BYD, Alpina Holdings, Alibaba - Turnaround in Asia

Alibaba - Ma clears the way

It was around two years ago when the authorities put a stop to the USD 37 billion IPO of Alibaba subsidiary Ant Group shortly before it was to be listed. The interconnections within the Company structure with its parent Alibaba were too close. Now founder Jack Ma is reacting and relinquishing control of the leading Chinese financial technology provider. The billionaire previously held 53.48% of the voting rights in Ant Group; the change reduces his stake to 6.2%.

By relinquishing control, an IPO could now be within reach again for Ant Group. However, listing requirements are likely to further delay an IPO. The change of shareholders would further prevent Ant Group from being listed on the stock exchange within the next 12 months, according to the regulations.

Positive voices came from the US investment bank Morgan Stanley. They see Alibaba as a top pick among Chinese Internet stocks and raised the price target from USD 100 to USD 150. Against the current relaxed regulatory environment, the group was forecast to outperform other Chinese dotcoms and achieve an adjusted CAGR of 18% of EBITA in 2023-26. Alibaba is also expected to emerge as one of the primary beneficiaries of China's reopening, as well as a proxy through which foreign capital from global investors is expected to flow into the Chinese market.

Alpina Holdings - Dividend pearl with a P/E ratio of 2

For the past 17 years, Singapore-based Alpina Holdings has established itself in the real estate and construction services market and counts primarily public sector clients among its clientele. These include the Singapore government, agencies and ministries, and public universities or institutions. The Company focuses on providing integrated building services (IBS), M&E engineering services (M&E), and alterations and additions (A&A). Here, the Company holds licenses of the highest classification to gain access to projects without bidding and without project limits.

In IBS, customer contracts typically run between 1 to 4 years and mainly cover maintenance services on building systems. In contrast, M&E engineering services are provided on a project-by-project basis. They include the installation, replacement and upgrade of M&E systems, including panels, distribution boards, luminaires, lightning protection systems, ACMV systems, pumping systems and fire protection systems. The A&A work performed by the group is for fixed-term contracts ranging from 2 to 4 years. The scope of work may include construction and M&E work completed according to work orders issued from time to time during the contract period.

According to management, demand for customized integrated facilities management and IBS services is increasing as more buildings age and require higher levels of care and management. By overlapping the two businesses, Alpina Holdings can leverage its synergies.

The results achieved last year show the huge demand for extended facilities management. With revenues of EUR 36.4 million and earnings of EUR 6.5 million in 2021, Alpina Holdings has a price-to-earnings ratio of just 2. In addition, with a dividend yield of over 7%, which is far above the market, the Company is attractive. The operating margin is around 20%, and the market capitalization hovers around the EUR 20 million mark. In addition to Singapore, the shares are also traded in Frankfurt.

BYD - Buffett continues to sell blithely

Despite a slide in the BYD share price of around 40% in the past six months, Berkshire Hathaway founder Warren Buffett continues to sell. The investing legend sold 1,058,000 shares of the Chinese electric car company on January 3. As a result, the shareholding decreased from 15.99% to 14.95%.

Fundamentally, however, things continue to run smoothly at the "Build Your Dream" company. BYD sold 235,197 New Energy Vehicles (NEVs) in December, a new record. That brought cumulative NEV sales for the full year 2022 to 1,863,494 units.

The Company also added to its product lineup by introducing a new luxury brand. Yangwang is to be the name of the noble range, and the cost point of the respective models is to be around CNY 1 million, which is around EUR 140,000. Blade battery technology is to form the foundation of the noble cars. BYD wants to start with an off-road SUV called U8.

The end of the Zero-COVID policy opens up several rebound opportunities after the sell-off. Alibaba has potential, according to Morgan Stanley. The fundamentals are still right for BYD. Alpina Holdings is attractive, with a P/E ratio of 2 and a dividend yield of over 7%.