No. of Recommendations: 3
It's been a rough two years for Alibaba. November 2020, the Chinese government canceled the IPO of Ant Financial, triggering the start of a long decline in share price from its Oct 2020 high of $317 to ~$63 Oct 2022. The government followed up with a hefty fine on Alibaba in April 2021 for monopolistic behavior, and a mandate that the company re-orient its business practices to more benefit the population. Covid lockdowns and supply shortages contributed to a big slowdown in sales growth and a big decline in GAAP income.
Perhaps the clouds are clearing, though, and robust growth will resume? China abruptly reversed its Zero Covid policy, so that drag on the economy should be somewhat in the past, though ongoing spread of the actual disease could continue to disrupt the Chinese economy this year. There have been various news reports over the last year that the government is warming back up to Alibaba, and there's more news today:
https://finance.yahoo.com/news/alibaba-signs-coope...[BABA] has signed a cooperation agreement with the government of Hangzhou, the city where the company is headquartered ... at the signing event, local authorities formulated specific measures to help develop the online platform economy...
On Monday, Guo Shuqing, Communist party chief of the People's Bank of China, was quoted by state broadcaster CCTV as saying that rectification of the financial business of 14 online platform companies has been "basically completed," though he did not name any companies.
Also, in BABA related news, Jack Ma is releasing control of Ant Financial, which may be good for prospects of a future IPO.
