twinkle5
10-17

$Alibaba(BABA)$

Kuaishou and Alibaba are both in my portfolio. The downside risk for Kuaishou is minimal due to share buybacks, future predictable profits, and high return on equity (ROE).

Of course, the downside risk for Alibaba is also limited. Personally, I believe Kuaishou has greater upside potential.

An important value logic for Kuaishou that has been overlooked is its high ROE. Moreover, the profits are in pure cash, with almost no inventory and bad debts, or provisions.

Assuming a profit of 16 billion this year and 20 billion next year, this year's ROE would be 16/49 = 32.65%, and next year's ROE would be 20/65 = 30.7%.

This ROE is very impressive. Even if it falls to 20% in the next 3-5 years, it would still be excellent. Looking at the liquor industry as a reference, which also has cash profits and no issues with bad debts, provisions, or inventory, it has shown long-term stability and growth.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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