only Pennies Now The fall in Russian banking, oil, and gas stock Barrons Russia invaded Ukraine on 24th February 2022, prompting the closure of the country's stock market on 28th February, to prevent the total collapse of the Russian economy. Nonetheless, the damage has been done since many Russian stocks also hold secondary listings in London and the US. The destruction of market value in the Russian banking, oil, and gas industries is astonishing, given that they have declined by over 90% within days. By 2nd March 2022, many of these stocks are worth almost nothing, due to the massive shares dumping by many institutional and retail traders alike. For example, Sberbank (OTCPK:SBRCY), Russia's largest bank, crashed over 99% from $14 in February to 1 cent on 2nd March 2022, resulting in a record decline in market capitalization of 99.8% from $102B to $190M. Rosneft (OTCPK:RNFTF), the biggest oil company in Russia, also fell in disarray after falling in market capitalization from $21.99B to $9B, given how the country is the third-largest oil producer in the world, accounting for up to 10% of the global supply of oil. Schuyler Schouten, a sanctions law expert, and partner with Jones Day, said: It really is the case that the law today may not be the same as the law yesterday, or as what the law will be tomorrow. In the case of this current crisis, we are effectively seeing a year's worth of sanctions changes compressed into a single week. I think it's fair to say that this is a militarily, politically, and legally complex sequence of events, and that we are likely at the beginning. (yahoo!finance) In addition, the London Stock Exchange suspended the trading of 27 Russian companies, while others, including Deutsche Börse, the New York Stock Exchange, and the Nasdaq, followed suit. In an unprecedented move, these exchange markets are also removing Russian stocks from their primary indices and reclassifying them as \"Standalone Markets.\" The move could result in a permanent rut on the stock prices once the Russian stock market reopens moving forward. Consequently, investors in Russian stocks have literally seen their portfolios' value go up in smoke in recent weeks, dashing any hope of future recovery. With the US and UK already banning Russian oil and the impending ban from the EU, we expect Russia's oil stocks to fall further due to the reduced purchases moving forward. Despite the potential impact of rising global oil prices, many countries, such as Australia, have followed suit in the economic sanctions and bans targeting Russia. However, with half of the EU demand potentially diverted to China, there might still be hope for the Russian oil and gas industries, though we expect the Western world to be less forgiving. Based on the expanded discussions, China expects to increase the future natural gas pipeline capacity from Russia to over 100B cu. meters annually, to reduce its dependence on the US, Australia, Japan, and India. Nonetheless, given how it took approximately four years for Russia and China to complete its first Power of Siberia trunk pipeline, the former's immediate future is indeed highly uncertain. With Russia also potentially seizing and nationalizing foreign-owned companies and assets, we could also potentially be looking at a permanent exodus of international brands presence and investments in the country. Despite the mutually negative consequences, it is uncertain how long the international standoff will be given the ongoing war. Assuming that the Ukraine war lengthened to an insurgency similar to Afghanistan or Chechnya, we may expect Ukraine to exist as a \"nearly sovereign state within the Russian state,\" if Russia gains the upper hand. Thomas de Waal, a journalist who covered Chechnya in the 1990s, said: There was a project to restore Chechnya to Russian control, and nowadays in 2022, to restore Ukraine to the Russian sphere of influence. And there was no Plan B. Once the people started resisting, which came as a surprise in Chechnya and is coming as a surprise in Ukraine, there was no political Plan B about what to do with the resistance. (NPR) As a result, it is unfortunate, but we may have to bid adios to most, if not all, Russian stocks for at least the coming decade. Will Chinese Stocks Suffer The Same Fate? On 10 March 2022, the SEC identified five Chinese stocks which may be delisted by 2024, if American regulators are not given the free pass to conduct accounting audits for three consecutive years. These include YumChina (YUMC), BeiGene (BGNE), Zai Lab (ZLAB), ACM Research (ACMR), and Hutchmed (HCM). The US-China Economic and Security Review Commission has also compiled a list of 248 Chinese companies in danger of delisting, including the big three, Alibaba (BABA), Baidu (BIDU), and JD.com (JD). It has triggered a further decline in Chinese stocks, including BABA, which has also taken a massive beating of over 70% since the suspension of ANT's IPO in November 2020. The Holding Foreign Companies Accountable Act was passed by the US Congress due to an accounting scandal at Luckin Coffee in early 2020, which caused a massive decline in its stock valuations then. Back then, the US investors had little knowledge of any Chinese company's financials, which then raises concerns regarding any potential future crises. US-listed Chinese companies were then given the ultimatum, to preserve the accounting transparency requirements complied by other US-listed foreign companies. The delisting announcement couldn't have been timed better, given the particularly sensitive time surrounding Russian-China relations during the ongoing Ukraine war. Due to the Chinese government's prohibition, we expect all listed Chinese ADRs to be delisted from US stock exchanges moving forward. Naturally, it is also assuming US regulators will take a tough stance on the review question. However, it is also important to note that many major Chinese stocks, such as BABA, Baidu (BIDU), JD.com (JD), and Weibo Corporation (WB), have taken to dual listings in the HK exchanges since 2021, apart from the Nasdaq or NYSE listings. In addition, it had led KraneShares CSI China Internet Pacer Swan SOS Fund of Funds ETF|ETF to shift its focus to the HK exchange market, with only 34% listed in the US. China has not shown any qualms in its recent market correction in multiple sectors, from the Big Tech crackdowns, to the residential property market, new gaming rules, after-school tutoring services, cultural clampdown, and many others. As a result of these drastic regulations, consensus estimates that its GDP growth may decline drastically moving forward, from 8.1% in 2021 to potentially 4.3% in 2022. It is evident that China is indeed not shy from taking the hardline approach of \"sacrificing some short-term growth for greater long-term stability.\" As a result, we do not expect China to budge on its accounting review prohibition, given the long-term US-China mistrust. Nonetheless, if these ADR stocks are delisted from the US market in the future, investors' shares can still be converted into HK-based stocks with no decline in portfolio valuation. However, we do note that its trade volume is by far lower in the HK exchange market, though it could be due to its double listing, instead of due to the lower perceived value. As a result, we still encourage investors to view the Chinese stocks based on their fundamental metrics and future potential, instead of the linkage to the government ideologies. Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, said: We do not expect a material valuation discount if the companies move their primary listing location from the U.S. to HK, because the stocks' valuations would likely still be driven by the companies' valuation and earnings prospects, which are predominantly derived in China and therefore largely unaffected by this development. (Barrons) Alibaba's Stellar Performance Ahead BABA Projected Revenue and Net Income S&P Capital IQ BABA's future revenue and net income growth remain largely unchanged to our previous article on 4th March 2020. BABA is still expected to report healthy revenue growth at a CAGR of 14.5% over the next two years. Though it represented an apparent deceleration of revenue growth, its valuations have also declined by over 70% since October 2020. As a result, BABA stock looks attractive now, given its money-making potential. For FY2022, consensus estimates that BABA will report revenues of $135.1B, representing an excellent increase of 23.4% YoY. While its net income is expected to fall by -1.7% from FY2021 levels, it's still impressive at $22.5B. So, Is Chinese Stocks A Buy, Sell, Or Hold? Given how the Chinese leader is looking to secure his third term in office in 2022, we do not expect China to offer significant aid to Russia in the Ukraine war. It is similar to how the US President is unlikely to provide anything beyond economic sanctions to Russia, due to the upcoming midterms elections in 2022. As a result, no matter how the situation in Ukraine unfolds, it is unlikely both countries will jeopardize the delicate balance during such sensitive times. Moving forward, we acknowledge headwinds from the ongoing Ukraine war and the Chinese government crackdowns on its Big Tech companies. However, we could view it in multiple lenses: as a massive opportunity to add to the portfolios at near-bottom prices. As translated from the Chinese word for 'crisis' - Wei-ji: composed of two separate words, Wei means \"danger\" and Ji means \"opportunity and/or crucial point.\" Hence, the Chinese idiom of \"Every crisis could be an opportunity in disguise,\" though there is also another interpretation of \"A time when things start to go awry.\" As a result, entering the Chinese market during these volatile times also requires a tacit understanding that it could all go south. We believe that entering the stock market at any time, requires investors to strike prudently and decisively with clear-headed and risk-weighted plans. Managing a crisis properly will bring investors the opportunity to renew and reinvent their portfolios for long-term growth. For now, based on our estimates, Chinese stocks, especially BABA, remains highly attractive at current valuations, though of course, only for investors with a diversified investment portfolio, due to their higher risk level and volatility. In addition, due to the bearish market, BABA's stock price may further retrace in the coming weeks. As a result, conservative investors may choose to wait out the war, though we expect the stock market to recover before the war ends. On the other hand, investors who hold off buying anything now, may miss the boat. Therefore, we rate BABA stock as a Buy only for aggressive investors.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9032962648,"gmtCreate":1647263589489,"gmtModify":1676534209209,"author":{"id":"3577882033944507","authorId":"3577882033944507","name":"SL1977","avatar":"https://static.tigerbbs.com/846343ca761b93618fb0332b00e58af9","vip":1,"hat":"https://static.tigerbbs.com/f84d87792f02cf78e80ee34979fd31e5","crmLevel":5,"crmLevelSwitch":1,"idStr":"3577882033944507","authorIdStr":"3577882033944507"},"htmlText":"i don't read junk.&nbsp;","listText":"i don't read junk.&nbsp;","text":"i don't read junk.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9032962648","repostId":2219127196,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9032984257,"gmtCreate":1647262329933,"gmtModify":1676534208952,"author":{"id":"3584779133668268","authorId":"3584779133668268","name":"NPC69","avatar":"https://static.tigerbbs.com/47e7ac55312ae8dd1c9e7cb92adad089","vip":1,"crmLevel":6,"crmLevelSwitch":0,"idStr":"3584779133668268","authorIdStr":"3584779133668268"},"htmlText":"K","listText":"K","text":"K","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9032984257","repostId":2219127196,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":3,"commentSize":2,"repostSize":0,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2219127196"}