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

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Earnings First Take: 1QFY3/24 core earnings grew 48%, beating expectations, with China commerce resuming double-digit growth (+ve)

Revenue increased by 14% y-o-y to Rmb234bn, with Taobao and Tmall revenue increasing by 12%

Non-GAAP net income surged 48% to Rmb35bn, above market expectations on stronger-than-expected revenue growth

Expect positive share price reaction to strong growth momentum and earnings beat

TP: HK$162

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=15487

[winston]

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Alibaba Group
Good execution post-restructuring

Revenue reached Rmb234bn in the quarter ended-Jun 23 (1QFY3/24F), +14% yoy, driven by solid growth in all segments.

Revenue of Tmall/Taobao grew by 12% yoy.

1QFY3/24 adjusted EBITA margin reached 19% (+2% pts yoy, beating our expectation), driven mainly by narrowed losses from other businesses.

We expect revenue and non-GAAP net profit to grow by 9.1% and 15.8% yoy in 1QFY3/24F, driven by user-focus strategy efficiency and more merchants.

Alibaba’s 1Q results proved its successful execution post-restructuring, and the potential IPOs for Freshippo, Cainiao and Cloud for next 6-18 months are on track.

We reiterate our Add rating with a higher DCF-based TP of HK$172.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 40A3583090

[winston]

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Alibaba Group (9988 HK / BABA US) - 1QFY24 results beat, cyclical recovery underway

Alibaba’s (9988 HK / BABA US) 1QFY24 (financial year ending Mar 2024) results came in above expectations, with strong 618 sales contributing positively.

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 continue to believe that 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 (9988 HK / BABA US).

Source: OCBC

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Jack Ma continues to focus on agriculture, education as Alibaba undergoes sweeping changes

Ma thanked the teachers for their contribution to developing education in China’s rural areas, and shared his experience in agriculture technology

In recent months, the 58-year-old has returned to public life as an educator and researcher, taking on new titles at different schools around the world

by Ann Cao

Source: SCMP

https://www.scmp.com/tech/big-tech/arti ... 128de2a60b

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Shares of Alibaba tumble over 3% after outgoing CEO unexpectedly quits cloud business
https://www.cnbc.com/2023/09/11/alibaba ... ness-.html

[winston]

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Alibaba Group Holding will put artificial intelligence (AI) and user experience at the top of its priorities, as its new leadership seeks to reclaim customers and market share in a fiercely competitive arena.

Chief executive officer Eddie Wu laid out his vision in a memo to staff on Tuesday (Sep 12) for the first time since officially taking over from veteran Daniel Zhang.

Wu stressed that Alibaba must adjust its approach to go AI-first, while not forgetting the hundreds of millions of users who helped create one of China’s largest corporations.

The Hangzhou-based e-commerce leader will reinforce strategic investments in the areas of AI-driven tech businesses, Internet platforms and its global commerce network, Wu said.

Source: Phillips

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Alibaba's logistics arm files for US$1b HK IPO

Alibaba will continue to hold more than 50 percent of the unit's shares, and Cainiao will remain a subsidiary of the company.

The first-time share sale could raise at least US$1 billion (HK$7.8 billion), and banks including Citic Securities, Citigroup and JP Morgan Chase have been working on the deal.

Cainiao promises to deliver packages in China within 24 hours and anywhere else in the world in 72 hours. It operates over 300 international routes partnering with more than 3,000 logistics partners.

Source: Bloomberg

https://www.thestandard.com.hk/section- ... $1b-HK-IPO

[winston]

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Alibaba's logistics arm files for US$1 billion-plus IPO

Revenue from Alibaba Group accounted for 30% of Cainiao sales over the past three fiscal years and average daily parcel volume increased from 0.7 million in 2017 to 4.8 million in 2023, it said.

Cainiao’s revenue for the three months ended June 30 rose 34% to 23.16 billion yuan. The company reported net income of 391 million yuan for the quarter, compared with a net loss of 338 million yuan the same time last year.

Adjusted Ebitda, a measure of operating profit that strips out one-off items and the effects of stock awards, increased 185% from a year earlier to 1.81 billion yuan.

Source: Bloomberg

https://www.theedgesingapore.com/news/i ... paign=FREE

[winston]

News Alert: Proposal to spin-off and separately list Cainiao at HKEx

Alibaba announced to list its logistics unit Cainiao, and expects to retain c.50% ownership, vs 69.5% currently

Market estimates Cainiao’s valuation at c.US$20bn, which translates to c.HK$5 per share for Alibaba

Cainiao with high growth is the best option to kick off IPO, followed by Freshippo and Cloud Intelligence Business

Positive to stock sentiment, but value unlocked remains limited. The spin-off and separate listing of Cainiao aligns with market expectations following the announcement to re-organise the company into six business units in May 2023.

According to market news, Cainiao is expected to raise US$1bn from the IPO and the estimated valuation is c.US$20bn, or c.HK$5 per Alibaba share (based on 69.54% stake in Cainiao).

This represents a premium compared to SF (9699 HK)'s 0.4x P/S and JD Logistics' 0.3x P/S. Compared with J&T Express (filed for IPO), Cainiao is larger in terms of revenue scale and market share.

J&T Express net profit turned positive in 2022 but was boosted by fair value gains, the adjusted net loss was US$799m.

The next entities to spin-off and IPO will likely be Freshippo and Cloud Intelligence Business, which are likely to take place in mid-2024.

Maintain BUY on Alibaba with TPs of HK$169/US$171.

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=16278

[winston]

HSBC Global Research: BABA Spinning-off Cainiao Helps Unlock Value; Maintains Buy, TP $138

BABA-SW (09988.HK)'s proposed spin-off listing of Cainiao could help unlock value, HSBC Global Research commented in a report.

A previous Reuters report stated that the listing of Cainiao could fetch at least USD1 billion.

It would be beneficial to BABA-SW across multiple levels, and would also attest the group's execution ability and commitment to reshaping its corporate structure.

According to an analysis conducted by the broker, Cainiao should be valued at USD 6-23 billion under different scenarios, equivalent to about 2-8% of BABA-SW's market capitalization.

The broker kept the Buy rating for BABA-SW, with a target price of $138.

Related News - CICC: Alimama, Tencent Ad Tie Tighter Knots, Enjoy Mutual Benefit, Win-win outcome

With its key clients being brands and merchants affiliated with BABA-SW's e-commerce ecosystem, Cainiao should benefit from the robust growth of BABA-SW's international business, the broker elaborated.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN