Friends today we will talk about the stock market in China. Recently, a serious decline in Chinese shares was observed.

And despite the growth of 20-30%, which occurred on March 16, they are still very cheap.

Alibaba at the moment traded cheaper placement prices - about $ 88. At the moment, Alibaba shares cost about $ 102 (we are talking about depositary receipts that are available to most Russian investors). Alibaba shares themselves are trading in the Hong Kong Stock Exchange.

Many investors are afraid of the delising of Chinese shares from the New York Stock Exchange. It has already been known that until 2024 there will be forced delising. Since Chinese companies do not fulfill the requirements that have advanced the US Securities Commission.

And according to Chinese legislation, it is impossible to fulfill these requirements (Chinese companies do not have the right to disclose their reporting).

It is the fear that the Chinese shares will stop bargaining on the New York Stock Exchange in 2024 (or earlier), pulls the shares down. Shares have been in a downward trend for about 1.5 years.

In fact, there are many reasons for such a fall. The most important is, of course, the regulation of the Chinese IT-Giant Communist Party. On 2nd place there is already a delising, and now this problem is sharpened again.

If suddenly the stock is delivered, then you cannot sell them, that is, they will hang them until the Hong Kong Exchange is open.

The possibility of buying Chinese shares in the Hong Kong Stock Exchange is only at customers Finam and BCS (if I'm not mistaken).

In general, there is nothing catastrophic in the delisting of Chinese companies with the American stock exchange.

What is the main reason for the last reduction in Chinese shares? The most important reason is the possible support of Russia from China.

You ask, and what is here, well, China will help economically, Chinese banks will work with Russian companies, etc.

But in fact, if China really went to the rescue to Russia, the United States could impose a number of harsh sanctions on Chinese companies.

And since China is a key trading partner for the United States, China itself values ​​US relations and is not going to spoil them because of Russia.

They, so, there are problematic issues where tough disagreements are observed (the same Taiwanese question).

Therefore, most of the major Chinese banks also joined the sanctions - closed accounts for Russian companies and stopped in general all the work with Russia.

Perhaps the hopes of Putin on the fact that China will somehow help us, they were not fully justified. And on March 16, Chinese shares switched to rapid growth due to the fact that Chinese officials stated that they were not threatened by sanctions from the United States because of Russia.

Perhaps the United States somehow succeeds to prove that China helps Russia, but in any case, it is unlikely that these are some strict sanctions. Since China does not help in key aspects.

At the same time, China has always opposed illegal unilateral sanctions against Russia. However, China will do everything so that these sanctions themselves do not touch them.

China says they for peaceful settlement and will contribute to negotiations. That is, China does not support neither the other side.

When we are talking about Chinese promotions (in particular about Alibaba). She has a rather essential share of the Russian market. And now, when many online shops left Russia, etc., it is possible that Aliexpress will only benefit from it.

Although Ozon's Russian sites, Yandex.Market, etc., still compete and are not going to leave anywhere.

Another problem that led to additional correction is a new flash of the virus in China. But there is nothing terrible in this, it's all temporary.

💥alibaba.

Currently, the payback of the P / E - 26 business (high enough), since, the last few quarters were quite low profits (due to fines)

In 2023, business payback will be 10.6 years old, that is, the company underestimated by about 3 times on American competitors.

Despite the fact that Alibaba has a very low long load, that is, cache is 2 times more than debts. That is, the company is stable, reliable and fast-growing.

Of course, her growth prospects have slowed a little (the company's profit will not grow as before - by 25-30% per year). The level of 15% per year is predicted.

The fair value of the stock at the moment is approximately $ 250-260 (+ 160%), taking into account the current geopolitical risks, the risk of possible delising and slowing the growth rate.

Of course, Alibaba may continue to decline, but it has a long-term height drivers, it is a sustainable business, investment in new areas, for example, in a cloud business that is now rapidly developing.

💥jd.com.

JD is the electronic commerce sector. But unlike Alibaba, this is not a marketer, and the online store with its own delivery system.

By the way, the JD corporation has a separate company that recently entered the IPO - JD Logistic (deals directly delivery).

In addition, the state use the JD platform to test the digital yuan. And in general, a lot of factors indicate that China's Communist Party in good relations with this company.

Therefore, JD shares relative to other Chinese companies fell less. From its maxima in 2021, the stocks rolled out only by 40%, unlike Alibaba, which rolled back by more than 70%.

Of the minuses it is worth noting that JD is unprofitable. And in this quarter, the company demonstrated losses that were formed as a result of the growth of operating expenses.

The company's management hints at the fact that the rapid growth of revenue will not have to wait, there will be some slowdown. Because of this news, the company's shares fell by 40% in March (now bounced).

The company's business is extremely promising, the company has a good financial sustainability and a very large market share. Competition is constantly withstanding the company, and the market share is gradually increasing.

Chinese market growth 💥ders

The header of growth driver is a decrease in the key bet in China. The first decline was made in January.

Perhaps further China will continue to somehow stimulate the economy. Because China earlier than the United States began to turn the incentives of super might-dimensional monetary policy and tighten the DCT.

And when the bet will be reduced, the capital flows can occur from American high-tech companies in undervalued Chinese.

The factory growth driver is the election, of course, Xi Jinping. It is possible that the Chinese People's Bank will decide to this time that the shares have grown up, and the elections passed on the growing market.

There is also the most important risk - this is a Taiwanese question. China has repeatedly identified his position, saying that Taiwan considers part of China. And any attempts to help Tyavan authorities, China will consider violation of state integrity.

Against the background of the latest events in Ukraine, many are afraid of China's invasion of Taiwan. In the next 2 years, this will not be accurate.

The Chinese will not go against the well-armed island. Plus, the shortage of semiconductors is now observed. And most of the semiconductors are produced in Taiwan.

Therefore, it will be a long-playing song and shit it in a few years. Most likely, China will now prepare the ground so that people themselves are for joining China. And it is possible that in a few years we will see this joining.

As it will happen, it is not known, but China is unlikely to go for a military clash. Therefore, risks in this regard are not great.

Today, thanks for your attention!

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