Alibaba Investment Plan

Alibaba Investment Plan

1. investment objectives

Risk Management: Manage risk with an initial 50% buy and clear hand-in-hand criteria and trailing stops.
Revenue Generation: Leveraging Alibaba's long-term growth and recent upward momentum to realize revenue.

2. the amount of investment

Total investment amount: 200 million won
Initial purchase amount: KRW 100 million (50% of the total amount)
Remaining amount: KRW 100 million (used for additional purchases in case of an increase)

3. Alibaba's Stock Analysis: Entering Phase 2

Alibaba has recently seen an uptick in shares and volume increase, entering Tier 2 stock. Here are the characteristics of the Tier 2 stock:

Strong Buy: Trading volume has significantly increased in recent Alibaba shares gains, reflecting strong buying.
Trading volume decreases at adjustment: Trading volume is decreasing at adjustment, which is seen during the rise, indicating the possibility that the uptrend will hold.
Up more than 25% to 30% from a new 52-week low: Alibaba is up about 85% from a new 52-week low of $58.01, showing enough upside to enter phase 2.
More upside Likely: The current uptrend is a sign that Alibaba has moved away from its technical bottom and entered an uptrend, at a time when further upside is possible.

4. investment strategy

(1) an initial purchase
Purchase amount: KRW 100 million (50% of the total investment amount)
When to Buy: Enter the market taking into account the uptrend and increased volume entering Alibaba's Phase 2 stock.
The Market Analysis: Alibaba is up about 85% from its new 52-week low, and the volume is significantly higher. This could be seen as an uptrend reflecting strong buying.

(2) additional buying strategy
Remaining amount: 100 million won

Additional buy-in on the rise:
1st additional purchase: purchase of 30 million won, 30% of the remaining amount, if the stock price rises 20% from the initial purchase price.

2nd additional purchase: An additional purchase of 30 million won, or 30% of the remaining amount, when the stock price rises 30% from the initial purchase price.

3rd additional purchase: Buy 40 million won, or 40% of the remaining amount, when the stock price rises 40% from the initial purchase price.

(3) Response in case of a fall
Based on the cancellation: The cancellation will be implemented when it falls 10% from its 52-week high (106.0380). No additional buying will be made in the event of a decline.

(4) Risk Management
Hand-out: Manage risk by limiting losses to within 10% of 52-week highs. When there is a downward trend, there is no additional buying and the loss is minimized through hand-out.
Trailing Stop: Protects earnings by setting up the Trailing Stop with a 10% drop from its 52-week high if the stock rises above a certain level.
Variance of risk: Reduce downside risk by making additional purchases only when they rise.

5. Profit realization and selling strategy
(1) a selling strategy
There is no final selling plan, only selling with the trailing stop. If the stock falls to a certain level after rising, it automatically sets it to sell to protect its bottom line.
TRAILING STOP APPLIED: Every time the stock rises, it maximizes revenue by setting a trailing stop based on a 10% drop from its peak, and automatically sells in the event of a drop.

6. Analyzing Alibaba's Key Financial Indicators

(1) financial performance
Revenue: With 93.8B and a profit of 5.19B, Alibaba has a strong sales base.
PER (share price/earnings ratio): is relatively low at 11.40, which suggests the stock may be undervalued.
P/B (share price net asset ratio): At 1.99, the stock price is not high compared to the assets.

(2) Profitability
ROE (Return on Equity): At 10.57%, it shows that the company's profitability is stable.
ROA (Total Return on Assets): 3.93%, indicating that the entity is managing its assets efficiently.

(3) Additional Considerations
EPS Growth: We expect positive growth over the next five years with an expected EPS growth of 12.52%.
52-week Volatility: The 52-week-high is $119.82 and the low is $66.07, which is highly volatile, which could result in a short-term correction.

7. Risk management and additional considerations

Market Volatility: Alibaba has seen significant volatility on a 52-week basis, so risk management is required in line with future changes in China's economic situation or global markets.

Policy Risk: The impact of Chinese government regulations or policy changes on stock prices should be considered, and risk management strategies should be added to prepare for this.

8. Conclusion

Based on its initial 50% buying strategy, the Alibaba investment plan is focused on quickly leveraging the market's upward momentum. Alibaba is currently in the second phase of the stock, with strong buying and bullish trends. It does not make additional purchases in the event of a decline, and thoroughly manages risks through the loss in the event of a 10% drop from its 52-week high. The selling strategy sets a fall for each rise in the stock through the trailing stop, protecting the bottom line, and setting it to sell automatically.

Based on a strategy using 200 million won, which is less than 15% of the total amount of the account, the plan seeks to maximize profits and manage risks at the same time, considering that Alibaba is a second-tier stock.