A simple update of all my transactions since my last update this month. Alibaba threw a spanner in its spin off works and as a result, there was a 10% sell down and I added 500 HK shares to my portfolio. The decision to pick HK over US ADS is because Hk has a lower withholding tax and Alibaba has recently started to announce annual dividends. So holding in HK makes it a more ideal dividend stock. Earnings wise, there was nothing much surprising. The surprise was the shelving of Alicloud IPO which explained why a 10% selldown in share price occurred.
At current earnings per ADS of 8 times and strong cashflow, Alibaba should be able to dish out at least US$2 per ADS dividends. Management could consider raising its dividends to reward shareholders. The conglomerate is now a matured state company and returning value to shareholder should be one of its priority. Its cash rich and cash generative, hence even a 40% payout ratio (USD$3.20/share) is justified.
Due to the dramatic sell down and increase in US REIT, Alibaba has drop to less than 50% of my portfolio.