In expectation of a quick rebound of quotations – probably not.

The reasons are as follows:

It is not the fact that the company’s quarterly results will impress the market and cause a rise in quotations. At the end of last year there was a slowdown in retail sales growth in China, in December this indicator grew by 1.7% (y/y) – the lowest value since August 2020. Weak consumer demand is likely to have a negative impact on Alibaba Group’s results.

Alibaba’s rollout of seller support measures could have a similar effect in the short term.

The other day, Alibaba registered an additional 1 billion ADRs. The market speculates that Softbank may reduce its stake in Alibaba. Or that the new securities may be part of an employee incentive plan. In any case, the placement of 1 billion ADRs in addition to 2.7 billion ADRs in free float will put significant pressure on Alibaba quotes.

China’s market regulator remains determined. The intention to strengthen anti-monopoly laws is emphasized in the recently published 5-year plan to modernize market regulation. Today, Renmin Zhibao, the mouthpiece of the CCP, published another article condemning the “indiscriminate expansion of capital.” Meaning, of course, the capital of Internet giants.

The regulatory story is far from over, and this could still deter foreign investors from returning to Chinese tech stocks.

Despite these factors, Alibaba continues to be an interesting idea in the long term for investors who are ready for increased risks. The key uncertainty remains the tightening of regulatory policy in China.