BABA

Alibaba Group Holding Ltd - ADR

TMT, Consumer


Presented:09/21/2022
Price:$81.60
Cap:$216.09B
Current Price:$101.84
Cap:$243.90B

Presented

Date09/21/2022
Price$81.60
Market Cap$216.09B
Ent Value$271.40B
P/E Ratio44.53x
Book Value$54.30
Div Yield0%
Shares O/S2,648.14M
Ave Daily Vol21,535,314
Short IntN/A

Current

Price$101.84
Market Cap$243.90B
Alibaba Group Holding Ltd. engages in providing online and mobile marketplaces in retail and wholesale trade. It operates through the following business segments: Core Commerce, Cloud Computing, Digital Media & Entertainment, and Innovation Initiatives and Others. The Core Commerce segment consists of platforms operating in retail and wholesale. The Cloud Computing segment consists of Alibaba Cloud, which offers a complete suite of cloud services, including elastic computing, database, storage, network virtualization, large scale computing, security, management and application, big data analytics, a machine learning platform and Internet of Things (IoT) services. The Digital Media & Entertainment segment relates to the Youko Tudou and UC Browser businesses. The Innovation Initiatives and Others segment includes businesses such as AutoNavi, DingTalk, and Tmall Genie. The company was founded by Chung Tsai and Yun Ma on June 28, 1999 and is headquartered in Hangzhou, China.

Publicly traded companies mentioned herein: Alibaba Group Holding Ltd (BABA), Meituan (3690 HK), NetEase Inc (NTES), SoftBank Group Corp (9984 JP), Tencent Holdings Ltd (700 HK)

Highlights

The presenter is long shares of Alibaba Group Holding Ltd (BABA), believing that earnings growth will resume in FY2024 (FY2023 ends March 2023) based on cost rationalization efforts in BABA’s loss-making businesses and a recovery in Chinese retail consumption as COVID restriction are phased out. He also sees a near-term catalyst as BABA’s primary listing switches from the NYSE to Hong Kong, which the company expects to be completed by year-end. At that point, BABA will be available for mainland Chinese investors to buy for the first time. At the current $83 share price, he considers the risk/reward setup attractive even if one or more of these catalysts doesn’t occur, and is modeling downside of $75 per share against his SOTP price target of $205. 

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Idea Discussion

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