Alibaba (BABA)/ 9988 HK; Jack Ma 01 (May 08 - Apr 16)

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Our Alibaba Stock Price Prediction Shows Triple-Digit Gains

By KYLE ANDERSON

Source: Money Morning

http://moneymorning.com/2015/05/04/our- ... git-gains/

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Alibaba to build largest China sourcing platform for imports

HONG KONG (May 6): Alibaba Group Holding will introduce a service on its wholesale website 1688.com that allows merchants in China to source global brand names.

The service, which will begin on May 18, will initially offer brands from Spain, according to an e-mailed statement from the company on Wednesday.

The website will add products from Portugal, Italy and South Korea in the future as the company seeks to build it into the largest sourcing platform for imports, Alibaba said.

Cross border e-commerce represents the next battle front for Chinese Internet companies including Alibaba and shopping sites backed by Tencent Holdings.

As China eases policies and sets up test zones that make it cheaper and faster to import overseas goods, companies are rushing to introduce US and European brands to tap demand from an expanding middle class that could reach 600 million in the next decade.

“As China’s middle class’s demand for high quality foreign brand names increases, it would help Alibaba ride the next wave of growth,” Liu Li-Gang, chief economist for Greater China at Australia & New Zealand Banking Group in Hong Kong, said by phone.

“China has just started opening up more free trade zones” making it easier to import goods, he said.

Created in 1999, 1688.com is a Chinese website that has been helping small merchants to purchase goods from within the country.

Its counterpart Alibaba.com helps global wholesale buyers source from sellers in China, India and Pakistan.

The platform also plans to help importers by offering customs clearance, logistics support and product inspection services later this year, Alibaba said.

Buyers and sellers are able to directly conduct transactions on the website.


Source: Bloomberg

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vested

Alibaba is at an all-time low By Akin Oyedele

Shares of Alibaba fell to an all-time low on Tuesday.

The stock dipped by more than 3% to as low as $77.77 per share in early trading on Tuesday.

This year, the stock is down 25% year-to-date, and about 17% lower from the initial public offering price last September.

The Chinese e-commerce giant will announce quarterly results on Thursday for its third time since going public.

In an earnings preview Tuesday, Morgan Stanley analysts note that in a speech on April 23, Alibaba CEO Jack Ma expects a headcount freeze in 2015, although they do not think it was his core message.

"Most interpreted the message as a hint of potential earnings pressure in the near term, with the need to control costs after rapid growth," the analysts noted.

"In the speech, Ma did warn a few times that the restructuring/optimization of various business units in 2015 could impact near-term performance," the analysts further noted.

They have an "Overweight" rating on the stock.

Source: Business Insider

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vested

Alibaba earnings beat estimates as revenue jumps 45 percent by Reem Nasr

Alibaba delivered quarterly earnings and revenue that topped analysts' expectations on Thursday, on a jump in gross merchandise volume.

American depositary shares of Alibaba popped in premarket trading following the announcement. (Click here to track its shares.)

The company also said on Thursday that Chief Executive Jonathan Lu will step down, effective May 10, and would be replaced by Chief Operating Officer Daniel Zhang. Lu will remain on the board as vice chairman.

The Chinese e-commerce giant posted fourth-quarter earnings excluding items of 48 cents per share in the quarter ended March 31. The company's revenue rose 45 percent to $2.81 billion.

Wall Street had expected the company to deliver quarterly earnings per share of 42 cents on $2.77 billion in revenue, according to consensus estimates from Thomson Reuters.

Alibaba's gross merchandise volume (GMV) on China retail marketplaces jumped 40 percent to $97 billion. Mobile GMV continued to grow, accounting for 51 percent of total GMV, up from 42 percent in the December quarter.

About two-thirds of Alibaba's sales still come from its consumer-to-consumer marketplace Taobao, where it primarily earns revenue from advertising and marketing services and charges less for marketing on mobile devices than on computers.

"We assume that stepped up efforts to remove counterfeit goods has a measurable impact on GMV this quarter," MKM Partners analyst Rob Sanderson wrote in a note on May 4.

Investors have been spooked in recent months by the perception of increased regulatory pressure on Alibaba to tackle the sale of counterfeit goods on its platforms. Executive Chairman Jack Ma's hiring freeze announcement also dampened enthusiasm among those primed to expect continued rapid growth.

The number of mobile monthly active users soared 77 percent to 289 million. The number of overall annual active buyers increased 37 percent to 350 million.

The quarterly report card was only the third since Alibaba's record-breaking $25 billion initial public offering in New York in September.

Up to Wednesday's close, the stock had fallen more than 33 percent since hitting a record high of $120 in November.

The company debuted on the New York Stock Exchange last September has been facing a steady stock tumble as the company deals with a slower pace of economic growth in China. Its stock is 23 percent lower year to date but still trading above its IPO price.

Last week, the company's founder and chairman Jack Ma told his staff about a hiring freeze for the rest of the year.

"Alibaba has really developed too quickly ... this year our entire group headcount will not go up by one person," Ma said, according to a transcript of the April 23 speech carried on Alibaba's official messaging app Laiwang.

Last month the Chinese e-commerce giant announced that it would fight counterfeit goods on its site through a range of methods. This came after a U.S. trade group pressed the American government to prod Alibaba to action.

Source: CNBC

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vested

Alibaba is surging after an earnings beat by AKIN OYEDELE

Shares of Alibaba surged by more than 7% in pre-market trading Thursday after the company posted quarterly earnings above expectations.

The Chinese e-commerce company reported quarterly sales of $2.8 billion, a 45% increase from the previous year, beating the estimate for $2.6 billion according to Bloomberg.

The company posted adjusted earnings per share of $0.43, beating the estimate for $0.42.

“Alibaba had a strong quarter with significant growth across our key operating metrics,” said Jonathan Lu, Chief Executive Officer of Alibaba Group in the release. “We grew revenue, gross merchandise volume and annual active buyers, and we expanded our unrivaled leadership position in mobile.”

The company also announced Daniel Zhang as its new CEO, replacing Jonathan Lu.

Shares of Alibaba fell to an all-time low on Tuesday.

In an earnings preview, Morgan Stanley analysts noted a recent speech by Alibaba Jack Ma in which he said said he expects a headcount freeze in 2015.

That could be interpreted to mean the company expects its earnings to be strained, the analysts said.

http://www.businessinsider.my/alibaba-q ... sW9qLY0.99

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vested

Alibaba revenue beats estimates, CEO Lu to step down

(Reuters) - Alibaba Group Holding Ltd's (BABA.N) quarterly revenue rose 45 percent, beating analysts' expectations, as the Chinese e-commerce company reported a jump in gross merchandise volume.

Alibaba's American depository shares were up 7.5 percent at $86 in premarket trading.

The company also said on Thursday that Chief Executive Jonathan Lu will step down, effective May 10, and would be replaced by Chief Operating Officer Daniel Zhang. Lu will remain on the board as vice chairman.

Alibaba's revenue jumped to $2.81 billion in the quarter ended March 31, beating the average analyst estimate of $2.77 billion, according to Thomson Reuters I/B/E/S.

The company earned $463 million, or 18 cents per share. Excluding items, the company earned 48 cents per share, beating the 42 cents analysts estimated.

Alibaba's gross merchandise volume (GMV) on China retail marketplaces jumped 40 percent to $97 billion. Mobile GMV continued to grow, accounting for 51 percent of total GMV, up from 42 percent in the December quarter.

About two-thirds of Alibaba's sales still come from its consumer-to-consumer marketplace Taobao, where it primarily earns revenue from advertising and marketing services and charges less for marketing on mobile devices than on computers.

"We assume that stepped up efforts to remove counterfeit goods has a measurable impact on GMV this quarter," MKM Partners analyst Rob Sanderson wrote in a note on May 4.

Investors have been spooked in recent months by the perception of increased regulatory pressure on Alibaba to tackle the sale of counterfeit goods on its platforms. Executive Chairman Jack Ma's hiring freeze announcement also dampened enthusiasm among those primed to expect continued rapid growth.

The number of mobile monthly active users soared 77 percent to 289 million. The number of overall annual active buyers increased 37 percent to 350 million.

The quarterly report card was only the third since Alibaba's record-breaking $25 billion initial public offering in New York in September.

Up to Wednesday's close, the stock had fallen more than 33 percent since hitting a record high of $120 in November.

Source: Reuters

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not vested

Chinese E-Commerce Giant Replaces CEO by Lulu Yilun ChenTim Culpan

Alibaba Group Holding Ltd. shares surged after China’s biggest e-commerce company named a new chief executive officer and posted a 45 percent increase in revenue.

Daniel Zhang will become CEO on May 10, replacing Jonathan Lu, who will remain on the board as vice chairman, the company said Thursday. The change was announced as Alibaba’s sales rose to 17.4 billion yuan ($2.8 billion) in the three months through March, beating analysts’ estimates.

Alibaba’s results helped ease fears that revenue growth was slowing as China’s economy cools. The stock had also been falling out of favor from investors after Chairman Jack Ma said last month that there would be a hiring freeze and the Chinese government criticized the company’s business practices.

“Alibaba’s strong financial results re-affirm that it is a must-own stock,” said Brad Gastwirth, chief executive officer of San Francisco-based ABR Investment Strategy.

Shares of Alibaba climbed 7.5 percent to close at $86 in New York, the biggest gain since September. That cut the stock’s drop this year to 17 percent. Shares in the September initial public offering were sold at $68 apiece, raising a record $25 billion.

Yahoo! Inc., which in January said it would spin off its stake in Alibaba, jumped 5.3 percent to $43.87. The spinoff is expected to be completed by year’s end.
Singles’ Day

Ma elevated Zhang after the chief operating officer helped turn the Nov. 11 “Singles’ Day” shopping promotion into the company’s biggest sales event.

“Daniel is a proven international business leader and innovator with a strong track record of delivering results,” Ma said. “Today’s announcement reflects our commitment to continuing to develop strong leadership from within.”

Net income fell 49 percent to 2.9 billion yuan, the company said. Adjusted net income, which excludes some items, rose 16 percent to 7.74 billion yuan.

Zhang, 43, joined Alibaba as chief financial officer of Taobao Marketplace in August 2007 and has been COO since September 2013. The change is being made because Alibaba wants to promote young talent, Executive Vice Chairman Joseph Tsai said on a conference call.

Global Expansion

Lu, 45, joined Alibaba in 2000 and replaced Ma as CEO two years ago.

“Expectations going into the fourth-quarter earnings were quite low,” said Brendan Ahern, chief investment officer at Krane Fund Advisors LLC in New York. “The change of CEO shows that senior management is very attuned to the fact that the stock has lagged.”

Alibaba is trying to diversify its businesses while simultaneously tapping more of the 557 million Chinese who access the Internet from their smartphones and tablets.

Alibaba announced at least $2.4 billion in investments the past 12 months, including a Chinese soccer team, smartphone maker and mobile application for hailing taxis.
The company’s overseas strategy has seen it start e-commerce sales in Russia, Brazil and India through its AliExpress service.

Ma has set a goal of getting 50 percent of sales from outside China as it expands beyond the country’s urban areas. That effort comes as the nation’s economy is projected to grow at its slowest pace since 1990.

“We will go further to build a global network,” Zhang said in an interview Thursday with Bloomberg Television.

Online commerce from China accounted for 80 percent of total revenue in the March quarter, while international e-commerce sales were just 9 percent of the company’s total, Alibaba said.

As it deals with the slowing Chinese economy, Alibaba also is battling criticism from the government. In January, a report by the State Administration for Industry & Commerce accused Alibaba of allowing merchants to operate without required business licenses, to run unauthorized stores that co-opt famous brands and to sell fake wine and handbags.

“Perhaps Jack is sending a signal to the capital markets and the regulator that he’s willing to make changes,” said Mike Clendenin, managing director of RedTech Advisors.

Source: Bloomberg

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not vested

China's E-Commerce Giant By Lulu Yilun Chen and Aaron Clark

Just how dominant is Alibaba in China’s booming e-commerce market?

The homegrown Amazon/EBay mashup accounted for 54 percent of the country’s package deliveries in the 12 months that ended in June 2014.

On one holiday later that year, it logged $5.9 billion in transactions, and the business done over its sites accounted for the equivalent of almost 2 percent of China’s GDP in 2012.

There are lots of attention-grabbing Internet companies that hope to make money off of trend-hopping teens; Alibaba is building an empire on the spending power of Chinese farmers, laborers and white-collar workers. That could add up:

By the end of 2015, more than 850 million Chinese are expected to be online — more than the population of any other country except India. As if that market wasn’t big enough, it’s also casting its eyes overseas.

http://www.bloombergview.com/quicktake/alibaba

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Alibaba revenue tops bearish expectations, new CEO named BY JOHN RUWITCH AND PAUL CARSTEN

(Reuters) - Alibaba Group Holding Ltd (BABA.N) on Thursday posted a 45 percent rise in quarterly revenue, and shares of the Chinese e-commerce company jumped nearly 7 percent as investors cheered a smoother-than-expected transition to mobile transactions, which surpassed those from personal computers for the first time.

The company said Chief Operating Officer Daniel Zhang would become chief executive on May 10, replacing Jonathan Lu. Lu was CEO for two years, a low-key leader who was frequently eclipsed by outspoken founder and Executive Chairman Jack Ma. Lu will remain on the board as vice chairman.

Alibaba's quarterly revenue jumped 45 percent to $2.81 billion, beating the average analyst estimate of $2.77 billion according to Thomson Reuters I/B/E/S. Shares jumped 6.9 percent to $85.54 at midday in the U.S. trading session.

"It was a very good quarter which is especially important considering there were a lot of expectations that the results would not come in strong," said Gil Luria of Wedbush Securities. "Sentiment is going to swing back to the favorable side."

Zhang takes the helm as the sprawling e-commerce company puts greater emphasis on reaching customers via mobile devices in China, the world's biggest smartphone market.

The company did not explain the reason for the change but Executive Chairman Ma said in a letter to staff he was pleased to see the reins going to a leader born in the 1970s. Zhang was born in 1972 while his predecessor was born in 1969.

Despite the change, Ma is seen as the driving force and the public face of the company. Analyst Tian Hou at Capital Research in Beijing said Zhang would be a thorough executive who executes well and believes in consensus. “He quietly gets things done,” she said.

Despite the strong fourth quarter, the incoming CEO could face slowing growth as saturation among online shoppers threatens to hobble expansion, along with stiff competition from domestic rivals Tencent Holding Ltd (0700.HK), Baidu Inc (BIDU.O) and JD.com Inc (JD.O) on mobile.

The total value of transactions made on Alibaba's platforms, known as gross merchandise volume (GMV), grew 40 percent to $97 billion in the quarter ended March 31. This was the [b]lowest rate of growth in at least 11 quarters,[/b] despite sales on mobile devices growing 257 percent year-on-year to account for 51 percent of overall GMV.

Alibaba may also be facing e-commerce user saturation. The increase of annual active buyers, or customers who buy at least one product a year via Alibaba, was the smallest in 3-1/2 years, up 5 percent from the previous quarter to 350 million.

The group will continue investing in areas such as digital entertainment, cloud computing and mobile Internet, Chief Financial Officer Maggie Wu told a conference call.

Zhang will also take on decelerating profit growth.

Alibaba's net income excluding extraordinary and one-off items grew 16 percent year-on-year, a far cry from 48 percent growth the previous year and triple-digit gains in the 12 months before that.

Source: Reuters

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How to Play Alibaba (NYSE: BABA) Stock After Earnings By KYLE ANDERSON

Alibaba Group Holding Ltd. (NYSE: BABA) stock opened up 11% today (Thursday) at $88.78 after a stellar earnings report.

Alibaba officials reported earnings per share (EPS) of $0.48 on revenue of $2.81 billion. Analysts had expected EPS of $0.42 and $2.77 billion in revenue. The revenue figure was 45% higher than last year.

From Alibaba's earnings presentation.
This quarter marked the end of FY 2015 for Alibaba. For the full-year, revenue was $12.3 billion. That was 45% higher than 2014.

Alibaba also announced that Daniel Zhang will be taking over as the firm's CEO. According to Executive Chairman Jack Ma, the move is part of a larger effort to bring young leaders into the company. Zhang, 42, was previously Alibaba's COO.

Another bullish number in today's report was gross merchandise volume (GMV), or total money spent over Alibaba's platforms. GMV in the March quarter was $97 billion. That was an increase of 40%. For FY 2015, GMV was up 46% to $394 billion.

GMV was boosted by strong user growth. Alibaba now has more than 350 million monthly active users. By comparison, the entire population of the United States is just 319 million.

While those announcements all contributed to BABA stock's rise today, there's one figure that's much more important…

The Most Important Number in Today's Alibaba Earnings Report

As we've said at Money Morning since the Alibaba IPO, the most important part of Alibaba's business is mobile.

"Alibaba is gaining traction in its home market in China just as that country's people are truly joining the Internet revolution," Money Morning's Defense and Tech Specialist Michael Robinson said. "And the development of easy-to-use mobile commerce is giving Alibaba a strong tailwind."

Alibaba said revenue from mobile climbed an incredible 352% in the March quarter to $846 million. The company announced that mobile revenue now accounts for 40% of total sales.

The company now has 289 million mobile users.

Alibaba did note that its mobile monetization rate – the measure of revenue per purchase – slipped to 1.73% from 1.96% last quarter. But the company attributed the fluctuation to seasonality.

Alibaba has invested heavily in its mobile development. In February, it spent $590 million on a minority stake in the Chinese smartphone maker Meizu. Before that, Alibaba spent $1.9 billion on the mobile web developer UCWeb. It also dropped $215 million for a minority stake in the messaging app Tango.

Those investments are starting to pay off.

And they're a major reason why our experts are incredibly bullish on BABA stock. Here's how high they see the BABA stock price climbing…

"This company has market power, a visionary leader, and it's making smart decisions," Money Morning's Executive Editor Bill Patalon explained. "They're trying to build something special – a paradigm-shifting, rule-breaking company. They're trying to create new ways of doing things."

Alibaba has a market cap of $213 billion right now. But Patalon sees Alibaba becoming a $1 trillion company by 2020.

At that market cap, BABA stock will be roughly $400 per share. That's a gain of 350% in the next five years.

Patalon says that investors need to look past BABA stock's uninspiring 2015 performance. Year to date, BABA is still down almost 18%.

"This is a normal thing for a stock after an IPO," Patalon said. "People rushed in and probably drove the price up higher than it was worth at the time."

But that doesn't diminish the company's potential.

"What you have to look at is the long-term potential, which is still huge," Patalon said. "They still haven't even maxed out their own market. They're bringing in entertainment companies and new business-to-business ventures. They're going to keep expanding their offerings."

"This isn't just a stock to buy for 2015," he continued. "This is a great investment for years to come. If you invest money that you can afford to lose and hold onto the stock for several years, you'll end up being very surprised by how much you've made."

The Bottom Line: BABA stock is climbing today after an impressive earnings report and the announcement of a new CEO. But the most important figure from the report was mobile revenue, which climbed more than 350%. Mobile will be the biggest catalyst for BABA stock moving forward, and it's a big reason why we see Alibaba becoming a $1 trillion company.


Source: Money Morning