Alibaba Valuation May Be Too Conservative: Hong

The transcript discusses the size and risks of Alibaba's IPO, focusing on the VIE structure used to bypass Chinese regulations. It highlights Alibaba's valuation strategy, growth potential, and market focus, emphasizing its dominance in the Chinese e-commerce market. The relationship with the Chinese government and future prospects are explored, along with the potential for share price growth and investor interest.

What is the primary purpose of using a VIE structure for foreign investors in China?

• To directly control the company's operations

• To avoid paying taxes in China

• To gain full ownership of Chinese companies

• To bypass regulations and own a share of earnings

Why did Alibaba choose to underprice its shares during the IPO?

• To avoid competition with other tech companies

• To ensure a better reception in the market

• To comply with government regulations

• To discourage foreign investment

How does Alibaba's price-to-earnings ratio compare to its competitors?

• It is higher than its competitors

• It is lower than its competitors

• It is the same as its competitors

• It is not applicable to Alibaba

What is a significant challenge for Alibaba when expanding internationally?

• Lack of technological infrastructure

• Cultural differences

• Limited product range

• Insufficient capital

Why is Alibaba's focus on the Chinese market considered beneficial?

• Because of the mature market

• Due to the lack of competition

• Due to government restrictions

• Because of the fast-growing potential

How does the Chinese government view Alibaba's role in the economy?

• As a key player in the economy

• As a competitor to state-owned enterprises

• As a threat to national security

• As a minor player in the market

What is the expected impact on Alibaba's share price after listing?

• An increase due to conservative valuation

• No change due to stable market conditions

• A decrease due to regulatory issues

• A decrease due to market saturation