Shares of Alibaba have lurked in the gloom at 23 times forward earnings, the lowest since listing in 2014 © Reuters

Alibaba has come a long way since 1999, when Jack Ma founded what has become China’s biggest ecommerce platform. The entrepreneur is no longer essential to its smooth management. Shares did little when Mr Ma, back in the public eye on Wednesday, stepped down as chairman or when he left the board a year later.

Paradoxically, Mr Ma’s recent woes triggered a switchback ride for investors. After he publicly criticised Chinese regulators authorities threw the book at Alibaba, though trouble had been brewing for some time.

Roadblocks included an anti-trust crackdown and the suspension of the $35bn initial public offering of Ant Group, Alibaba’s financial offshoot. The usually extrovert Mr Ma disappeared from view. Shares fell by a quarter from October. On Wednesday, Mr Ma reappeared in an uncontroversial video praising China’s teachers, a group he once belonged to. Shares jumped up over 9 per cent.

Mr Ma’s absence crystallised the realisation among foreign investors that China tech giants and their leaders can expect peremptory punishment if they step out of line. Mr Ma’s return suggests a qualified rapprochement with authorities — and hopes of one between China and the US on the day Joe Biden is sworn in as US president.

Those harmonising strains of mood music are good for China tech businesses and their investors. They bring an immediate benefit for Alibaba.

Amid escalating US-China tensions and low interest rates, local groups have stocked up on dollars, with Tencent raising $6bn in Asia’s largest corporate debt deal last year. Alibaba has been planning a bond financing of its own to raise up to $8bn this month. Much of the cash on its balance sheet is in Chinese renminbi.

The timing of the deal looks better with Mr Ma back in circulation and a sensible president back in the White House.

Alibaba is not out of the woods, though. New antitrust rules mean it is unlikely to keep its near-60 per cent stranglehold on the local ecommerce market. Official investigations could result in a steep fine. Local lawyers expect this could be as high as a tenth of previous year’s sales. Ant Group is undergoing an overhaul.

Shares of Alibaba have lurked in the gloom at 23 times forward earnings, the lowest since listing in 2014. Mr Ma’s return provides an entry point for long-term investors. But they, like Mr Ma, should remain wary.

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