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

[behappyalways]

Alibaba breakup begins with spinoff of US$12 billion cloud arm
https://www.theedgesingapore.com/digita ... -cloud-arm

[winston]

vested

Alibaba Group (9988 HK / BABA US) - Recovery more gradual than expected; corporate restructuring heats up

Alibaba’s (9988 HK) 4QFY23 (financial year ending Mar 2023) results came in slightly below expectations with recovery slower than expected.

On a positive note, operating trends have been improving since Mar 2023.

Alibaba announced a series of corporate restructuring actions, which is likely to see a spin-off of cloud, international commerce, logistics and grocery retail businesses over the next 6-18 months, which could provide catalysts for Alibaba’s share price.

Management highlighted plans to refocus their attention on the core e-commerce product (Taobao and Tmall), investing resources to focus on user growth and retention by improving user experience and service offering.

Overall, we view management’s focus on improving the competitiveness of the core platform as a positive but will prefer to wait and see if the company can deliver on the execution.

We still think FY24 should be a recovery year for the company as:
1) CMR should post stronger growth than gross merchandise value (GMV) in FY24 due to Covid-19 related one-off disruptions in FY23;
2) GMV should have a cyclical recovery together with the economy in FY24, and
3) relatively low valuations are supportive of further upside.

BUY.

Source: OCBC

[winston]

vested

ALIBABA Group’s surprise move to fully spin out a potentially transformative US$12 billion cloud business is stirring speculation about whether the Chinese e-commerce leader bowed to market or political realities.

Chief executive officer Daniel Zhang dropped a bombshell on Thursday (May 19) when he unveiled the contours of Alibaba’s historic six-way shakeup for the first time.

Included among the listing and financing of a plethora of businesses was a plan to fully relinquish control of the business known as Alibaba Cloud, a once-thriving operation that harboured the potential to supercharge the company the way Amazon Web Services grew to signify Amazon.com Inc.

Source: Phillips

[winston]

vested

Gaining users now the top priority

Revenue was Rmb208bn in Mar-q, up 2% yoy, driven by international commerce, Cainiao and local commerce. CMR was down 3% yoy, slightly below our expectation.

Adjusted EBITA was up 60% yoy, beating our expectation, driven mainly by improved margins for China commerce and cloud, and narrowed losses from other businesses.

We expect revenue and non-GAAP net profit to grow by 6.9% and 11.3% yoy in FY3/24F, driven by domestic consumption recovery.

Alibaba’s restructuring is in progress, with a timeline set up for potential IPOs for Freshippo, Cainiao and Cloud business in the next 6–18 months.

We reiterate our Add rating with a new DCF-based TP of HK$168.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 9E73B7E685

[winston]

vested

Earnings First Take: 4QFY3/23 earnings beat, cloud business spin-off via stock dividend to enhance shareholder value

Revenue increased by 2% y-o-y to Rmb208bn, with China commerce revenue declining by 3%

The recovery pace of China commerce and Cloud is slightly slower than market expectations

Non-GAAP net income increased by 38% to Rmb27bn, better than market expectations mainly due to cost optimisation

Key positives include company’s target to spin-off cloud business via stock dividend and complete Freshippo and Cainiao IPO in the next 6-18 months

The resumption of Alibaba’s core commerce growth and cloud business spin-off are near-term catalysts for Alibaba.

Maintain BUY on Alibaba with TPs of HK$167/US$172.

Our current valuation is based on (
1) core commerce: 15x PE FY3/24F core commerce earnings (HK$132),
(2) cloud: 5x PS on FY3/24F (HK$26), and
(3) digital media and entertainment: 5x PS on FY3/24F (HK$10).

While pending more disclosures on the spinoff, our preliminary estimation on potential value for the remaining business reached HK$32 :-
(4) Cainiao: 1x P/S FY3/24 or HK$96bn (HK$4),
(5) local services: HK$373bn or (HK$15), and
(6) international commerce: 3x P/S FY3/24 (HK$12).

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=14418

[winston]

vested

Alibaba Group (9988 HK)
4QFY23: Solid Earnings Growth; Full Spin-off Of Alibaba Cloud

Alibaba delivered better-than-expected 4QFY23 results.

Revenue came in at Rmb208.2b, growing by 2% yoy, in line with street estimates.

Non-GAAP net profit was Rmb27.4b, up 38% yoy and beating street estimates by 11%, with net margin improving sequentially to 13%.

The company announced a comprehensive capital management plan, including a full spin-off of the Cloud Group via stock dividend distribution.

Maintain BUY with a lower target price of HK$142.00 (US$146.00).

Source: UOBKH

https://research.uobkayhian.com/content ... 2bd9132369

[winston]

vested

Earnings Alert: 4QFY3/23 earnings beat on cost control, expect moderate growth of Cloud and China commerce

4QFY3/23 revenue in line, China commerce & Cloud revenue slower than expected

Expect slow pace of growth recovery in Jun quarter but still encouraging margin improvement

Lowered FY3/24F earnings by 3% on slower revenue growth

Maintain BUY with lower TP of HK$162/US$166

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=14467

[behappyalways]

Alibaba to cut 7% of workforce in its cloud unit as it pursues IPO for the division
https://www.cnbc.com/2023/05/23/alibaba ... -ipo-.html

[behappyalways]

Big layoffs are fake! Alibaba called 6 major businesses to recruit 15,000 people and was cut off 7% of the manpower to pave the way for IPO... Alibaba Cloud: normal organization optimization


大裁員假的!阿里巴巴喊6大業務招募1.5萬人 遭爆砍7%人力鋪路IPO...阿里雲:正常組織優化｜非凡財經新聞｜20230526

https://m.youtube.com/watch?v=J6RTNVIjLhA

[behappyalways]

E-commerce firms avoided discussing gross merchandise value numbers, once a key indicator of success, after China’s second-largest shopping festival concluded


China’s 618 shopping festival loses its shine, as Alibaba and JD.com avoid sales figures for more flattering data
https://www.scmp.com/tech/big-tech/arti ... flattering