Today, I sold a partial stake of 1,800 Alibaba HK shares. It marks the end of a position I held for approximately four and a half years — and not in the way I had originally envisioned.
At an average cost of around HKD 142, it’s ironic that after such a long holding period, I still have a realised -1% loss.
What Made Me Decide to Sell
First, Alibaba’s earnings trajectory has largely gone sideways.
Revenue growth has slowed significantly from its earlier high-growth phase, transitioning from rapid expansion into a more mature, slower-growing profile. At the same time, earnings growth has not matched the revenue growth. Despite this, the stock continues to trade at around ~20x price-to-earnings, which is not particularly compelling given the lack of strong growth momentum.
Second, the opprotunity cost of holding Alibaba has been substantial. In Singapore, listed REITs have consistently delivered 5%–7% yields annually, with additional upside from capital appreciation over the past few years. Alibaba has not made much progress. On top of that, capital allocation has been conservative. Buybacks have slowed as the company prioritises AI investments inquiries with Alibaba IR the idea of leveraging low-cost debt to fund more aggressive buybacks while using capital for CAPEX has returned with no interest by the management. It is a signal that Alibaba Management does not feel its shares are too udervalued at current prices.
Hence, I will be deploying capital to purchase REITs
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