Good surprise at Alibaba Group Holdings – Stocks

After 18 very difficult months, the e-commerce company ended the last quarter of its staggered fiscal year with satisfactory results, hailed by the market. Its price could end up recovering considerably.

Alibaba shareholders have been gritting their teeth for a year and a half. It all started at the end of 2020, with the torpedoing of the IPO of the fintech Ant Group (33% in the hands of Alibaba). This listing in Shanghai should have been the largest IPO ever (34.4 billion dollars). The project had boosted the market capitalization of the e-commerce company to more than $700 billion, which was tantamount to bringing it into the world’s top 10. But the criticisms made by Jack Ma, the founder of Alibaba, against the regulatory authorities, have been little appreciated…

Alibaba shareholders have been gritting their teeth for a year and a half. It all started at the end of 2020, with the torpedoing of the IPO of the fintech Ant Group (33% in the hands of Alibaba). This listing in Shanghai should have been the largest IPO ever (34.4 billion dollars). The project had boosted the market capitalization of the e-commerce company to more than $700 billion, which was tantamount to bringing it into the world’s top 10. But the criticisms expressed by Jack Ma, the founder of Alibaba, against the regulatory authorities, were little appreciated, in particular by President Xi Jinping. It therefore only took 18 months for the stock to lose more than 70% of its value; one of Asia’s greatest success stories therefore saw, at one point, nearly $500 billion in market valuation go up in smoke. But the results this time around are satisfactory, and hailed by the market. Alibaba ended the last quarter of its 2021/22 fiscal year (ending 3/31) with revenue of 204.05 billion yuan (CNY), or $32.19 billion (consensus: 200 CNY.59 billion). It is, of course, the lowest quarterly growth rate (9%) since the IPO in 2014 – the company had accustomed us to at least 20%. Alibaba counted 1.31 billion active mobile users of its marketplace at the end of March, including, for the first time, more than a billion in China itself. This is a phenomenal figure, up 28.3 million compared to the end of 2021. Full-year sales increased by 19% to CNY 853.06 billion. The most vigorous growth can be attributed to international activities (+25%) and Cloud (+23%); the lowest (+18%) concerns the China division itself, which nevertheless still represents 69% of consolidated sales. The 23% year-on-year decline in operating cash flow (EBITDA) to CNY 130.40 billion is disappointing. Profit for the year reached 69.64 billion CNY, down 22% (but 16.72 billion on a quarterly basis, better than the consensus). Alibaba has become in a decade the first platform for selling China, but the recent turmoil has significantly undermined its impressive growth. The group paid 18.23 billion CNY in fines last year for abuse of a dominant position. Still, the market now seems to let go of its negative feelings about China in general, and Alibaba in particular. At a price/earnings ratio of 15 and an enterprise value (EV)/EBITDA ratio of 8.5 (half less than at the start of 2021, in both cases) expected for the financial year, the stock has tumbled. Hence our recent decision to expand our position. The price may well continue to recover. Tip: BuyRisk: MediumRating: 1BPrice: $109.84Ticker: BABA USISIN Code: US01609W1027Market: NYSECCapit. market: 293.8 billion USDC/B 2021: 13.5C/B expected 2022: 15Perf. course over 12 months: -48%Perf. share price since 01/01: -9% Dividend yield: –

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