Source: Brokerage China Author: Qu Hongyan Recently, China Yangtze Power hit a historical high and once again showed the slow bull stock trend of "tripling in ten years". The slow bull market has left behind many passers-by and brought good returns to the steadfast investors. It is "rare for those who triple in one year to be like carp jumping over the dragon gate, while those who double in three years are few and far between." On the other end of the investment world, however, violent collapses are also deafening, with many financial products suspected of "Ponzi schemes" ceasing payments, leaving investors with no hope of recovering their investments. Both positive and negative cases illustrate the importance of forming a suitable mentality towards money in one's lifetime; otherwise, sooner or later, you will divorce yourself from your money. "I call this the money mind, a person's IQ can reach 120, 140, or even higher levels, and perhaps some people's minds are good at doing one thing, while others are good at doing another. They can do things that most ordinary people can't do. But I know some very smart people who make very foolish decisions because they lack the money mind." Buffett once said so. The so-called money mind refers to believing in common sense, believing in compound interest, being cautious and rational, thinking independently, prioritizing security over return, not dealing with people with questionable character, not easily guaranteeing for others, not believing in windfall profits, and not trying to cross legal norms for extra benefits. In today's world of ubiquitous information, everyone's wealth may become the "prey" of those with ulterior motives. Only with the money mind, can one form good behavior habits and shield oneself from separating from one's wealth. Do not entrust your wealth easily. Wealth is easy to lose but hard to accumulate, and trust is a vital reason leading to the rapid loss of wealth. "Do not allow anyone else to manage your business unless you can watch their every move closely and understand their behavior; or you have strong reasons to believe in their character and ability. For investors, this criterion determines when you can let someone else make investment decisions for you." Graham's criterion written eighty years ago is so clear. Almost all the investors who lost their wealth in the financial products have violated the above two criteria. They did not have the ability to closely supervise the whereabouts of their funds, nor did they have sufficient reasons to believe in the character of the product issuers. They easily invested their own wealth solely based on others' glib tongue and a piece of commitment paper. They did not act as gatekeepers of their own wealth and ended up with nothing left even if the government punished the wrongdoers. "An ounce of prevention is worth a pound of cure." This is a phrase Munger often says. Destiny must be in one's own hands, and investors with a suitable money mind will try their best to find suspicious points in their investments to protect the safety of their principal. For example, whether the manager is trustworthy, whether the underlying assets are profitable, whether oneself can timely monitor the risks in the investment process, and whether the sales staff is obtaining large commissions. As long as any unreliable signs are found, these investors firmly will not invest their money. Do not desire to get rich quick. As in the capital market and anywhere else, making money is not easy, and desiring to get rich quick will lead to quick loss of wealth. In the capital market, the desire to get rich quickly often leads to investors over-allocating specific stocks, industries, or assets at the worst time. For example, buying high-risk stocks that can gain huge returns once an adventure succeeds, but the chance of success is very small, also known as "whispering stocks" by legendary fund manager Peter Lynch. "They often tell investors a story with explosive effects. These 'whispering stocks' have a hypnotic effect on people, and it is easy for you to believe that the story the company tells has an emotional appeal that can easily confuse you." This is like hearing a very tempting "sizzling" sound, making you salivate, but you did not notice that there is no steak on the grill. In the eyes of investors who lack the money mind, stable yield provided by blue chips such as China Yangtze Power cannot meet their demands. However, historical experience clearly shows that buying stocks lacking in safety solely based on imagined high yields is unwise. The long-term average investment return of general stocks is 9%-10%, which is also the average investment return of stock indexes in history, a benchmark to measure one's investment performance and the benchmark to measure fund investment performance.
Authors: Chen Ming, Li Yingchao

On the evening of September 9th, the Shanghai Stock Exchange and Shenzhen Stock Exchange announced that, due to the implementation of component stock adjustments for the Hang Seng Composite LargeCap Index, mid-cap index, and small-cap index, the list of stocks eligible for the Hong Kong Stock Connect will be adjusted in accordance with relevant regulations, and will take effect from September 10, 2024.$Hang Seng Composite LargeCap Index (800714.HK)$, large-cap index, mid-cap index, and small-cap index, the list of stocks eligible for the Hong Kong Stock Connect will be adjusted in accordance with relevant regulations, and will take effect from September 10, 2024. Among them, the following stocks will be added $BABA-W (09988.HK)$N/A.$IMOTIONAUTOTECH (01274.HK)$,$SF INTRA-CITY (09699.HK)$,$CLOUD MUSIC (09899.HK)$Hold 33 stocks.

The above announcement means that southbound funds will be able to purchase stocks such as Alibaba through the Stock Connect Program. According to estimates by Goldman Sachs, southbound funds could bring potential inflows of $15 billion to $16 billion to Alibaba.

Companies like Alibaba are included in Stock Connect.

On the evening of September 9th, the Shanghai Stock Exchange and the Shenzhen Stock Exchange issued announcements stating that, due to the adjustment of constituent stocks for the Hang Seng Composite Large Cap Index, Mid Cap Index, and Small Cap Index, the list of Hong Kong Stock Connect has been adjusted in accordance with relevant regulations, and it will take effect from September 10, 2024.

Among them, Alibaba, ZhiXing Auto Technology, and SF Same City,$HANG LUNG GROUP (00010.HK)$,$K. WAH INT'L (00173.HK)$,$COFCO PACKAGING (00906.HK)$,$TIANLI INT HLDG (01773.HK)$,$STELLA HOLDINGS (01836.HK)$,$ZONQING LTD (01855.HK)$,$DAHSING BANKING (02356.HK)$,$SINOPEC SEG (02386.HK)$,$DEKON AGR (02419.HK)$,$CONCORD HC GP (02453.HK)$,$CHABAIDAO (02555.HK)$,$JNBY (03306.HK)$,$CSSC SHIPPING (03877.HK)$33 stocks have been included for trading.

$XIABUXIABU (00520.HK)$,$PRODUCTIVE TECH (00650.HK)$,$POWERLONG (01238.HK)$,$SHIMAO GROUP (00813.HK)$,$SINO-OCEAN GP (03377.HK)$,$CHINASOUTHCITY (01668.HK)$,$EDIANYUN (02416.HK)$,$AGILE GROUP (03383.HK)$33 stocks are being removed from the list of stocks eligible for trading through the Hong Kong Stock Connect.

The above announcement means that southbound funds will be able to purchase stocks such as Alibaba through the Hong Kong Stock Connect.

On September 4th,$Hang Seng Index (800000.HK)$The newly added Hong Kong Stock Connect index rapid inclusion rules will allow securities listed for secondary or dual-primary listing to qualify for southbound trading connectivity. If the total market capitalization at closing ranks among the top 10 in the existing constituents, it will be included in the index at the next monthly routine adjustment. Alibaba, which completed its dual-primary listing on the NYSE and HKEX on August 28th, became the first beneficiary of the new rules.

Institutions are bullish on the prospects of Alibaba's inclusion in the Hong Kong Stock Connect. A research report from Goldman Sachs pointed out that in the long term, the proportion of southbound funds' holding may stabilize at over 10%. A report from Goldman Sachs predicts that southbound funds will bring Alibaba potential inflow of 15 to 16 billion US dollars.

Alibaba completed a dual primary listing in August.

Alibaba had previously announced in May of this year when it released its 2024 fiscal year report that it is expected to complete the conversion to a primary listing in Hong Kong by the end of August 2024. After the conversion, Alibaba will have dual primary listings on the Main Board of the Hong Kong Stock Exchange and the New York Stock Exchange.

Just last week, Alibaba Group announced that it has added Hong Kong as a primary listing venue and will be listed as a primary listing on the Main Board of the Hong Kong Stock Exchange on August 28th, becoming a company with dual primary listings on the Hong Kong Stock Exchange and the NYSE. This action has now been successfully completed.

According to a previous announcement by Alibaba, the dual primary listing of Alibaba in Hong Kong does not involve new share issuance and financing.

In fact, as early as July 2022, Alibaba had applied for a primary listing in Hong Kong. In July of that year, Alibaba announced that the Board of Directors had authorized the management of the Group to submit an application to the Hong Kong Stock Exchange, intending to add Hong Kong as a primary listing venue.

Earlier, Alibaba Group announced that Alibaba is currently listed on the main board of the Hong Kong Stock Exchange, and will apply for Hong Kong as the primary listing venue in accordance with the Hong Kong listing rules, which is expected to take effect before the end of 2022. Subsequently, in November 2022, Alibaba announced on the Hong Kong Stock Exchange that it will not complete the main listing as originally planned by the end of 2022.

Before formally completing the conversion to the main listing in Hong Kong, we need to formulate and submit a new employee shareholding plan to shareholders for approval in order to comply with the newly revised rules in Hong Kong.

According to data, since Alibaba's secondary listing in Hong Kong in 2019, most of the publicly traded shares have been transferred to Hong Kong. In terms of market cap and trading volume, Alibaba has consistently ranked among the top three stocks in Hong Kong and the main listing is proceeding smoothly.

Industry insiders have pointed out that Alibaba's dual-primary listing will further expand the investor base from China, Asia, and other regions, promote diversification of shareholder structure, enhance the liquidity of Alibaba's Hong Kong shares, and provide greater flexibility for investors to hold and trade Alibaba stocks in the public market.

In the first quarter, Alibaba spent $5.8 billion on stock buybacks.

On the evening of August 15th, Alibaba Group released its performance for the first quarter of the 2025 fiscal year. This is also the first financial report disclosed by Alibaba after entering the new fiscal year.

Financial data shows that Alibaba's revenue this quarter was 243.24 billion yuan, compared to 234.156 billion yuan in the same period last year, a 4% year-on-year increase; adjusted EBITA profit was 45.035 billion yuan.

Among them, Alibaba Cloud's public cloud revenue saw double-digit growth, AI-related product revenue grew by three digits, with adjusted EBITA increasing by 155% year-on-year; Alibaba's international digital business group revenue increased by 32% year-on-year; Cainiao's quarterly revenue increased by 16% year-on-year.

On the other hand, Alibaba is continuing to accelerate its share buyback program. In the first quarter of the 2025 fiscal year, it has already invested 5.8 billion US dollars to buy back 0.613 billion shares of common stock, exceeding the intensity of the past few quarters. As of the first quarter ending June 30, Alibaba had 19.024 billion shares of common stock outstanding, with a net decrease of 0.445 billion shares of common stock in the quarter, representing a net decrease rate of 2.3%.

According to statistics, in the past fiscal year 2024, Alibaba has cumulatively invested 12.5 billion US dollars in share buybacks, ranking first in the scale of repurchases among Chinese concept stocks. As of June 30, 2024, there is still a remaining buyback amount of 26.1 billion US dollars under Alibaba's share buyback plan, valid until March 2027.

Editor/rice