Barron's Rings the Bell on Tech and China

They suggest buying stocks such as Alibaba.

Short Spec: Alibaba

Internaitonal Business Times: China CCP to Nationalize Jack Ma's Alibaba and Ant Group - Report

Could be bullshit, but lets go to the chart.

I highly doubt the government would pay the market price in a nationalization. Whatever they offer, if anything, is what you get. They'll also probably hit the company with massive fines or crimes such that they can knock the price down.

No opinion on this happening, in fact I'm a skeptical of the claim. Out of the money put looks like the best way to play. I don't think it would happen before Spring Festival, so a March put would be the earliest. I'd wait to time it as close to the news as possible unless I was generally bearish on tech shares.

Alibaba: A Serious Threat?

Jack Ma is a threat because he is a folk hero and a symbol of the New China. If this is a legitimate anti-trust action, the government fears bad press. If this is more of an unjust prosecution, the goverment may fear triggering capital flight, human more than financial.

ZH: Beijing Orders "Severe And Unusual" Media Censorship Of Alibaba Anti-Trust Probe

Alibaba and Ethereum

I made note of this in the recent post on cryptos, but here's Alibaba and Ethereum on the same chart.

Ma Yun Not Retiring, Will Oversee Transition Period

Ma Yun will resign his CEO duties, but remain on Alibaba's board.

iFeng: 阿里巴巴最新回应确认：马云不会“退任”或是“退休”！

The South China Morning Post quoted a spokesman for Alibaba as saying that Ma Yun is still the chairman of the board of directors of the company and will provide a transition plan for a long period of time. The spokesperson said that the New York Times reported that Ma Yun’s statement of “retirement” was actually wrong.

Alibaba told reporters that "the content of the South China Morning Post is no problem," but it is unable to provide more information.

SCMP: Jack Ma to unveil Alibaba’s succession plan, paving the way for younger talent to take over

An Alibaba spokesman said Ma remains the company’s executive chairman and will provide transition plans over a significant period of time, contrary to a New York Times article that said he was “stepping down” to “retire.” The Times story was taken out of context, and factually wrong, the spokesman said.

According to Alibaba’s annual report filed with the US Securities and Exchange Commission, Ma is a lifetime member of the Alibaba Partnership, a group of 36 senior managers who are responsible for maintaining the mission and culture of Alibaba.

“I sat down with our senior executives 10 years ago, and asked what Alibaba would do without me,” Ma said in an interview with the South China Morning Post, which Alibaba owns. “I’m very proud that Alibaba now has the structure, corporate culture, governance and system for grooming talent that allows me to step away without causing disruption.”

China ETFs, Tech Stocks Looking Plungy

The bottom chart is the 3X Daily Inverse China fund, YANG.

Here are some tech-related China stocks listed in the U.S. Alibaba (BABA), CTrip (CTRP), Fang Holdings (SFUN), Weibo (WB) all display topping patterns, Jingdong (JD) and Netease (NTES) already breaking down.

Chinese Logistics

Marc Cuban linked to a tweet that goes to a blog post about China. It's negative on Alibaba (BABA).

@realDonaldTrump did you realize that 5pct of the increase in stock market value ($250Billion) and 7.5x our Monthly Trade Deficit w China has gone to one Chinese company? https://t.co/CE5aXcAamH

— Mark Cuban (@mcuban) November 22, 2017

Some of the article I can't take a view on because I'm not up to date on all of Alibaba's business moves. However, it seems like the analysis is resting a bit on this photo:

Anyway, while I was traveling, I had a chance to peruse the Alibaba September Quarter figures, Press Release, 6K, Investor Presentation and of course, took some time to listen to the always entertaining Investor Call. Shortly thereafter, Alibaba had reported their amazing "Singles Day" sales figure of $25.3 Billion of fake GMV.

To put this figure in perspective, this year, "Singles Day" GMV came in at just a few billion more than the annual revenue of Sears/K-Mart (140,000 employees and 1,500 locations world-wide)..... again, I'll repeat that..... Alibaba sold, shipped and delivered the annual, global, sales volume of Sears/K-Mart in just one day! ....800 Million orders to deliver! Incredible! Bravo!.....all those guys on the tuk-tuks, scooters and bicycles must be exhausted......

The Alibaba business model has triumphed once again. It's now obvious that UPS, FedEx, DHL, et al, have it all wrong. Why in the world would anyone invest in all of that expensive GPS, scanning, package tracking automation and logistics hardware when you can just dump your packages on the sidewalk and let homeless people figure out how to get them where they are supposed to go? Again, the wizardry of Alibaba's ecosystem has rewritten the global-logistics playbook. Absolute genius....

I don't know if the logistics have improved over the past few years, but the Chinese post office was not a bastion of efficiency. The worst I'd ever seen was a guy standing in a sea of mailbags, packages everywhere, total chaos. It looked like a bomb went off. I gave him my claim ticket and he went back to find my package, and emerged with it after several minutes. The "private" delivery services are more efficient. I've seen scenes like the above, but in every case I can remember, it was outside of a main delivery area, such as outside the gates of a university or office building. Often, the students or office workers came out to pick up their package.

I'm positive Chinese delivery companies and the Post Office could increase efficiency. But what looks like total mayhem from the outside somehow manages to get packages where they're going.
1. Sell 800 million packages
2. ???
3. Customers receive their packages

The ??? is incredible amounts of human labor.

Amazon sold nearly $3 billion during its PrimeDay sale in July. Amazon is about as large as Alibaba (similar share of online sales). Unlike in the U.S., however, Single's Day is more like Black Friday and PrimeDay rolled into one. One firm estimated $4.7 billion in Amazon sales from Black Friday through Cyber Monday last year. Alibaba's claim of $23.5 billion in sales looks inflated even if those sales are all rolled into one, assuming some big ticket items aren't in the mix. (Did they offer deals on foreclosed properties and bad debt?)

Jack Ma: Next 3 to 5 Years More Difficult Than We Imagine

Update: SCMP has English coverage here Hard times ahead for China’s economy, says Alibaba tycoon
iFeng: 马云：未来三到五年 经济形势会超乎想象的艰难

First, Trump is very smart, the next six months are extremely critical

I think we can not underestimate Trump, he was elected president of the United States is not a coincidence, I think is a necessity. Today's world situation, the US economic situation, the birth of such a president, to believe that such a big country in the United States, we should believe that the American people, I believe they elected such a president, to give Trump a little time, there will be transformation. We have a very good exchange this time, explored the Sino-US relations, discussed the development of enterprises, after all, we are all businessmen in business. In short, we talked a lot about economic issues, the views of Sino-US trade, and how to develop the economy.

I am optimistic about the overall Sino-US trade relations, but there will be contradictions, there may be future trade conflicts between China and the United States, if not dealt with properly, may lead to a larger trade war. But if the trade conflict, both sides are not good, bad for China, the United States is not good, the global economy is not a good thing. But I want to tell you, Trump is still relatively open, listening to some of my views and views. I think the world is looking forward to Trump, his speech style, style of work, but with the past, we imagine the politicians do not like it, he saw a lot of problems in the United States today, but he hopes to use different ways to solve these problems. However, he is a businessman, his action is still very strong, the result is very strong. But we feel his routine is not the same as every other leader in the world.

I think the next six months is extremely critical.

He talks about Davos next, before moving on to China's economy:

Third, the transformation and upgrading must be slowed down

In addition, we look at how China's economy today? I have said many times, the Chinese economy over the next three to five years or less, I am not optimistic, and I think the economic situation will be more difficult than we imagined. This is normal, three decades of rapid development can not be sustained. I used to talk about an example, the growth of people, before the age of 20, there may be a long, each year 8% and 9% growth, but after the age of 20, each year is not more than ten centimeters long May, and long must be the head, the quality, not the number is long. China's economic growth at this time there is a moderate slowdown, about 7%, but my view is still too fast. Such a large volume, there is a 4%, 5% growth is also quite scary. So to maintain the quality of the growth of China's economy is a sign of health. Do not think 6% slow down, and today the world today, no country in such a large second-largest economy to maintain more than 6% growth, I think it is quite remarkable.

...Now we must transform and upgrade the country, the transformation and upgrading is equivalent to turning the corner when the speed of the turn must be slow, I think transformation and upgrading must be slowed down.

Fourth, business needs to do business rather than investment promotion, anti-corruption creates a good business environment

We are now fighting corruption, we appear to be short-term pain. China's economy in the past two to three decades of rapid development, basically to the county party secretary, to the party secretary, to the municipal party committee secretary at this level to comprehensively promote. But now it seems that many places, due to the extensive economic development of the past three decades, many anti-corruption, the government-driven economic slowdown, the short term appears to be pain, but the long term, for all of us Zhejiang , For all Chinese enterprises to establish a good business environment. In fact, we particularly hate bribery, with relationships, with a variety of money, resulting in social injustice, I believe that today's price, in ten years later we have the opportunity to engage in the country's economy. I ran more countries, I listen to more things, more people contact, I feel more and more deep, China is Fortunately, at this time a strong anti-corruption. Many countries actually very terrible, we Taobao sellers to other countries, one hundred mobile phones into the time, only 87, there are 13 customs removed, and very terrible, those corrupt, all the way In the past, I did not mention the names of these countries, whose names were all very big, but the corruption was more serious than anyone imagined. Corruption in these countries would certainly cost the country's long-term economy a great deal.

Fifth, when the storms rise up, the strength of the captain is extremely critical

The good news is that everyone is the same, no one is good, the United States is not good, Europe is not good, the world is not good, the economy is not good in three to five years, to tell you a bad news, China is not good, this time, the most important thing is the spirit of entrepreneurs. I feel that when the economic situation is not good, is to consider the key moment of good entrepreneurial spirit.

Alipay May Link Up With UnionPay

Economic observer has the scoop. It appear to be a move of weakness on the part of UnionPay, considering it has been losing total market share as commerce shifts to online and into the realm of online payment systems such as Alipay.

EO: 重磅独家！淘宝或向银联开放支付通道 敌对13年后首次“握手”

Recently, the Economic Observer Online obtained from people close to the two sides confirmed at Ali and UnionPay Online NOW negotiate negotiating issues Taobao payment channels open, but the details remain to be determined.

Alipay and China UnionPay rivalry heats up
Alibaba's Ant In Offline Challenge to UnionPay, Visa
AliPay and TenPay set for clash with UnionPay
Online threat to China's UnionPay outweighs foreign card rivals

Chinese bank card operator UnionPay, which may soon have to defend its near monopoly against Visa and MasterCard, faces a much bigger threat from online payment providers such as Alipay, and is upgrading its systems to meet the danger.

Battle Between Wechat Pay and Alipay

FINTS: Online battle upgrade between Wechat Pay and Alibaba

Tencent nearly doubled its mobile-payments share to 20% in 2015 from 11% in 2014, while Alipay’s market share fell to 68% from 82%. Despite the growth, Tencent’s payment business has not gained a profit, while Alibaba’s affiliate Ant Financial Services Group declined to say whether its payment business has been profitable. On the other hand, Tencent stated that it would continue to invest in WeChat Pay since it expects revenue to come in the future.

SCMP No Longer Has Paywall

Alibaba has dropped the paywall at SCMP.

Alibaba Tries Healthcare

Caixin: Alibaba Blazes a Trail with Online Health Care Pilot

Villagers in the central province of Hubei recently spoke with doctors hundreds of kilometers away through the Net and then had prescriptions delivered to their doors as part of China's emerging Internet health care service.

Like many fishing villages, Hongshiyuchang has poor public transportation and is far away from major public hospitals. Villagers usually have to spend hours on a bus to get to doctors in nearby cities, but now these isolated villages are having some of their health care needs met by Internet companies.

On January 18, a pilot launched by the e-commerce giant Alibaba Group Holding Ltd. in Hongshiyuchang attracted many villagers who wanted to test out the new medical service. One villager, Hu Tianshun, said that after making a reservation and putting details of his health history online, he was interviewed by a doctor in Wuhan, the capital of Hubei, in a video call. After the diagnosis, the doctor placed an electronic prescription so Hu could order medicine in Alibaba's online shops. Hu got his drugs the next day, and completed the transaction by paying the deliveryman.

China Races Ahead In Financial Innovation

Bloomberg: A Hundred Apps Bloom in China as Millions Bank on Their Phones

Financial innovation is bubbling up around the globe, but China is where digital banking, investing, and lending have gone mainstream. Technology companies armed with financial apps are challenging banks and other intermediaries for a market with 1.3 billion people and $7.8 trillion of deposits. Tencent’s WeChat (called Weixin in Chinese), Alibaba’s Alipay arm, and Baidu are leading the way with digital wallets that let consumers manage their money via their phones.

“Financial innovation is being discussed everywhere—in New York, London, San Francisco, Hong Kong,” says Zennon Kapron, managing director of Shanghai-based consulting firm Kapronasia. “But mainland China is where it has gone beyond talk and is really having an impact. What we’re seeing here is the future of global banking.”

...Song Fuqiang, who lives about 370 kilometers (230 miles) from Beijing in Hebei province, owns a textile business and uses Alipay every day. The 31-year-old has even put about 40,000 yuan into Alibaba’s money market fund, Yu’E Bao. “Checks are so outdated, so few people use them,” he says. “I don’t bring money when I go out. I use Alipay to pay for everything.”

The irony is China is probably the least friendly to banking competitors because the industry in mainly state-owned. While these firms may do well, the government will tilt the playing field in favor of the SOEs.

NYT: Disney, Time Warner and Other Media Shares Fall as Investors Worry About TV’s Future

Wal-Mart Going After Alibaba? Buys Rest of Yihao

WSJ: Wal-Mart Takes Full Ownership of Chinese E-Commerce Venture Yihaodian

Wal-Mart Stores Inc. said it has taken full ownership of Yihaodian, its Chinese e-commerce venture, solidifying the online retailer as a central part of its strategy in the region.

Earlier this month, the co-founders of Yihaodian announced their departures, adding to speculation that Wal-Mart planned to add to its then-51% stake in the online retailer.

“With full ownership of Yihaodian, Walmart plans to invest in both accelerating e-commerce and creating a seamless experience for customers across online, mobile and stores,” the company said in a statement.

Wal-Mart acquired the remaining Yihaodian shares from Ping An of China, a financial services group, and the co-founders, former Chairman Yu Gang and former CEO Lui Junling, who both left earlier this month. Lu Wang, president and CEO of Walmart Global eCommerce in Asia, will lead Yihaodian as part of his overall executive responsibilities, Wal-Mart said in a statement.

iFeng: 沃尔玛全资控股1号店 或成国内电商巨头？

This article asks if Wal-Mart will challenge Alibaba: 沃尔玛全资控股1号店释放什么信号：挑战阿里？

As the world's largest retail chain giant Wal-Mart has not given up trying to e-commerce.

According to Wal-Mart's Chinese official website shows, in June 2011, Wal-Mart officially launched the e-commerce market in China trip. However, if from a business perspective, 2006 Wal-Mart tried briefly in the domestic electricity supplier channels, but soon abandoned.

December 2010, Wal-Mart's Sam's Club launched online store. According to insiders, when Sam's Club online store using the Wal-Mart headquarters in San Francisco, has developed a global digital commerce platform for two years, after a relatively small scale to test the water, Sam's Club, Wal-Mart supermarkets do again electricity supplier platform will be relatively easy. Statistics show that in 2010, Wal-Mart told the media published the "diversified development in China, is developing e-commerce platform, in order to meet the rapid growth of online shopping needs." In October 2012, when he was vice president of Wal-Mart China area 廖红晖 in the 2012 China Retail Summit said that Wal-Mart has recently launched in China's e-commerce platform, and it as the company's new business growth.

Although not succeeded to establish their own business platform, Wal-Mart in 2012 also timely replenishment of the 1st shop, hands still held electronic business platform resources. Until last week the completion of the 1st round to take over the store, Wal-Mart five years to complete the layout of China's electricity supplier, namely hypermarkets O2O speed internet shopping, electronic business platform on the 1st store and Sam's Club stores and online store App.

Increase in e-commerce channel is considered to be the Wal-Mart in China, an important breakthrough business growth, restructuring the firm and quite urgent for Wal-Mart China, the No. 1 store operators to recover their own hands, coordination of resources is the only way.

Wal-Mart is the world's largest retail company, is the second largest after the Amazon's online retail business, but Wal-Mart's online business in the United States, only 1/7 of the Amazon. Because of weakness in the US consumer market, competitors continue to catch up with Amazon, Wal-Mart campaign which inspired China's ambitions.

And the development of the electricity business operations in China, will have to head-on collision with the electricity supplier boss Ali Baba.

In fact, this competition is not a simple challenge Wal Alibaba, Alibaba challenge also includes Wal-Mart.

As the world's largest chain of retail giant Wal-Mart has been a tyrannical parties want to replace objects. Alibaba Group's new CEO Yong May this year, within the General Assembly, said Ali turnover this year will be more than Wal-Mart world, to become the world's largest retail platform.

Ali seems, Wal-Mart may be the real opponent.

...In the second visit of the communication session, Dongming Lun said that with the development of electronic business, future business model will change on the 1st shop; online and offline integration is the trend, only if each format developed very good case can be better integration between the two. The industry have speculated that Wal-Mart next will further promote the integration of the 1st and Wal-Mart stores.

Maybe The Federal Reserve Can Sell Hotels on Ebay?

Alibaba courts more China bad debt managers for online auctions

Huarong Asset Management Co Ltd is poised to become the second Chinese bad loan firm to auction soured loans online amid a push by the government to settle these debts as the economy slows, an executive at e-commerce giant Alibaba Group Holding Ltd said.

...At least 14 financial institutions, including China Merchants Bank Co, China Minsheng Banking Corp and Tianjin Financial Assets Exchange use Taobao to sell cars, real estate, wineries, factories, corporate shareholding, and land, the website shows.

Courts and local authorities are also using the platform to sell assets: this month, the Shaanxi provincial government sold 171 cars confiscated in a nationwide corruption crackdown for just under 9 million yuan. The sale attracted nearly 7,000 bids.

Earlier this month, Taobao also put up for auction a 16-century Italian castle and 103 apartments in Milan as part of a joint-effort between Alibaba and the Italian government.

Wal-Mart + Alibaba = Nuclear Fusion

Wal-Mart to accept Alipay in a bid for growth in China

Wal-Mart Stores WMT -0.21% is teaming up with Alibaba BABA -0.65% to roll out the Alipay mobile payment service in China — its latest move to increase sales in a tough, but potentially lucrative international market.

Ant Financial, a financial affiliate of Alibaba, said on Wednesday that the partnership with the world’s biggest retailer would start with 25 stores in Shenzen, including one of its Sam’s Club locations, and be accepted at all 410 Wal-Mart stores in China by the end of the year.

The tie-up with China’s leading e-commerce company comes as Wal-Mart looks to dramatically improve its performance in the world’s most populous country. Last quarter, Wal-Mart’s net sales fell 0.7%, while comparable sales, which strip out the effect of newly opened or closed stores, were down 2.3%. Wal-Mart has grappled with the perception in China that its prices are not the lowest, among other challenges.

Yu Fenghui dubs the link-up "nuclear fusion:" 沃尔玛与支付宝要发生“核聚变”. He says this opens the door for Wal-Mart eventually using Alipay in all of its stores around the world and, if Apple Pay doesn't cooperate with Alipay in China, the Wal-Mart deal puts Alipay one step ahead of Apple.

Alibaba and Tencent Battle Over Hongbao

Caixin: Not in Holiday Spirit: Alibaba and Tencent Spar over Virtual Hongbao

Internet giants Tencent Holdings Ltd. and Alibaba Group Holding Ltd. have gotten into tussle over the giving of virtual hongbao, or red envelopes.

Giving hongbao to relatives and friends for Spring Festival, also known as Chinese New Year, is a tradition that most Chinese people enthusiastically follow.

Tencent put a spin on the old custom last year, when it allowed users of its popular WeChat messaging app to send each other virtual hongbao that added real money to their bank accounts.

Alibaba also allowed users of its Alipay payment service to give and receive red envelopes online, but the feature was not nearly as popular as WeChat's. Jack Ma, Alibaba's chairman, said this setback was his firm's "Pearl Harbor moment" and called for better defense of what has been viewed as Alipay's territory – mobile money transfers.

This year the two firms are blocking each others' hongbao on their platforms.

Caixin called WeChat and QQ, and both said their refusal to accept Alipay hongbao was fair because Alibaba has a longstanding policy of not accepting payments from Tencent.
"We hope to have cooperation from a fair and mutually beneficial perspective," a QQ spokesman said.

Why did QQ block Alipay hongbao, Caixin asked?

"We'll talk about this after Alibaba lifts its ban on (Tencent) platforms," the spokesperson said.

WeChat's reply was similar.

Alibaba's websites, including the popular shopping sites Taobao and Tmall, do not allow shoppers to use Tenpay, Tencent's payment system, or WeChat to complete transactions.

WeChat, in return, blocks all Taobao and Tmall links. Stores on WeChat cannot accept payments from Alipay either.

China Real Estate of Affiars

Recent stories from Mingtiandi.

SOCAM SLASHES CHENGDU PRICES BY 30% IN SCRAMBLE FOR CASH

Socam Development, an affiliate of Shui On Land cut prices by 30 percent at a housing project in central Chengdu last week as the troubled real estate company struggles against slumping sales and falling prices.

YUEXIU PROPERTY PLANS $495M RIGHTS ISSUE IN CHINA CASH CRUNCH

Yuexiu Property announced last week that it plans a HK$3.84 billion ($495 million) rights issue, becoming the second major Chinese real estate developer in a week to turn to the equity markets as slowing home sales continue to squeeze the country’s property companies.

CENTURY 21 REAL ESTATE NOW SELLING HOUSES ON ALIBABA’S TAOBAO

Century 21 China, which is a franchise of the well-known US chain, last month joined a number of other large real estate agencies in pulling their listings from China’s biggest real estate website, Soufun.com. The boycott of the giant real estate site was sparked by disputes over what the agencies termed unfair pricing by Soufun.

In the announcement of its new tie-up with Taobao, however, Century 21 only wanted to talk about the future.

Taobao Shoppers Can Buy Vanke Homes At Discount

A unique promo:
Vanke Offers Alibaba Shoppers Up to $325,000 in Home Discounts

China Vanke Co., the country’s biggest developer, teamed up with Alibaba Group Holding Ltd. to offer discounts of as much as $325,000 to home buyers who also shopped on the e-commerce company’s Taobao Marketplace.

Vanke will grant discounts of 2 million yuan on select properties if the home buyer spent more than 2 million yuan on Taobao in the last year, according to a statement on Taobao’s website. Spending one yuan makes buyers eligible for a 50,000-yuan rebate.

After Failing to Sell at Court Auction, House To Be Auctioned For 66% of Value on Taobao; What Else Can You But at Taobao Court Auctions?

Looks like Alibaba could rake in some dough if China sees a major foreclosure wave. A boss in Suzhou couldn't pay his mortgage and the court auction failed after two rounds. Now the Suzhou villa will be auctioned later this month on Taobao, for 66% of its appraised value.
苏州一老板无力还贷 千万别墅遭六六折拍卖

471 sqm villa
Appraised value: ￥14,860,000
First round starting price: ￥15,300,000
First round bids: 0
Participants: 2800

Second round starting price: ￥12,250,000
Second round bids: 0
Participants: 1600

Third round starting price: ￥9,800,000
Location: 司法淘宝 Taobao Court Auctions

There are sites for every province in China, but Wenzhuo (3800+ properties), Hangzhou (2800+ properties), Ningbo (2400+ properties), along with Suzhou (1700+ properties) appear to be the most active pages.


Here's the Zhejiang site if you want to buy some Chinese foreclosures.

How about this car dealership in Ningbo for ￥29 million, 35% off appraised value?

Here's Wenzhou's page.

Lots of empty apartments being auctioned in Hangzhou. Maybe a developer went bust, or a big investor, since many of the apartments on the first page appear to be in the same building.

How about trademarks? They're up for auction too.

How about a giant pile of coal (550 tons) in Suzhou for ￥292,000?

Or do you want to buy your shirts by the ton?

Some land in Sha county, Fujian.

Factory Equipment

This ￥6 million villa in Chun An county, Zhejiang looks nice.

How about 1,745,612 shares in the Xiamen Rural Credit Union?

How about your own Home Inn in Shanghai?