Remember Ali Baba, a poor woodcutter who opened the secret treasure den with a well-known phrase, “Open Sesame”? It is a famous Arabian Night tale in 18th century. In the 21st century, emerging is a giant Chinese e-commerce company based in China, providing a variety of services, including electronic payment services, shopping search engine and data-centric cloud computing services. It helped to connect overseas buyers with local Chinese manufactures back in 1999 and now it is still reiterating the phrase, “Open Sesame”, to open up China’s domestic e-commerce market. With its immense number of affiliations, Alibaba is seeking to become the next Amazon. Read on to find out how its stock is performing relative to their goal of becoming the next largest e-commerce company in the world.
(Released on Aug 18 2016)
Alibaba reported first quarter fiscal year 2017 earnings of 52 cents per share, exceeding Zacks Consensus Estimate of 38 cents. Its share gained 5.1%. Reported revenue is up 33.0% sequentially and 58.8% year over year. Alibaba has reported impressive revenue growth from four different segments: Core Commerce, Cloud Computing, Digital media and Entertainment, and Innovation Initiatives. Core Commerce segment is showing 123% promising growth rate, which is mainly driven by Lazada – its subsidiary. In the Cloud Computing segment, Aliyun reported an incredible 156% YoY growth, which is expected to cover the high content expenses in the long term. Alibaba is now trying to expand its cloud business worldwide by providing a path for other global tech companies to enter the Chinese market, with the help of Aliyun’s infrastructure. BABA still remains as a “buy” option for investors as they have Aliyun, digital media and entertainment and global e-commerce expansion as their emerging revenue streams despite China’s underperforming economy.
(Released on August 18 2016)
BABA stock rose in the intraday level, scoring a profit of 0.35% in the last session as the stock settles above the support of 96.01. It is expected that the stock will gain more momentum, potentially hitting the resistance level of 106.56, provided it settles above 96.01 again.
(Released on August 16 2016)
Alibaba has successfully boosted its mobile gross merchandise volume (GMV) up to 75% of its total GMV. At the same time, its mobile monetization rate has surpassed that of PC, exceeding past PC’s revenue by 0.02%. Its retail mobile GMV has reached the $94 billion mark, up 69% YoY due to higher conversion rate to mobile platform. The increasing mobile take rate is sustainable in the long run since the conversion becomes simpler. It presents a tempting option for merchants to spend more money to market on its mobile platform.
(Released on Aug 18 2016)
BABA aims to enter the domestic e-commerce market by early next year, and has been planning to acquire online marketplace ShopClues and Paytm. ShopClues is an online flea market, which sells cheaper and unbranded products to shoppers. It is reported to have a revenue of $750 million. Jack Ma is also looking to put more stakes in Flipkart, merge smaller Indian rivals and scale up investment in Snapdeal to defend against Amazon. Alibaba is valuing ShopClues at around $1 billion but management is negotiating for a higher valuation. BABA, which holds about 40% stake in Paytm, has already moved forward with the plan to separate Paytm’s core payment business and commerce business into two separate entities.