By: Dividend Sensei
Chinese tech stocks have gotten crushed, and BABA is down 54% from its highs due to steady deteriorating in its fundamentals and regulatory outlook.
China’s government is potentially preparing to ban all future foreign tech IPOs, cutting off $46 trillion in growth capital through 2030, $5.8 trillion per year.
China’s new policy towards tech innovation appears focused on top-down government-sponsored investment at the expense of tech entrepreneurs.
All Chinese Tech stocks are now extremely speculative, 1% or less max risk cap recommendations, and Fallen Angel “holds” regardless of valuation.
Alibaba’s fundamentals have deteriorated at a rapid pace. Its growth outlook has been cut in half, and its speculative hyper-growth thesis is now broken.
Those comfortable with its extreme risk profile might still benefit from 90% to 285% returns over the next five years.
However, for most growth investors, there are safer reasonable-priced hyper-growth opportunities, that are expected to deliver far better long-term returns, which I showcase in this article.