 Good day, fellow investors. Jesse, a member of our stock market for modern value investors, Facebook group wrote to Monish Pabrai asking him why he bought Reign and the answer was amazing. So here's the answer in written and he's saying that the devil lies in the details. There is no perfect formula for investing. There is no point in looking at the headline depth to equity, return on equity, return on invested capital, etc. So the key here is to look in the details and as I'm researching the Chinese stock market, the key is I cannot look just at the headline ratios, price earnings, growth, because that is obvious to everybody. I have to look in the details, I have to look for the devil in the stocks and I have to understand the company better than everybody else. To do that, to find such great companies, I have to really dig into every company and see whether that is a potential good investment or not. So the best way to analyze a company is to really make a video about it, present it to someone else because that's one of the greatest benefits of teaching. When you present, you are the one that learns the most about it. So I've decided to go to all the Chinese companies, especially those most interesting to me and make a short video, really get to know the story because also when you discuss one company, you learn a lot about the competition, other companies, why is Alibaba investing in ZTO, etc., etc. So in order to do that, I'll make a big series of videos about Chinese companies and then we'll discuss, of course, the company was the company doing the fundamentals, the growth rates, the earnings, the cash flows, the value, if there is value, what is significant for the company. Then we'll discuss the story behind it, a little bit going into the devil's details, going into the not so obvious things to the market where we can gain an advantage, especially if we think for the long term over the rest of the community. And then at the end of each video, I'll show what's the company worth from an absolute investing perspective, where you expect your returns to come from business earnings and from a relative investing perspective, where you expect your earnings to come from. The fact that the company is undervalued in relation to another stock sector, country, whatever, and you expect the valuation to increase. So we are going to put those two things into perspective. 99% of investors are relative investors, not absolute, so there will be something for everybody. So nothing else to do here, let's dig into the companies, let's dig into the details. If you like this approach, whether you're an absolute relative investor, I think I can save everybody time. So please subscribe to this YouTube channel, as there will be many, many stock analysis, investment analysis, and we also discuss investment mindset, investment theory, mostly about value investing. Let's go into the Chinese stock market. All right, let's talk about BABA. So just a company overview. There is so much with Alibaba and a lot of people don't see it because you only see the headline growth, the headline earnings, and a lot of these companies don't even have earnings yet. And they pushed Alibaba's margins down. So commerce, retail, expanding, omnichanneling, digital media, cloud computing, all of those things are growing and all of those things can have a big impact in the future. So Alibaba is not just Alibaba and financial, the ownership there, and much, much more. Nevertheless, the revenue growth is 61% consumers, 644 million monthly active users, 576 million annual active consumers, 4 billion in net free cash flow. So growth 93% in cloud computing. And look at this, 67% of revenue comes from commerce, retail, but already what, 6, 7, 14% of revenue comes from cloud computing, digital media, and that's growing very, very fast, 93, 46 and 64%. So Alibaba is much more than just a retailer. The cash flows are also growing and those cash flows allow Alibaba to invest in many, many projects that they hope to scale and leverage their platform and their ecosystem. They're really building an ecosystem here and ill me the food business, ZTO express the delivery business, they're really investing big. What will be the return on investment on that company? That's a big question. So what will be the rate of returns on the capex on the investments? They already announced slower margins for future growth, for future business ecosystem, but that's something we have to calculate in a deeper model. To make a deeper model, you have to look at Alibaba's annual report that has 1077 pages. That's crazy. But if you want to invest in Alibaba, I suggest you read into this annual report. There is so much to learn about the company. The company has further more than 500 subsidiaries. So it is a variable interest entity on the Cayman Island. So very complicated structure. It's better to understand this before investing. What's very interesting are Alibaba's investments, 1.8 billion in focus media, DSM group, some investment in Turkey, 728 million, Kylian commerce, Northwestern part of China, 536 million, Xi retail, 486 million, Beijing easy home furnishing, 580 million, etc, etc, etc. There is so many that they are investing in with big, big amounts. I don't know what will be the reward there, but I think the market is not calculating. So this might be the devil in the details that the market is not adding value, because it's not yet contributing to the bottom line. Plus, there are a lot of uncertainties. The ownership of Ant Financial, Alipay, was by Baba, spind off to Jack Ma, and now they own what? 30%? So a lot of controversies there, but something to include in models. The investments there amount to 28 billion dollars, which is a huge number. And even if just two of those investments become the next Alibaba, that's it. You don't need anything more. Another detail that's very important for Baba, but many overseas, the globalization, Southern Asia, Asia, they have an investment into Lazada, six Southeast Asian countries, Pakistan, Bangladesh, e-commerce, Turkey. So all those countries, I wonder what that can be given Alibaba's specialty, skill, management. What will that be in 10, 20 years? That's something you have to ask yourself also, and put into a model. However, a quick model shows that if Alibaba continues to grow at 50% at the 15th valuation, then earnings in 2023 will be 43.13, which is crazy. That implies a present value of 321, which makes Alibaba very undervalued. However, if I change that growth rate to 0.3, 40% or even 0.2, 20% at the valuation of 15, then the present value of the future price is much lower at 105, which makes Alibaba overvalued. So the key here now is, okay, we have the overvalued, the undervalued, see what are the details, put them into deeper model, and then compare to all other investment opportunities in China, and then see what is the exposure. How much am I willing to risk at this valuation in order to a portfolio? Alibaba is there, China is there, they are growing, what will it be in 10, 20 years? Nobody knows, but what is the risk reward there, and what is the risk reward for my portfolio? That's the key for a deeper analysis. But let's first compare it to all other Chinese investments. So please check all the videos in this playlist. And then at the end, we'll see which one is the best to buy a few of those that will be the crown jewels of our portfolio. And if those go down in price, we will simply rebalance the global portfolio we have, add more, and even increase our long-term returns. Thank you for watching, looking forward to comments, and I'll see you in the next video.