Alibaba-

Best Chinese Stock to Watch in September.

    Alibaba-Best Chinese Stock to Watch in September Although there is a lot of risk, the rewards can be great. Buying stocks in China these days is a little scary when you hear about the developments in the country. Government pressures, cancellations of public offerings and increased regulation are counted as developments that increase hesitations. These fears are heightened by the fact that accounting practices in Chinese companies lack the level of scrutiny found in other countries, creating an increased potential for fraud. The best example of this is the collapse of Luckin Coffee. These announcements raise concerns that Chinese companies may be removed from US stock exchanges. However, while these concerns have caused hesitation among investors, they also continue to offer the opportunity to buy stocks that have ridiculous growth potential and are already well-founded. When it comes to reviewing the overall risks of the industry, Alibaba (NYSE:BABA) is a Chinese stock worth watching this month.

Alibaba is up for sale

Alibaba is often referred to as the Chinese version of Amazon. In fact, it is the ninth largest company in the world by market value. As it is known, in April, regulators fined the company $ 2.75 billion, claiming that it violated antimonopoly rules. Therefore, it has proven how fundamentally sound the company's financial condition is, despite suffering huge losses.

Alibaba-Best Chinese Stock to Watch in September

The company even recorded $21,8 billion in sales, up 2% year-on-year, surviving the toughest part of the pandemic without interruption last year. Despite recent pressure, the company's business appears largely unaffected. There are many reasons that would make this company interesting. For example, the first is to approve a repurchase program for $15 billion of shares by 2022. Another is that the Management has recently promised to invest close to 15.5 million in technology innovation, economic development, high-quality job creation, care for vulnerable groups, and the establishment of a "joint welfare development fund". Even if investors weren't happy with the idea, it could help its reputation with Chinese regulators.

Making the right choice according to the risk level

As is known, the environment in China is not very friendly to big companies these days. It is very difficult to predict what the regulators will do in advance. So there is risk in China even for the longest-term investors. But looking at Alibaba's market share and raw numbers, this tech company is very likely to remain dominant.  

Source: The Motley Fool

 

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