To The Moon

Alibaba (9988.HK) closed today at HK$117.10, down nearly 3%. Most people I speak to have written it off. They say, “China is uninvestable” or “Alibaba is finished.”

But I see it differently. I'm a long-term investor, and this is one of the rare moments where price and value have completely diverged. It reminds me of times when sentiment was at its worst—yet those turned out to be some of the best buying opportunities.

Here’s why I’ve started accumulating Alibaba again, even when it feels uncomfortable.

Why I’m Buying

1. The Valuation Makes No Sense At HK$117, Alibaba is trading at:

• Single-digit PE, ex-cash

• Below book value

• A fraction of its sum-of-the-parts worth (especially when you include assets like Lazada, Ant Group, and Alibaba Cloud)

When I run the numbers, it just doesn’t add up.

2. The Business Is Still Solid

I think many people forget this: Alibaba is still generating billions in free cash flow every quarter. Taobao and Tmall still dominate. Alibaba Cloud remains the top player in China.

It’s not a broken business. It's just temporarily out of favour.

3. Share Buybacks Are Quietly Happening

This is something I pay attention to. Management is putting money where their mouth is—buying back shares aggressively. I see that as a sign of confidence, especially when they know the intrinsic value better than anyone else.

How I’m Accumulating 9988: Selling Puts with the Intention to Buy

Rather than trying to catch the exact bottom on Alibaba, I’ve decided to accumulate via selling cash-secured puts. This lets me:

• Earn premium upfront

• Choose my preferred “buy-in” price

• Only get assigned shares I’m ready to hold for the long term

I’m currently looking at 3 expiries: August 28 (29 days), September 29 (61 days), and October 29 (92 days). Here’s how they compare:

option chain (29 DTE)

A strike of 110 will give me a premium of around $2.13 and an effective entry price of $107.87

option chain (61 DTE)

A strike of 110 will give me a premium of around $4.79 and an effective entry price of $105.21

option chain (92 DTE)

A strike of 110 will give me a premium of around $6.20 and an effective entry price of $103.60

My Thoughts

• If I want faster assignment, I’ll sell the August 110 Put. Lower premium, but higher chance the stock hits that level soon.

• If I want a better entry price, I’ll go for the October 110 Put and collect over HK$6 in premium.

• Middle ground? The September expiry gives a nice balance of premium and time.

Right now, I’m personally eyeing the 110 strike for September or October. It gives me:

• A solid discount from today’s price (HK$117)

• Ownership of a great company at ~HK$103–105

What Happens If I Get Assigned?

I’m totally fine getting assigned. In fact, I want to be assigned. If Alibaba drops and my puts are exercised:

• I’ll own the shares at my preferred price (not chasing up)

• I’ll hold for the long term (3–5 years)

• If the price drops further, I’ll repeat the strategy and sell another round of puts

What are your thoughts?

Do you think $09988(09988)$ is a Value Trap ?