1. Alibaba Cuts Stakes to Raise Cash amid Regulatory Landscape
- Alibaba plans to sell 25 million Xpeng Inc. shares, raising $391 million, reducing its stake from 10.2% to 7.5%.
- It also trims GOGOX stake by 4.7 million shares, decreasing Alibaba's stake to 10.42%.
- China's State Council announces stricter rules for non-bank payment institutions effective May 1, 2024.
- Regulatory uncertainties may delay Ant Group's spin-off.
$BABA-SW (09988.HK)$ $Alibaba (BABA.US)$ $XPeng (XPEV.US)$ $XPENG-W (09868.HK)$ $GOGOX (02246.HK)$
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1. Yellen Pushes for US-China Stability Amid Economic Tensions
US Treasury Secretary Janet Yellen plans her second trip to China, emphasizing cooperation in non-sensitive areas like climate and money laundering. Simultaneously, the US Treasury targets Chinese solar panels and EV batteries with clean energy manufacturing subsidy rules.
$XPENG-W (09868.HK)$ $XPeng (XPEV.US)$ $NIO-SW (09866.HK)$ $NIO Inc (NIO.US)$ $NIO Inc. USD OV (NIO.SG)$ $JinkoSolar (JKS.US)$ $BYD COMPANY (01211.HK)$ $BYD Co. (BYDDF.US)$ $Tesla (TSLA.US)$
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$CSI 300 Index (000300.SH)$ $iShares MSCI China A ETF (CNYA.US)$
UOB KH report.
MSCI China now trades at an undemanding 12-month forward PE of 10.2x, or a 37.0% discount to Emerging Asia. This steep discount is unwarranted and they expect valuation to normalise in 2H23, backed by additional policy support. However, a significant rerating is only possible if credit growth accelerates; hence, their index target is at 74 points for now, implying 12.0x target PE. They prefer exposure to automobiles, co...