Key Takeaways
MY.Alpha Management HK Advisors (MAMHA), a Hong Kong-based investment firm with an impressive 100.69% estimated one-year return, recently made headlines by completely divesting its holdings in ZEEKR Intelligent Technology (ZK) and Alibaba Group Holding (BABA). This move, revealed in their 2025-Q4 portfolio update, isn't just a routine rebalancing; it signals a deeper strategic recalibration by a fund specializing in pan-Asian opportunities. MAMHA's investment philosophy is rooted in a fundamental, catalyst-driven approach, seeking to capitalize on themes of change across the region. Their decision to fully exit two prominent Chinese companies, especially given the context of ZEEKR's delisting, warrants a closer look at the underlying market forces.
The fund's AUM stands at $186 million, with a significant allocation to Technology (33.51%) and Communication Services (31.1%). While MAMHA's founding partner, Mark He, has publicly expressed conviction in China's "multipolar world" and "exceptional alpha opportunities" in sectors like biotech, gaming, and domestic AI innovation, the specific exits from ZEEKR and Alibaba suggest a highly selective approach within this broader bullish outlook. It appears the fund is distinguishing between general Chinese market potential and the specific challenges faced by certain U.S.-listed entities. This selective pruning of its portfolio highlights a nuanced perspective on where true value and manageable risk lie within the evolving Chinese investment landscape.
For investors, MAMHA's actions serve as a potent reminder that even funds bullish on China are making tough calls on individual names. The complete closure of positions in ZEEKR and Alibaba suggests that, despite their previous prominence, these companies no longer fit the fund's risk-reward profile or strategic vision. This could be due to company-specific headwinds, or a broader re-evaluation of the viability of U.S.-listed Chinese ADRs in the current geopolitical climate. The fund's agility in shedding these holdings, particularly ZEEKR which delisted, underscores a proactive management style focused on navigating complex market shifts.
ZEEKR Intelligent Technology Holding Limited officially delisted from the New York Stock Exchange on December 22, 2025, following a privatization merger led by its parent company, Geely. This wasn't a sign of operational collapse, but rather a strategic realignment under Geely's "One Geely" vision. Zeekr, which debuted on the NYSE in July 2023 at $19 per ADS with a market cap exceeding $10 billion, found itself caught between ambitious growth plans and an increasingly challenging U.S. listing environment. The delisting was approved by over 94% of shareholders, with most opting for stock swaps into Geely's Hong Kong-listed entity, signaling confidence in the integrated future.
Several factors converged to push ZEEKR off the NYSE. Firstly, the company faced a persistent "low valuation" in U.S. markets, where investors often categorized it as a traditional automotive company rather than a high-growth tech enterprise. This led to lower tolerance for its financial losses compared to peers like NIO or XPeng, hindering its ability to secure cost-effective financing. Secondly, mounting geopolitical and regulatory risks, particularly under the Holding Foreign Companies Accountable Act (HFCAA), imposed significant compliance costs and exposed Zeekr to potential forced delisting. Proactively delisting allowed Zeekr to avoid these pressures and operate in a more favorable regulatory environment.
Post-delisting, ZEEKR is expected to leverage deeper synergies within Geely's ecosystem, focusing on accelerating product development with five new models slated for 2025. This integration aims to streamline operations, reduce redundancies, and enhance collaboration in R&D, supply chain, and manufacturing. While there are no immediate plans for an independent public listing, a future spinoff or listing on the Hong Kong or A-share markets remains a possibility, depending on market conditions and integration success. For investors, ZEEKR's exit from the NYSE highlights the growing trend of Chinese companies prioritizing internal integration and domestic capital markets over the complexities of U.S. listings.
Alibaba Group Holding Limited (BABA) finds itself at a critical juncture, navigating a landscape defined by intense domestic competition, evolving regulatory oversight, and persistent geopolitical friction. The company's shares are currently trading at $135.24, with a market cap of $313.60 billion. While Alibaba saw a significant rally in early 2025, driven by Beijing's stimulus and its own AI initiatives, the second half of the year brought new challenges, including a "food delivery war" and the reintroduction of geopolitical uncertainty with the U.S. administration. This has kept a "geopolitical discount" on Chinese tech valuations, despite the Chinese government's pivot from "crushing" to "managing" its tech giants.
The company's latest financial reports paint a mixed picture. While its Cloud Intelligence Group reported a 34% year-over-year revenue growth to RMB 39.8 billion (approximately $5.5 billion) in Q2 fiscal 2026, GAAP net income fell 53%, and free cash flow turned negative. This suggests that impressive top-line growth in cloud is coming at an increasingly steep price, as Alibaba pours significant investments into AI and infrastructure. The departure of Junyang Lin, the architect of Alibaba’s Qwen AI model, in early March 2026, further rattled investor confidence, raising questions about the company's AI ambitions and its ability to compete with Western rivals like Microsoft and Amazon, which are achieving cloud growth with expanding profits.
Looking ahead, the potential "IPO 2.0" of Ant Group in Hong Kong is a highly anticipated catalyst for 2026. Alibaba retains a 33% stake in the fintech giant, and a successful listing could provide a massive liquidity event and potentially re-rate Alibaba's core valuation. However, investors should expect continued volatility, especially with the ongoing impact of U.S. trade policies. Alibaba's strategic pivot will involve the internationalization of its AI services, seeking revenue expansion in emerging markets as domestic growth slows. The company's ability to maintain its $150 floor will heavily depend on its AI integration and the resolution of domestic competitive pressures, making it a bellwether for the broader Chinese tech sector.
The delisting of ZEEKR and the ongoing challenges faced by Alibaba are not isolated incidents; they reflect a broader, structural shift impacting Chinese American Depositary Receipts (ADRs). The "uninvestable" label that plagued the sector for years has evolved into a "value-at-a-price" mentality, but with significant caveats. Geopolitical tensions, particularly the threat of "massive" tariffs and restrictions on semiconductor exports from the U.S., continue to exert a "geopolitical discount" on these valuations. This environment forces investors to be highly selective, focusing on companies that align with China's strategic priorities or demonstrate genuine competitive advantages globally.
The regulatory landscape in China has also transformed. Beijing has moved from punitive crackdowns to a policy of "Anti-Involution," aiming to prevent destructive price wars and encourage "high-quality growth." This means companies like Alibaba are now compelled to prioritize sustainable development over raw volume, impacting margin trends. For investment funds, this necessitates a shift from broad regional exposure to precision, selectivity, and thematic conviction. Funds are increasingly exploiting divergences: between China’s policy winners and losers, and between companies that can translate structural transformations into risk-adjusted returns.
The overall sentiment towards Chinese equities remains a study in cautious optimism. While stimulus measures and the "AI Spring" of early 2025 provided tailwinds, the market is now digesting the realities of margin compression and intense domestic competition. The activity of "S funds" (secondary funds) has increased, and M&A exits are becoming a more important supplementary path for investment funds, reflecting a need for diversified exit channels in a less liquid market. This period of consolidation may represent a preparatory phase before the next major cycle in the Chinese digital economy, but it demands patience and a deep understanding of the nuanced risks involved.
The outlook for Chinese investments is characterized by a complex interplay of domestic policy support, intense competition, and persistent geopolitical headwinds. While the "Golden Age" of easy growth is over, opportunities still exist for discerning investors. The Chinese government is actively encouraging investment in strategic industries such as new-generation information technology, AI, aerospace, new energy, and high-end equipment. This policy guidance is channeling capital towards "hard-tech" enterprises and high-tech talents, creating specific pockets of growth.
Government investment funds remain the most important source of capital in China's investment funds market, with policies encouraging longer fund durations and relaxed local investment ratios to support scientific and technological innovation. Insurance funds are also being guided towards increasing equity investment in strategic emerging industries, with higher investment ceilings for VC funds. Foreign capital is being encouraged through initiatives like the Qualified Foreign Limited Partnership (QFLP) scheme, facilitating entry into key areas such as advanced manufacturing and modern services.
However, the market still faces significant exit pressure, despite some positive signals in 2025. While the A-share IPO market has recovered, M&A exits have surged, increasing by 84% in the first three quarters of 2025. This indicates a shift towards alternative exit strategies. For investors, the key is to identify companies that are direct beneficiaries of state support, demonstrate strong innovation capabilities, and can navigate the competitive domestic landscape without succumbing to "involution." The focus should be on long-term value creation rather than short-term profit-seeking, as the market transitions towards a more disciplined and specialized investment environment.
The strategic exits by funds like MY.Alpha Management HK Advisors underscore a critical shift in how sophisticated investors are approaching Chinese equities. It's no longer about broad exposure but about surgical precision, identifying companies that can thrive amidst geopolitical crosscurrents and intense domestic competition. For retail investors, this means a heightened need for due diligence, focusing on companies with clear competitive advantages and strong alignment with China's long-term strategic goals. The era of easy gains from Chinese ADRs is likely over, replaced by a more complex, yet potentially rewarding, landscape for those willing to dig deeper.
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