Alibaba (BABA)/ 9988 HK; Jack Ma 03 (May 21 - Jun 25)

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Brokers' Post-result Ratings, TPs, Views on BABA-SW (09988.HK) (Table)

Four brokers' ratings and target prices on BABA-SW (09988.HK)as complied by our reporters:

Brokers|Ratings|TPs (HKD)
JPMorgan|Overweight|250
Goldman Sachs |Buy (Conviction Buy List)| 245
Daiwa|Buy|220->188
Credit Suisse |Outperform|186->176
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Seven brokers' ratings and target prices on BABA-SW (09988.HK) as complied by our reporters:

Brokers|Ratings|TPs (USD)
JPMorgan|Overweight|255
Goldman Sachs|Buy (Conviction Buy List)| 252
Citigroup|Buy|240
UBS|Buy|235
Morgan Stanley|Overweight|220
CMB International|Buy|255.4->213.3
Nomura|Buy|190
Credit Suisse|Outperform|192->182
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Brokers|Views
JPMorgan|2Q result missed; GMV growth expected to slow to single-digit for next few quarters
Citigroup|2Q result missed and disappointing; lowered full-year earnings growth forecast
UBS|Earnings growth to be affected by macro policy in the future; competition pressure greater than expected
Morgan Stanley|2Q result missed; full-year earnings growth guidance predicted to fall short of estimate
CMB International|Quarterly result missed; impending challenges expected in coming few quarters
Nomura|2Q e-commerce business growth slowed down
Credit Suisse|2Q earnings missed under multiple layers of pressure including policy risk
Goldman Sachs|2Q result weak; revised guidance implied 11-16% full-year revenue growth
Daiwa|Cut FY2022-24E EPS by 4-14%

Source: AAStocks Financial News

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Alibaba Group (BABA US / 9988 HK) - Headwinds in China commerce while committing to strategic initiatives

While expectations were not high going into the print, Alibaba’s 2QFY22 scorecard was even softer than feared.

Customer management revenue (CMR) growth of 3% YoY was somewhat underwhelming, and slowed down notably from the 14% YoY clocked last quarter.

Alibaba is now guiding for FY22 revenue growth of 20-23% YoY, which at the mid-point represents a 5.4ppts drop below consensus.

We understand that this is based on management’s GMV growth expectations, while the softer broader macro environment and consumption trends would invariably take its toll, given Alibaba’s position as the largest e-commerce player in China.

Encouragingly, we note that management’s preliminary assessment is that PIPL is unlikely to have a material impact on the business, though more time is still needed to make a more concrete assessment.

While this set of results are less than inspiring, we believe that the macro-induced weakness in CMR growth is likely cyclical, while the multi-engine approach towards growth that the group is taking makes sense.

Still, we remain watchful on the level of investments in the near-term, given the potential drag on adjusted EBITA.

Following steep cuts to our estimates and more conservative assumptions, our FV drops from USD256 to USD201 (BABA US) / HKD248 to HKD194 (9988 HK).

We continue to see value in the name over the longer-term though patience would be needed in light of the near-term challenges. BUY.

Source: OCBC

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G Sachs Cites BABA-SW Forecast: CN Near-term GMV To Slow; Taobao Deals' Monetization At Early Stage

Goldman Sachs conducted an NDR with BABA-SW Head of Investor Relations Rob Lin on Monday (29 November).

At which, the three strategic pillars of BABA-SW were shared, namely domestic consumption, cloud computing and globalization.

As BABA-SW's investment in defensive-offensive strategies continues to increase to entice new users and establish multiple traffic sources, the broker stayed sanguine the company's monetization improvement.

The broker kept the company at Buy with a 12-month target price of $209.

It attributed the near-term commerce retail GMV growth slowdown in China to feeble macro and retail sales growth deceleration.

As to the critical strategic investments in Taobao Deals and Community Marketplaces, BABA-SW spotted extensive opportunities in remote cities.

For Taobao Deals, it mainly served the lower-tier cities, observing 240 million AACs during 2QFY22.

The management revealed that increasing and retaining users remained the key focus for Taobao Deals, of which monetization was still at an early stage.

Source: AAStocks Financial News

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BABA-SW Daniel Zhang's Internal Letter: To Reinforce Overseas Strategic Development

BABA-SW (09988.HK) announced a slew of structural changes, including adding two major segments: Chinese digital business and overseas digital business, and unveiled the plan of CFO succession.

The Group Chairman cum CEO Daniel Zhang, issued an internal letter, cited by Chinese media, that BABA-SW will mobilize a clearer strategic blueprint and more efficient organization in various segments, to create long-term value, with an aim to optimize the diversified governance system.

Given brisk overseas expansion in the last few years, BABA-SW tracked annual active consumers of 285 million overseas, Zhang said, yet viewing the Group is still far from becoming a global company of significance in overseas market which still has extensive potentials.

In view of this, the Group has to formulate an overall strategic blueprint and organizational protection in the overseas market, the CEO opined, and thus designate Jiang Fan to head AliExpress unit and ICBU business.

Source: AAStocks Financial News

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Alibaba Stock Looks Like a Screaming Buy. Is It Really?

By Ben Levisohn

It trades at 13.5 times forward earnings, below its five-year average of 24.2 times.

Its price-to-sales ratio has slipped to 2.7 times, below its five-year average of 10.2 times.

Source: Barron's

https://www.barrons.com/articles/should ... eid=yhoof2

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DZ analyst who predicted Alibaba’s US$220 billion stock crash warns of valuation sinkhole as US delisting risk mounts

Alibaba has declined 39 per cent in New York since lone bear from DZ Bank cut his rating to a sell, precipitating a US$220 billion loss of market value

Muhl is waiting for two scenarios to play out before reconsidering his bearish view on Alibaba and Chinese tech sector

by Zhang Shidong

The stock trades at three standard deviations below the five-year average in terms of price-earnings multiple, according to Bloomberg data. That compares with 0.5 deviation for JD.com and 1.5 for Tencent Holdings.

Two possible scenarios would need to play out for Muhl to alter his sell recommendation:-

Firstly, regulators have to announce that they are satisfied with the changes implemented by the companies.

Secondly, “the sell-off continues to a point where the mismatch between the intrinsic valuation and the stock price becomes so dramatic that the stock can withstand any more negative newsflow.

Source: SCMP

https://www.scmp.com/business/markets/a ... rash-warns

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Alibaba Had a Great Fall — But This Analyst Thinks It Can Put Itself Back Together

Management lowered guidance significantly, predicting the company might grow revenues as little as 20% this year — versus previous guidance for 28% growth.

The company is expanding its logistics footprint and offering more local and grocery delivery services, upgrading its platform, and experimenting with “community buying”.

Large total addressable market worth 15 trillion Chinese yuan ($2.35 trillion) spread across 600 million Chinese internet users, and has effectively penetrated some of the most attractive segments of this market, including 90% of “younger consumers.”

It’s also exploring new markets such as selling “unbranded” (i.e. generic) products to consumers via Taobao, and opening new markets in “less developed areas.

The company is also experimenting with package delivery via unmanned vehicles (i.e. drones) as it works towards offering two-day and even same day delivery of orders.

BABA has received 21 “buy” ratings and just 2 “hold” ratings — giving it a Strong Buy analyst consensus. Meanwhile, the $208.29 average analyst price target translate into ~71% upside potential from the current share price.

Source: TipRanks

https://www.tipranks.com/news/article/a ... gn=twr_sun

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Entering the sustainable growth stage

Alibaba Group held its 2021 Investor Day on 16–17 Dec, emphasizing its overall
strategy for China consumption, globalization and technology.

Management reiterated its long-term vision of achieving 2bn consumers, creating 100m
jobs and helping 10m SMEs become profitable by FY3/36F.

Reiterate Add with a DCF-based TP of HK$207.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 6371eba1e2

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Alibaba
Jan. 1 Opening Price: $232.73
Dec. 29 Closing Price: $112.09
2021 Year-To-Date Performance: -51.8%
Market Cap: $303.8 Billion

At current levels, the Hangzhou, China-based tech behemoth has a market cap of $303.8 billion.

Despite the year-long antitrust campaign, Alibaba displayed ongoing strength in its core e-commerce business.

Outside of its core retail segment, cloud revenue has increasingly become another major growth driver for Alibaba, as it tries to solidify its spot as a global leader in the cloud-computing space, along with U.S. rivals like Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Google (NASDAQ:GOOGL).

Not surprisingly, Alibaba is extremely undervalued according to InvestingPro models, which forecast roughly 73% upside in BABA stock over the next 12 months, bringing shares closer to their fair value of $193.90.

Source: investing.com

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vested

Alibaba dives amid signals of investor retreat

Concerns that some investors may be about to cut stakes after swapping their US holdings for Hong Kong-listed ones.

Sharp rise in the number of Alibaba American depositary receipts being converted into Hong Kong shares last week (about 724 million shares).

Source: Agencies

https://www.thestandard.com.hk/section- ... or-retreat