eddieadc personal page - To The Moon

eddieadc

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07-25

$Advanced Micro Devices(AMD)$ $AMD 20240830 150.0 PUT$ enough for dinner 😂

2022-01-05

$Lion-OCBC Sec HSTECH S$(HST.SI)$No eye see

2021-07-31

Over the past 7 quarterly reporting sessions,AliBABA stock fell. Would it break the streakon 3 Aug 2021? Hopefully will break 200+++

Sorry, the original content has been removed

2021-07-26

$Tencent Holding Ltd.(TCEHY)$ Very painful day

2021-07-26

$Alibaba(BABA)$buy the dip!!!

2021-07-22

Looking good

2021-07-07

$Alibaba(BABA)$ time to go to the moon!

Sorry, the original content has been removed

2021-06-28

$ALB 210729 205.00 CALL(ALB.HK)$$Alibaba(09988)$ that’s the way … to the moon

2021-06-26

$ALB 210729 205.00 CALL(ALB.HK)$$Alibaba(09988)$ On the hindsight should have whacked more call options… BABA to the moon

2021-06-23

$ALB 210729 205.00 CALL(ALB.HK)$$Alibaba(09988)$ keep going up

2021-06-18

$NVIDIA Corp(NVDA)$to the moon

2021-05-28

$Altimeter Growth Corp.(AGC)$Grab AGC to the moon. Let the short sellers pay for ourlunch

2021-05-15

$Altimeter Growth Corp.(AGC)$Waiting...

2021-05-14

$Alibaba(09988)$ very painful today ?

2021-05-14

Excellent article

Alibaba: Resiliency Amid Increased Regulatory Clampdown

2021-05-10

$NIO Inc.(NIO)$Yeah

2021-05-09

$Alibaba(09988)$hopefully it will improve with the earnings announcement

2021-05-05

$Altimeter Growth Corp.(AGC)$?

2021-05-03

Go go go ALIBABA

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Would it break the streakon 3 Aug 2021? Hopefully will break 200+++","listText":"Over the past 7 quarterly reporting sessions,AliBABA stock fell. Would it break the streakon 3 Aug 2021? Hopefully will break 200+++","text":"Over the past 7 quarterly reporting sessions,AliBABA stock fell. Would it break the streakon 3 Aug 2021? Hopefully will break 200+++","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/802386197","repostId":"2155915751","repostType":2,"isVote":1,"tweetType":1,"viewCount":149,"authorTweetTopStatus":1,"verified":2,"comments":[{"author":{"id":"3577512169946317","authorId":"3577512169946317","name":"Guardian_J","avatar":"https://static.tigerbbs.com/d5732d3790ba7ded4910ae093423ed15","crmLevel":7,"crmLevelSwitch":1,"idStr":"3577512169946317","authorIdStr":"3577512169946317"},"content":"looking at $280.","text":"looking at $280.","html":"looking at $280."}],"imageCount":0,"langContent":"EN","totalScore":0},{"id":800448950,"gmtCreate":1627314617070,"gmtModify":1703487525607,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/TCEHY\">$Tencent Holding Ltd.(TCEHY)$</a> Very painful day","listText":"<a href=\"https://laohu8.com/S/TCEHY\">$Tencent Holding Ltd.(TCEHY)$</a> Very painful day","text":"$Tencent Holding Ltd.(TCEHY)$ Very painful 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moon!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/140851899","repostId":"1195805799","repostType":2,"isVote":1,"tweetType":1,"viewCount":145,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":150931126,"gmtCreate":1624880836665,"gmtModify":1703846884444,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/ALB.HK\">$ALB 210729 205.00 CALL(ALB.HK)$</a>$Alibaba(09988)$ that’s the way … to the moon","listText":"<a href=\"https://laohu8.com/S/ALB.HK\">$ALB 210729 205.00 CALL(ALB.HK)$</a>$Alibaba(09988)$ that’s the way … to the moon","text":"$ALB 210729 205.00 CALL(ALB.HK)$$Alibaba(09988)$ that’s the way … to the moon","images":[{"img":"https://static.tigerbbs.com/4abf5108cd7a135d0dcbf2ea798437e1","width":"1125","height":"2183"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/150931126","isVote":1,"tweetType":1,"viewCount":135,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":125484161,"gmtCreate":1624686452253,"gmtModify":1703843662395,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/ALB.HK\">$ALB 210729 205.00 CALL(ALB.HK)$</a>$Alibaba(09988)$&nbsp;On the hindsight should have whacked more call&nbsp;options… BABA&nbsp;to the moon","listText":"<a 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moon","images":[{"img":"https://static.tigerbbs.com/4dafbeac7f4c0fc926f46a366a97a39c","width":"1125","height":"2183"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/125484161","isVote":1,"tweetType":1,"viewCount":100,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":123719172,"gmtCreate":1624438617396,"gmtModify":1703836696627,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/ALB.HK\">$ALB 210729 205.00 CALL(ALB.HK)$</a>$Alibaba(09988)$ keep going up","listText":"<a href=\"https://laohu8.com/S/ALB.HK\">$ALB 210729 205.00 CALL(ALB.HK)$</a>$Alibaba(09988)$ keep going up","text":"$ALB 210729 205.00 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Let the short sellers pay for ourlunch","listText":"<a href=\"https://laohu8.com/S/AGC\">$Altimeter Growth Corp.(AGC)$</a>Grab AGC to&nbsp;the moon. Let the short sellers pay for ourlunch","text":"$Altimeter Growth Corp.(AGC)$Grab AGC to the moon. Let the short sellers pay for ourlunch","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/134348780","isVote":1,"tweetType":1,"viewCount":104,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":196268056,"gmtCreate":1621058610675,"gmtModify":1704352585642,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/AGC\">$Altimeter Growth Corp.(AGC)$</a>Waiting...","listText":"<a href=\"https://laohu8.com/S/AGC\">$Altimeter Growth Corp.(AGC)$</a>Waiting...","text":"$Altimeter Growth Corp.(AGC)$Waiting...","images":[{"img":"https://static.tigerbbs.com/bd0b1809243fb2c6c2bafeeaf773d24a","width":"1125","height":"1949"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/196268056","isVote":1,"tweetType":1,"viewCount":201,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":198438837,"gmtCreate":1620978998229,"gmtModify":1704351449364,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/09988\">$Alibaba(09988)$</a>&nbsp;very painful today ?","listText":"<a href=\"https://laohu8.com/S/09988\">$Alibaba(09988)$</a>&nbsp;very painful today ?","text":"$Alibaba(09988)$ very painful today ?","images":[{"img":"https://static.tigerbbs.com/62c4752bcf900bbdc5d8e7b3de00f1b1","width":"1125","height":"2183"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/198438837","isVote":1,"tweetType":1,"viewCount":335,"authorTweetTopStatus":1,"verified":2,"comments":[{"author":{"id":"3560227015697068","authorId":"3560227015697068","name":"Jonnnn","avatar":"https://community-static.tradeup.com/news/1f0ea140fe5b70ffc0a2016e6bdb3048","crmLevel":4,"crmLevelSwitch":0,"idStr":"3560227015697068","authorIdStr":"3560227015697068"},"content":"We have the same cost price! I’m waiting for HKD$197 To average down. Order didn’t fill today.","text":"We have the same cost price! I’m waiting for HKD$197 To average down. Order didn’t fill today.","html":"We have the same cost price! I’m waiting for HKD$197 To average down. Order didn’t fill today."}],"imageCount":1,"langContent":"EN","totalScore":0},{"id":198223626,"gmtCreate":1620963074765,"gmtModify":1704351224068,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"Excellent article","listText":"Excellent article","text":"Excellent article","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/198223626","repostId":"1135477773","repostType":2,"repost":{"id":"1135477773","kind":"news","pubTimestamp":1620725752,"share":"https://ttm.financial/m/news/1135477773?lang=&edition=fundamental","pubTime":"2021-05-11 17:35","market":"hk","language":"en","title":"Alibaba: Resiliency Amid Increased Regulatory Clampdown","url":"https://stock-news.laohu8.com/highlight/detail?id=1135477773","media":"seekingalpha","summary":"Alibaba’s strong fundamentals of its core commerce platforms are buoyed by its massive user base and are underpinned by Chinese consumption growth.Its cloud segment is poised to reach profitability achieving economies of scale, which provides upside to its margins.Other segments such as Ant Group continue to face regulatory threats to its consumer lending unit, which could be subject to stricter regulations.It is also carefully navigating anti-monopolistic regulations on the business practices o","content":"<p><b>Summary</b></p>\n<ul>\n <li>Alibaba’s strong fundamentals of its core commerce platforms are buoyed by its massive user base and are underpinned by Chinese consumption growth.</li>\n <li>Its cloud segment is poised to reach profitability achieving economies of scale, which provides upside to its margins.</li>\n <li>Other segments such as Ant Group continue to face regulatory threats to its consumer lending unit, which could be subject to stricter regulations.</li>\n <li>It is also carefully navigating anti-monopolistic regulations on the business practices of its core commerce platform as part of a wider industry clampdown.</li>\n</ul>\n<p>The uncertainties surrounding Chinese e-commerce giant Alibaba (BABA) persist, but we still believe that the company’s fundamentals remain robust despite the regulatory crackdown. Alibaba has maintained strong growth in attracting customers to all its platforms. In 2020, the company witnessed a spectacular year despite the pandemic with its massive active user basegrowingby 9.5% YoY at 779 mln users by the end of Q4 2020. Going forward, China’s personal consumption is also forecasted to reach$12.7tln by 2030 at a CAGR of 11.5% reaching the same level as the US. In the long run, the government is also aiming to implementpoliciestargeted towards boosting domestic consumption such as its Made in China 2025 initiative. We are optimistic that the company’s strong fundamentals will allow it to ride therecoveryin consumer confidence and spending.</p>\n<p><b>Number of annual active consumers across Alibaba's online shopping properties ('mln')</b></p>\n<p><img src=\"https://static.tigerbbs.com/03691ef4b09780897472bf710de74bb9\" tg-width=\"526\" tg-height=\"445\" referrerpolicy=\"no-referrer\"></p>\n<p><i>Source:Statista</i></p>\n<p>As discussed in our previous analysis on Alibaba, we expect the company to be able to sustain its growth due to several factors such as:</p>\n<ul>\n <li>Continued robust middle-class growth due to government policies on tax and investments</li>\n <li>Urban migration with the development of supercity clusters where Alibaba has an 85% penetration rate. The urbanisation rate is forecasted to be at75%by 2030 which is 15% higher than the current rate</li>\n <li>Integration of verticals (logistics, cloud, fintech) to support its core commerce platforms</li>\n</ul>\n<p>In terms of its business segment verticals, Alibaba Cloud is the most promising with expanding margins as it grows in scale. This is significant as e-commerce and fintech are the only profitable segments. However, its fintech segment continues to be pressured by the evolving regulatory environment which has cast a shadow over the company’s value. Additionally, we foresee its digital media segment remaining under pressure from intense competition within the Chinese video streaming market which guides our expectation that it may remain unprofitable for the foreseeable future.</p>\n<p><b>Nearing Cloud Profitability May Lead to Margin Upside</b></p>\n<p>Alibaba Cloud is one of the most significant vertical business segments exhibiting strong integration potential with its core commerce platform. It is also the company’s largest non-core commerce business segment besides fintech, accounting for 6% of revenues. Alibaba Cloud became profitable for thefirst timein the previous quarter’searnings report. It achieved a significant milestone with positive adjusted EBITDA during the quarter since its inception in 2009.</p>\n<p><img src=\"https://static.tigerbbs.com/ed6551cd07762322fd52c6b88c3ea35a\" tg-width=\"621\" tg-height=\"470\" referrerpolicy=\"no-referrer\">With the realization of economies of scale, we expect the segment’s profitability to continue rising going forward. Alibaba Cloud is currently the market leader in China with a40%market share. Recently, the company also launched its Hybrid Cloud Partner Program and on-premises appliances which are set to enhance the offering in 2021 and beyond. The keyfocusof this new program is to extend its customer-centric strategy by providing customers a tailored experience of customising the cloud platform. Global companies such asHewlett Packard Enterprise(NYSE:HPE)have already started working with Alibaba Cloud and adopted the hybrid cloud platform to better their relationships with clients. Since Alibaba Cloud is the largest cloud service in China which is an important market, many companies will have to adopt Alibaba cloud into their infrastructure within the APAC region in order to seamlessly collaborate with Chinese clients.</p>\n<p>Overall, this isexpectedto increase demand through 2020 and beyond highlighting the importance of cloud within an organisation. We expect increased cloud adoption coupled with the new hybrid model from the company would allow it to maintain its top spot in the market. As the group realizes economies of scale, the profitability of the segment is set to grow. In comparison, the largest cloud providers excluding Google Cloud command high margins ranging between 29% and 38%. Despite its smaller scale with cloud revenues 5timesless than market leader AWS, Alibaba Cloud is growing at a higher rate than all major providers. As the company gains scale, we expect its profitability to rise in tandem and could attain the profitability levels seen with AWS (AMZN) or Azure (MSFT) within 2 to 3 years if it maintains its rapid growth to catch up with the scale of the top providers.</p>\n<p><img src=\"https://static.tigerbbs.com/5d902ad421fea55928f5b6c2e3e40114\" tg-width=\"623\" tg-height=\"395\" referrerpolicy=\"no-referrer\"><b>Lending Regulatory Developments in Ant Group</b></p>\n<p>The halting of Ant Group IPO has been unfortunate for Alibaba which has a 33%stakein the subsidiary. Ant Group is an unconsolidated subsidiary of Alibaba. It is accounted for in Alibaba’s financial statements using the equity method. This means that the company recognizes its investment in Ant as an asset and records income as equity income. Earlier this year, the governor of the People’s Bank of China’sindicatedthat the company could resume its Ant Financial IPO if it settles the issues on user privacy and lending practices. Due to significant changes in the fintech regulatory environment in China, Ant Group is developing a rectification plan which will need to go through regulatory procedures but is subject to substantial uncertainties. According to its revenue breakdown, the company derives revenues from the payments, lending, asset &amp; wealth management and insurance segments. The key segment at risk relates to its consumer lending activities which accounts for 35% of revenues.</p>\n<p><img src=\"https://static.tigerbbs.com/849d918a361ccd5662e9404f0118d125\" tg-width=\"640\" tg-height=\"360\"></p>\n<p><i>Source: Ant Group,HKEXNews</i></p>\n<p>One of the potential restructuring exercises that may beimposedon Ant Group which has been in the works for several months includes turning the entity into a financial holding company. This means that the company will be subject to more stringent regulatory oversight and capital requirements in line with those ofbanks. Additionally, Ant Group said it would set up a personal credit reporting company that will comply with relevant laws and strengthen the protection of personal information and effectively prevent the abuse of data as part of the restructuring plan. This is unsurprising given the scale of its consumer lending segment which has overshadowed the major Chinese banks in terms of loan volumes as depicted in the chart below.</p>\n<p><img src=\"https://static.tigerbbs.com/31e31fdb0b52728ad39df017e0fce40c\" tg-width=\"640\" tg-height=\"478\"></p>\n<p><i>Source: Financial Time</i></p>\n<p>All in all, the Ant Group has grown to become a key player in the Chinese financial system and it would be reasonable for regulators to pay attention to the company’s affairs due to its significant influence over the economy. We view the heightened pressure on Ant Group’s lending activities to meet the strict banking regulations as essential to maintain a robust financial system and reduce systematic risk. Though, this may adversely impact its profitability and growth for the lending segment. However, we expect the company to at least maintain its place as a key player within the system owing to its rich consumer data and scale it has obtained over the years of rapid growth.</p>\n<p><b>Monopoly Crackdown Risk Lingers on But Not Solely Targeted At Alibaba</b></p>\n<p>Recently, Alibaba has been slapped with afineof $2.75 bln and continues to be closely monitored by Chinese regulators over its business practice of exclusivity on its commerce platform. The regulators are seeking to discourage the practice by major online commerce platforms to coerce merchants to become exclusive sellers on their platforms, this is a practice that has been allegedly done by Alibaba. However, the regulations appear to be aimed at creating a level playing field rather than singling out Alibaba in particular. The company’s vicechairmanhas also provided optimism despite the clampdown that the company has not breached any regulation and the fundamentals remain strong.</p>\n<p>Recent developments show that the Chinese government would not give any leeway to any company when it comes to misconduct. According to the State Administration for Market Regulation (SAMR), besides Alibaba, other Chinese internet giants such as Tencent Holding (OTCPK:TCEHY), Meituan (MEIT), as well as other e-commerce companies including Pinduoduo (PDD), JD.com (JD) were among the companies hauled in for a meeting with the antitrust watchdog, cyberspace administration and the tax authorities. The regulators made clear their stance against the anti-competitive behavior of forcing merchants to pick one platform, abusing their market position and misusing consumer data. The meeting stressed the requirements for these companies to heed their advice and conduct self-inspections of their business practices in the coming month and to publicly disclose their commitment to complying with the laws governing fair business practices. In our view, the rationale for the clampdown by regulators is aimed at promoting the industry growth by creating a level playing field thereby reducing the barriers of entrants of smaller startups and spurring consumer spending activity online by preventing price discrimination and predatory pricing.</p>\n<p>We expect the impact of the Alibaba specifically to be negative in terms of potential market share leadership erosion as merchants would be able to sell on its competitors’ platforms, potentially redirecting some activity there. In broader terms, stricter regulations may encourage the emergence of startups while increasing competitive risk to the company. Based on our revenue projections, for every 1% decrease in market share, the company’s growth reduces by 2.1%. However, with amarket shareof at least 3 times larger than its closest competitor, JD.com, we foresee Alibaba maintaining its lead also cushioned by its massive user base and diverse segments integrated across its platforms which we expect leads to higher customer stickiness. In terms of the positive benefits of regulations that the company may see include higher consumer spending across the board as consumers. The overall rise in the economy may also benefit the company indirectly in the longer term.</p>\n<p>Thus, we believe that Alibaba still stands to lose the most as it does command significant market power due to its large market share. That said, we do not view the company as a total monopoly. We also note that the Chinese e-commerce market is more competitive than perceived with competition from JD.com and Pinduoduo as well as smaller emerging online commerce platforms. Additionally, it has attained its market leadership through organic growth rather than through acquisitions due to the strong capabilities and diverse platforms across segments.</p>\n<p><img src=\"https://static.tigerbbs.com/018b2b65678fc68ca507359ad8ee58d8\" tg-width=\"640\" tg-height=\"360\"></p>\n<p><i>Source: Alibaba, JD.com, Pinduoduo,China Internet Watch,</i></p>\n<p><b>Unprofitable Digital Media Segment Amid Rising Competition</b></p>\n<p>Although the company’s cloud segment is approaching profitability, its digital media segment continues to be losing money and competition in the video streaming market is intensifying. Previously, Youku was the market leader within the digital media segment in China. However, with increased competition from players such as Tencent, Youku’s market share has dropped. The video streaming platform is still among the top platforms used in China.</p>\n<p>The company has focused on original content creation and developing a loyal membership plan which has helped boost the average daily subscriber base by30%. Synergies between Alibaba Pictures (OTC:ABPGF) and Youku are derived through complete in-house production of popular dramas. Alibaba Pictures has also recently seen success by producing the top three grossing films during Chinese New Year. These films accounted for 80% of box office sales during that period in China. Overall, the digital media space has experienced extreme competition in China with Alibaba having to constantly innovate in order to survive among its competitors. For a comparison, the largest streaming providers are Tencent Video and iQIYI(NASDAQ:IQ)with larger user bases than Youku. Additionally, short video streaming services such as Douyin, Kuaishou(OTCPK:KUASF)and Bilibili(NASDAQ:BILI)are also gaining popularity with superior growth rates than Youku.</p>\n<p><img src=\"https://static.tigerbbs.com/ff63e7b514fbd9baa5ed087e665b9820\" tg-width=\"619\" tg-height=\"474\"><b>Valuation</b></p>\n<p><img src=\"https://static.tigerbbs.com/e545d9e1c68a2e605fdc5f6920caa193\" tg-width=\"640\" tg-height=\"360\">The company has a stellar average revenue growth rate of 43.5% in the past 5 years with gross and net margins of 55.5% and 35.3% respectively.</p>\n<p><img src=\"https://static.tigerbbs.com/7f1f17d83a068b0d965af7a99e09d224\" tg-width=\"640\" tg-height=\"360\">As seen in the company's cash flow chart above, the company’s free cash flow position has gradually improved over time as it expanded rapidly, with an average free cash flow margin of 12.31% in the past 10 years.</p>\n<p><img src=\"https://static.tigerbbs.com/df5450f16b71ebfad7591e26ac8f960f\" tg-width=\"617\" tg-height=\"471\">The company’s revenues are projected based on the forecasted growth in the total Chinese e-commerce sales as discussed in the previous analysis. According to the National Bureau of Statistics of China, online retail sales grew strongly at 10% in 2020 at RMB11,760 bln ($1.8 tln) despite the pandemic. Due to the regulatory pressures on the company’s business practices, we conservatively based its market share assumption to decline slightly. Still, the company is forecasted to grow its online sales volume by at least 30%.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/76a8c7f3af97dbfb5354b0fc2007689d\" tg-width=\"622\" tg-height=\"309\"><span>Source: Alibaba,National Bureau of Statistics of China,Fitch, China Internet Watch</span></p>\n<p>Based on an EV/EBITDA of 29.7x (E-commerce industry average) and a discount rate of 9% (company’s WACC), our model shows an upside of 43.7%.</p>\n<p><img src=\"https://static.tigerbbs.com/c75037216a6facb6ce8f17f45de0413d\" tg-width=\"640\" tg-height=\"360\"><i>Source: Khaveen Investments</i></p>\n<p><b>Verdict</b></p>\n<p>Alibaba is supported by its strong fundamentals stemming from its market leadership and massive user base which continues to grow as well as tailwinds from a positive macroeconomic environment as Chinese consumption growth remains robust and China was the only major economy to deliver positive GDP growth in 2020. These factors underpin our thesis for the company in addition to its integration across key vertical business segments. Alibaba Cloud remains the top cloud provider in China and has achieved a significant milestone in becoming profitable since its inception. The rising profitability provides margin upside for the group. However, its other business segments are met with increasing challenges. The company’s fintech business continues to be plagued by regulatory threats where regulators are pushing for compliance with strict requirements especially due to the complexity of Ant’s business structure. Additionally, the digital media segment faces intense competition from rivals backed by Tencent and Baidu which guides our expectation that the segment may continue weighing on margins. Nonetheless, the fundamental strengths of its e-commerce platform which has faced a pushback remain highly attractive as a key proxy to Chinese consumption growth. Overall, we rate the company as a<i>Buy</i>with a target price of<i>$329.72 (US ADR) or HKD319.8 (HK Stock).</i></p>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Alibaba: Resiliency Amid Increased Regulatory Clampdown</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAlibaba: Resiliency Amid Increased Regulatory Clampdown\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-05-11 17:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4426681-alibaba-resiliency-amid-increased-regulatory-clampdown><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nAlibaba’s strong fundamentals of its core commerce platforms are buoyed by its massive user base and are underpinned by Chinese consumption growth.\nIts cloud segment is poised to reach ...</p>\n\n<a href=\"https://seekingalpha.com/article/4426681-alibaba-resiliency-amid-increased-regulatory-clampdown\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"09988":"阿里巴巴-W","BABA":"阿里巴巴"},"source_url":"https://seekingalpha.com/article/4426681-alibaba-resiliency-amid-increased-regulatory-clampdown","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1135477773","content_text":"Summary\n\nAlibaba’s strong fundamentals of its core commerce platforms are buoyed by its massive user base and are underpinned by Chinese consumption growth.\nIts cloud segment is poised to reach profitability achieving economies of scale, which provides upside to its margins.\nOther segments such as Ant Group continue to face regulatory threats to its consumer lending unit, which could be subject to stricter regulations.\nIt is also carefully navigating anti-monopolistic regulations on the business practices of its core commerce platform as part of a wider industry clampdown.\n\nThe uncertainties surrounding Chinese e-commerce giant Alibaba (BABA) persist, but we still believe that the company’s fundamentals remain robust despite the regulatory crackdown. Alibaba has maintained strong growth in attracting customers to all its platforms. In 2020, the company witnessed a spectacular year despite the pandemic with its massive active user basegrowingby 9.5% YoY at 779 mln users by the end of Q4 2020. Going forward, China’s personal consumption is also forecasted to reach$12.7tln by 2030 at a CAGR of 11.5% reaching the same level as the US. In the long run, the government is also aiming to implementpoliciestargeted towards boosting domestic consumption such as its Made in China 2025 initiative. We are optimistic that the company’s strong fundamentals will allow it to ride therecoveryin consumer confidence and spending.\nNumber of annual active consumers across Alibaba's online shopping properties ('mln')\n\nSource:Statista\nAs discussed in our previous analysis on Alibaba, we expect the company to be able to sustain its growth due to several factors such as:\n\nContinued robust middle-class growth due to government policies on tax and investments\nUrban migration with the development of supercity clusters where Alibaba has an 85% penetration rate. The urbanisation rate is forecasted to be at75%by 2030 which is 15% higher than the current rate\nIntegration of verticals (logistics, cloud, fintech) to support its core commerce platforms\n\nIn terms of its business segment verticals, Alibaba Cloud is the most promising with expanding margins as it grows in scale. This is significant as e-commerce and fintech are the only profitable segments. However, its fintech segment continues to be pressured by the evolving regulatory environment which has cast a shadow over the company’s value. Additionally, we foresee its digital media segment remaining under pressure from intense competition within the Chinese video streaming market which guides our expectation that it may remain unprofitable for the foreseeable future.\nNearing Cloud Profitability May Lead to Margin Upside\nAlibaba Cloud is one of the most significant vertical business segments exhibiting strong integration potential with its core commerce platform. It is also the company’s largest non-core commerce business segment besides fintech, accounting for 6% of revenues. Alibaba Cloud became profitable for thefirst timein the previous quarter’searnings report. It achieved a significant milestone with positive adjusted EBITDA during the quarter since its inception in 2009.\nWith the realization of economies of scale, we expect the segment’s profitability to continue rising going forward. Alibaba Cloud is currently the market leader in China with a40%market share. Recently, the company also launched its Hybrid Cloud Partner Program and on-premises appliances which are set to enhance the offering in 2021 and beyond. The keyfocusof this new program is to extend its customer-centric strategy by providing customers a tailored experience of customising the cloud platform. Global companies such asHewlett Packard Enterprise(NYSE:HPE)have already started working with Alibaba Cloud and adopted the hybrid cloud platform to better their relationships with clients. Since Alibaba Cloud is the largest cloud service in China which is an important market, many companies will have to adopt Alibaba cloud into their infrastructure within the APAC region in order to seamlessly collaborate with Chinese clients.\nOverall, this isexpectedto increase demand through 2020 and beyond highlighting the importance of cloud within an organisation. We expect increased cloud adoption coupled with the new hybrid model from the company would allow it to maintain its top spot in the market. As the group realizes economies of scale, the profitability of the segment is set to grow. In comparison, the largest cloud providers excluding Google Cloud command high margins ranging between 29% and 38%. Despite its smaller scale with cloud revenues 5timesless than market leader AWS, Alibaba Cloud is growing at a higher rate than all major providers. As the company gains scale, we expect its profitability to rise in tandem and could attain the profitability levels seen with AWS (AMZN) or Azure (MSFT) within 2 to 3 years if it maintains its rapid growth to catch up with the scale of the top providers.\nLending Regulatory Developments in Ant Group\nThe halting of Ant Group IPO has been unfortunate for Alibaba which has a 33%stakein the subsidiary. Ant Group is an unconsolidated subsidiary of Alibaba. It is accounted for in Alibaba’s financial statements using the equity method. This means that the company recognizes its investment in Ant as an asset and records income as equity income. Earlier this year, the governor of the People’s Bank of China’sindicatedthat the company could resume its Ant Financial IPO if it settles the issues on user privacy and lending practices. Due to significant changes in the fintech regulatory environment in China, Ant Group is developing a rectification plan which will need to go through regulatory procedures but is subject to substantial uncertainties. According to its revenue breakdown, the company derives revenues from the payments, lending, asset & wealth management and insurance segments. The key segment at risk relates to its consumer lending activities which accounts for 35% of revenues.\n\nSource: Ant Group,HKEXNews\nOne of the potential restructuring exercises that may beimposedon Ant Group which has been in the works for several months includes turning the entity into a financial holding company. This means that the company will be subject to more stringent regulatory oversight and capital requirements in line with those ofbanks. Additionally, Ant Group said it would set up a personal credit reporting company that will comply with relevant laws and strengthen the protection of personal information and effectively prevent the abuse of data as part of the restructuring plan. This is unsurprising given the scale of its consumer lending segment which has overshadowed the major Chinese banks in terms of loan volumes as depicted in the chart below.\n\nSource: Financial Time\nAll in all, the Ant Group has grown to become a key player in the Chinese financial system and it would be reasonable for regulators to pay attention to the company’s affairs due to its significant influence over the economy. We view the heightened pressure on Ant Group’s lending activities to meet the strict banking regulations as essential to maintain a robust financial system and reduce systematic risk. Though, this may adversely impact its profitability and growth for the lending segment. However, we expect the company to at least maintain its place as a key player within the system owing to its rich consumer data and scale it has obtained over the years of rapid growth.\nMonopoly Crackdown Risk Lingers on But Not Solely Targeted At Alibaba\nRecently, Alibaba has been slapped with afineof $2.75 bln and continues to be closely monitored by Chinese regulators over its business practice of exclusivity on its commerce platform. The regulators are seeking to discourage the practice by major online commerce platforms to coerce merchants to become exclusive sellers on their platforms, this is a practice that has been allegedly done by Alibaba. However, the regulations appear to be aimed at creating a level playing field rather than singling out Alibaba in particular. The company’s vicechairmanhas also provided optimism despite the clampdown that the company has not breached any regulation and the fundamentals remain strong.\nRecent developments show that the Chinese government would not give any leeway to any company when it comes to misconduct. According to the State Administration for Market Regulation (SAMR), besides Alibaba, other Chinese internet giants such as Tencent Holding (OTCPK:TCEHY), Meituan (MEIT), as well as other e-commerce companies including Pinduoduo (PDD), JD.com (JD) were among the companies hauled in for a meeting with the antitrust watchdog, cyberspace administration and the tax authorities. The regulators made clear their stance against the anti-competitive behavior of forcing merchants to pick one platform, abusing their market position and misusing consumer data. The meeting stressed the requirements for these companies to heed their advice and conduct self-inspections of their business practices in the coming month and to publicly disclose their commitment to complying with the laws governing fair business practices. In our view, the rationale for the clampdown by regulators is aimed at promoting the industry growth by creating a level playing field thereby reducing the barriers of entrants of smaller startups and spurring consumer spending activity online by preventing price discrimination and predatory pricing.\nWe expect the impact of the Alibaba specifically to be negative in terms of potential market share leadership erosion as merchants would be able to sell on its competitors’ platforms, potentially redirecting some activity there. In broader terms, stricter regulations may encourage the emergence of startups while increasing competitive risk to the company. Based on our revenue projections, for every 1% decrease in market share, the company’s growth reduces by 2.1%. However, with amarket shareof at least 3 times larger than its closest competitor, JD.com, we foresee Alibaba maintaining its lead also cushioned by its massive user base and diverse segments integrated across its platforms which we expect leads to higher customer stickiness. In terms of the positive benefits of regulations that the company may see include higher consumer spending across the board as consumers. The overall rise in the economy may also benefit the company indirectly in the longer term.\nThus, we believe that Alibaba still stands to lose the most as it does command significant market power due to its large market share. That said, we do not view the company as a total monopoly. We also note that the Chinese e-commerce market is more competitive than perceived with competition from JD.com and Pinduoduo as well as smaller emerging online commerce platforms. Additionally, it has attained its market leadership through organic growth rather than through acquisitions due to the strong capabilities and diverse platforms across segments.\n\nSource: Alibaba, JD.com, Pinduoduo,China Internet Watch,\nUnprofitable Digital Media Segment Amid Rising Competition\nAlthough the company’s cloud segment is approaching profitability, its digital media segment continues to be losing money and competition in the video streaming market is intensifying. Previously, Youku was the market leader within the digital media segment in China. However, with increased competition from players such as Tencent, Youku’s market share has dropped. The video streaming platform is still among the top platforms used in China.\nThe company has focused on original content creation and developing a loyal membership plan which has helped boost the average daily subscriber base by30%. Synergies between Alibaba Pictures (OTC:ABPGF) and Youku are derived through complete in-house production of popular dramas. Alibaba Pictures has also recently seen success by producing the top three grossing films during Chinese New Year. These films accounted for 80% of box office sales during that period in China. Overall, the digital media space has experienced extreme competition in China with Alibaba having to constantly innovate in order to survive among its competitors. For a comparison, the largest streaming providers are Tencent Video and iQIYI(NASDAQ:IQ)with larger user bases than Youku. Additionally, short video streaming services such as Douyin, Kuaishou(OTCPK:KUASF)and Bilibili(NASDAQ:BILI)are also gaining popularity with superior growth rates than Youku.\nValuation\nThe company has a stellar average revenue growth rate of 43.5% in the past 5 years with gross and net margins of 55.5% and 35.3% respectively.\nAs seen in the company's cash flow chart above, the company’s free cash flow position has gradually improved over time as it expanded rapidly, with an average free cash flow margin of 12.31% in the past 10 years.\nThe company’s revenues are projected based on the forecasted growth in the total Chinese e-commerce sales as discussed in the previous analysis. According to the National Bureau of Statistics of China, online retail sales grew strongly at 10% in 2020 at RMB11,760 bln ($1.8 tln) despite the pandemic. Due to the regulatory pressures on the company’s business practices, we conservatively based its market share assumption to decline slightly. Still, the company is forecasted to grow its online sales volume by at least 30%.\nSource: Alibaba,National Bureau of Statistics of China,Fitch, China Internet Watch\nBased on an EV/EBITDA of 29.7x (E-commerce industry average) and a discount rate of 9% (company’s WACC), our model shows an upside of 43.7%.\nSource: Khaveen Investments\nVerdict\nAlibaba is supported by its strong fundamentals stemming from its market leadership and massive user base which continues to grow as well as tailwinds from a positive macroeconomic environment as Chinese consumption growth remains robust and China was the only major economy to deliver positive GDP growth in 2020. These factors underpin our thesis for the company in addition to its integration across key vertical business segments. Alibaba Cloud remains the top cloud provider in China and has achieved a significant milestone in becoming profitable since its inception. The rising profitability provides margin upside for the group. However, its other business segments are met with increasing challenges. The company’s fintech business continues to be plagued by regulatory threats where regulators are pushing for compliance with strict requirements especially due to the complexity of Ant’s business structure. Additionally, the digital media segment faces intense competition from rivals backed by Tencent and Baidu which guides our expectation that the segment may continue weighing on margins. Nonetheless, the fundamental strengths of its e-commerce platform which has faced a pushback remain highly attractive as a key proxy to Chinese consumption growth. Overall, we rate the company as aBuywith a target price of$329.72 (US ADR) or HKD319.8 (HK Stock).","news_type":1},"isVote":1,"tweetType":1,"viewCount":86,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":190722478,"gmtCreate":1620654203894,"gmtModify":1704346179183,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/NIO\">$NIO Inc.(NIO)$</a>Yeah","listText":"<a href=\"https://laohu8.com/S/NIO\">$NIO Inc.(NIO)$</a>Yeah","text":"$NIO Inc.(NIO)$Yeah","images":[{"img":"https://static.tigerbbs.com/9167450bd5487f60d73ec8eacd1d2a75","width":"1125","height":"1949"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/190722478","isVote":1,"tweetType":1,"viewCount":352,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":190959547,"gmtCreate":1620574010189,"gmtModify":1704345094217,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/09988\">$Alibaba(09988)$</a>hopefully it will improve with the earnings announcement&nbsp;","listText":"<a href=\"https://laohu8.com/S/09988\">$Alibaba(09988)$</a>hopefully it will improve with the earnings announcement&nbsp;","text":"$Alibaba(09988)$hopefully it will improve with the earnings announcement","images":[{"img":"https://static.tigerbbs.com/9902595dda32dad37135d7d5634be4d5","width":"1125","height":"2183"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/190959547","isVote":1,"tweetType":1,"viewCount":119,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":106761445,"gmtCreate":1620147469687,"gmtModify":1704339374392,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/AGC\">$Altimeter Growth Corp.(AGC)$</a>?","listText":"<a href=\"https://laohu8.com/S/AGC\">$Altimeter Growth Corp.(AGC)$</a>?","text":"$Altimeter Growth Corp.(AGC)$?","images":[{"img":"https://static.tigerbbs.com/dc69c3d59d0987808c6ebcd10526f343","width":"1125","height":"2183"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/106761445","isVote":1,"tweetType":1,"viewCount":152,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":108875761,"gmtCreate":1620015293353,"gmtModify":1704337401743,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"Go go go ALIBABA","listText":"Go go go ALIBABA","text":"Go go go ALIBABA","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/108875761","repostId":"1143944276","repostType":2,"isVote":1,"tweetType":1,"viewCount":320,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":800464977,"gmtCreate":1627313018699,"gmtModify":1703487487047,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/BABA\">$Alibaba(BABA)$</a>buy the dip!!!","listText":"<a href=\"https://laohu8.com/S/BABA\">$Alibaba(BABA)$</a>buy the dip!!!","text":"$Alibaba(BABA)$buy the dip!!!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/800464977","isVote":1,"tweetType":1,"viewCount":1445,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":802386197,"gmtCreate":1627718831919,"gmtModify":1703495186476,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"Over the past 7 quarterly reporting sessions,AliBABA stock fell. Would it break the streakon 3 Aug 2021? Hopefully will break 200+++","listText":"Over the past 7 quarterly reporting sessions,AliBABA stock fell. Would it break the streakon 3 Aug 2021? Hopefully will break 200+++","text":"Over the past 7 quarterly reporting sessions,AliBABA stock fell. Would it break the streakon 3 Aug 2021? Hopefully will break 200+++","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/802386197","repostId":"2155915751","repostType":2,"isVote":1,"tweetType":1,"viewCount":149,"authorTweetTopStatus":1,"verified":2,"comments":[{"author":{"id":"3577512169946317","authorId":"3577512169946317","name":"Guardian_J","avatar":"https://static.tigerbbs.com/d5732d3790ba7ded4910ae093423ed15","crmLevel":7,"crmLevelSwitch":1,"idStr":"3577512169946317","authorIdStr":"3577512169946317"},"content":"looking at $280.","text":"looking at $280.","html":"looking at $280."}],"imageCount":0,"langContent":"EN","totalScore":0},{"id":140851899,"gmtCreate":1625648315611,"gmtModify":1703745599804,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"$Alibaba(BABA)$ time to go to the moon!&nbsp;","listText":"$Alibaba(BABA)$ time to go to the moon!&nbsp;","text":"$Alibaba(BABA)$ time to go to the moon!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/140851899","repostId":"1195805799","repostType":2,"repost":{"id":"1195805799","kind":"news","pubTimestamp":1625644452,"share":"https://ttm.financial/m/news/1195805799?lang=&edition=fundamental","pubTime":"2021-07-07 15:54","market":"hk","language":"en","title":"Alibaba: A Rare Case Of Bullish Technicals And Fundamentals","url":"https://stock-news.laohu8.com/highlight/detail?id=1195805799","media":"seeking alpha","summary":"From the very moment of the IPO in 2017, Alibaba's share price continues to move along the upward support.The price drop that we have been observing since November last year fits into the concept of a correction. And this correction is most likely already completed.Fundamentally, the company is undervalued by at least 100%.Alibaba Groupnow represents that rare case when both technical and fundamental analysis simultaneously indicate a very likely increase in the company's capitalization in the n","content":"<p>Summary</p>\n<ul>\n <li>From the very moment of the IPO in 2017, Alibaba's share price continues to move along the upward support.</li>\n <li>The price drop that we have been observing since November last year fits into the concept of a correction.&nbsp;And this correction is most likely already completed.</li>\n <li>Fundamentally, the company is undervalued by at least 100%.</li>\n</ul>\n<p>Thesis</p>\n<p>Alibaba Group(NYSE:BABA)(OTCPK:BABAF)now represents that rare case when both technical and fundamental analysis simultaneously indicate a very likely increase in the company's capitalization in the near future.</p>\n<p>Part 1: Fundamental analysis</p>\n<p>Among the fundamental analysis tools, in this case, I find DCF modeling the most suitable because this method gives a rough idea of a company’s current rational value based on its development trends, the situation in the debt market and current volatility. In addition, this method allows you to look at the company as unbiased as possible.</p>\n<p>The quality of the DCF model is largely determined by the quality of the long-term company’s revenue forecast, incorporated in the model. To consider a conservative scenario, when predicting Alibaba's revenue for the next decade, I proceeded from the lower bound of analysts'expectations. In my opinion, the CAGR of 15% over the next 10 years is more than realistic for Alibaba, given the current growth rate of China's economy. Let me remind you that the company receives more than 90% of its revenue in the domestic market.</p>\n<p><img src=\"https://static.tigerbbs.com/53010c963ff2d110ab8caa4b8639d3fe\" tg-width=\"640\" tg-height=\"467\" referrerpolicy=\"no-referrer\"></p>\n<p><i>Source: Bloomberg</i></p>\n<p>In addition, the model assumes a gradual decrease in the operating margin to 11% in the terminal year. This condition is dictated by the desire to consider a pessimistic scenario. In addition, it is in line with the trend shown by the company.</p>\n<p><img src=\"https://static.tigerbbs.com/2f745edf64e78553f2d0975d39710a8e\" tg-width=\"635\" tg-height=\"371\" referrerpolicy=\"no-referrer\">Data byYCharts</p>\n<p>To calculate the Weighted Average Cost of Capital, I used thecurrent yield of China 10-Year Bondas a risk-free rate for the Chinese market (3.11%),equity risk premium(5.4%) and 3-yearrolling beta coefficient(0.6). For the terminal year, I used Beta equal to 1. To calculate the Cost of Debt, I used the interest expense for 2020 and 2021 FY divided by the debt value for the same years. Here is the calculation:</p>\n<p><img src=\"https://static.tigerbbs.com/3f88ac415a591de21c8392e67a5b4494\" tg-width=\"480\" tg-height=\"396\" referrerpolicy=\"no-referrer\"><i>Source: Author</i></p>\n<p>Among other parameters, the following should be highlighted:</p>\n<ol>\n <li>The relative size of CAPEX will remain at the five-year average.</li>\n <li>The tax rate will amount to 27%.</li>\n</ol>\n<p>And, here's the model itself:</p>\n<p><img src=\"https://static.tigerbbs.com/c86901f09a266e8e3ceb828ab09f4a0d\" tg-width=\"640\" tg-height=\"395\" referrerpolicy=\"no-referrer\"><i>Source: Author</i></p>\n<p><i>The DCF-based target price of Alibaba's shares is ~$500, offering 130% upside. Please note that the considered scenario for the development of Alibaba cannot be called optimistic.</i></p>\n<p>Part 2: Technical analysis</p>\n<p>This block should begin with the fact that from the very moment of the IPO in 2017, the company's share price continues to move along the upward support. The monthly chart demonstrates this very well:</p>\n<p><img src=\"https://static.tigerbbs.com/7b3c2a6bdf2aa4515f183e3906672ac9\" tg-width=\"1001\" tg-height=\"576\" referrerpolicy=\"no-referrer\"></p>\n<p><i>Source: TradingView.com, Author</i></p>\n<p>Separately, it is worth noting that the fall in the price of Alibaba shares, which we have been observing since the end of 2020, fully fits into this pattern.<i>In other words, in a technical context, nothing extraordinary has happened here over the past eight months.</i></p>\n<p>Now, let's move on to the weekly chart and take a closer look at the last two years.</p>\n<p>The last major full wave (growth and correction), which stands out in the dynamics of the company's share price, began in March 2020. And if we assume that in May 2021 the price of Alibaba's share reached its local minimum, then we get a pattern that is in very good agreement with theFibonacci retracement levels.In addition, the preservation of the macro uptrend is confirmed again because<i>the end of the wave is higher than its beginning.</i></p>\n<p><img src=\"https://static.tigerbbs.com/3600db32e0f86b2741bdbe516a7b19d2\" tg-width=\"1001\" tg-height=\"576\" referrerpolicy=\"no-referrer\"></p>\n<p><i>Source: TradingView.com, Author</i></p>\n<p>Now, let's move on to the daily chart and focus on the last eight months.</p>\n<p>The fall in the company's share price, which began in November last year, clearly consists of three waves, indicated in the following chart by the letters A, B, C. (<i>By the way, according to theElliott Wave Theory, the correction should consist of three waves.)</i></p>\n<p><img src=\"https://static.tigerbbs.com/b790996d6facd6effb4a2b8e455800ba\" tg-width=\"941\" tg-height=\"597\" referrerpolicy=\"no-referrer\"></p>\n<p><i>Source: TradingView.com, Author</i></p>\n<p>In addition, for the last eight months, the price had been falling without breaking through the resistance line, which is marked in red on the previous chart. And only on June 24, the share price rose above this line. A day later, the stock rallied above the 50-day moving average.<i>Agree, the technical picture is quite clear and positive.</i></p>\n<p>Moreover, I also want to draw your attention to the dynamics of theMACDindicator:</p>\n<p><img src=\"https://static.tigerbbs.com/346c067c36b033a29857ae91717fc897\" tg-width=\"941\" tg-height=\"597\" referrerpolicy=\"no-referrer\"></p>\n<p><i>Source: TradingView.com, Author</i></p>\n<p>Since the beginning of the year, this indicator has been showing a steady upward trend. And now it is already in the positive zone.</p>\n<p><i>In my opinion, all this indicates that the correction is most likely completed. Now a new, upward wave is emerging.</i></p>\n<p>And one more thing. Shares of Alibaba, much like the shares of most public companies, follow their long-term exponential trend, which tends to be well-identified on the graph with log y-axis. Here is this trend:</p>\n<p><img src=\"https://static.tigerbbs.com/7cc925fcc792b16d970c8a0da5cd8202\" tg-width=\"640\" tg-height=\"396\" referrerpolicy=\"no-referrer\"><i>Source: VisualizedAnalytics.com</i></p>\n<p>Now, the company's stock price is below this trend by one standard deviation. But overall, the trend doesn't seem broken.<i>And just a return of the price to the balanced state within the framework of this model would mean an increase of 35%.</i></p>\n<p>Bottom line</p>\n<p>In the context of investments, the key factors for success are patience and objectivity in the perception of the situation. In my opinion, this is even more important than deep theoretical knowledge.</p>\n<p>I do not and cannot have all the information regarding Alibaba Group. But I clearly see that in the context of technical analysis, the situation here is positive. Moreover, the price drop that we have been observing since November last year fits into the concept of a correction. And this correction is most likely already completed.</p>\n<p>Fundamental analysis is no less unambiguous. The undervaluation of the company is at least 100%.</p>\n<p>In talking about Alibaba, it is impossible to ignore the sovereign risks, which have especially increased in the last year. Much has already been written on this topic, in particular, I evenassessedthese risks through the calculation of the WACC (Weighted Average Cost of Capital). But any risk comes at a price. And in my opinion, it is the technical analysis that shows well that this risk is already taken into account in the price of the company.</p>\n<p>Therefore, there is no need to complicate things. You just need to be patient. The company's price is potentially prone to rise in price by at least 30% in the next six months.</p>\n<p>Just be patient!</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Alibaba: A Rare Case Of Bullish Technicals And Fundamentals</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAlibaba: A Rare Case Of Bullish Technicals And Fundamentals\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-07 15:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4437988-alibaba-rare-case-bullish-technicals-fundamentals><strong>seeking alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nFrom the very moment of the IPO in 2017, Alibaba's share price continues to move along the upward support.\nThe price drop that we have been observing since November last year fits into the ...</p>\n\n<a href=\"https://seekingalpha.com/article/4437988-alibaba-rare-case-bullish-technicals-fundamentals\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BABA":"阿里巴巴"},"source_url":"https://seekingalpha.com/article/4437988-alibaba-rare-case-bullish-technicals-fundamentals","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1195805799","content_text":"Summary\n\nFrom the very moment of the IPO in 2017, Alibaba's share price continues to move along the upward support.\nThe price drop that we have been observing since November last year fits into the concept of a correction. And this correction is most likely already completed.\nFundamentally, the company is undervalued by at least 100%.\n\nThesis\nAlibaba Group(NYSE:BABA)(OTCPK:BABAF)now represents that rare case when both technical and fundamental analysis simultaneously indicate a very likely increase in the company's capitalization in the near future.\nPart 1: Fundamental analysis\nAmong the fundamental analysis tools, in this case, I find DCF modeling the most suitable because this method gives a rough idea of a company’s current rational value based on its development trends, the situation in the debt market and current volatility. In addition, this method allows you to look at the company as unbiased as possible.\nThe quality of the DCF model is largely determined by the quality of the long-term company’s revenue forecast, incorporated in the model. To consider a conservative scenario, when predicting Alibaba's revenue for the next decade, I proceeded from the lower bound of analysts'expectations. In my opinion, the CAGR of 15% over the next 10 years is more than realistic for Alibaba, given the current growth rate of China's economy. Let me remind you that the company receives more than 90% of its revenue in the domestic market.\n\nSource: Bloomberg\nIn addition, the model assumes a gradual decrease in the operating margin to 11% in the terminal year. This condition is dictated by the desire to consider a pessimistic scenario. In addition, it is in line with the trend shown by the company.\nData byYCharts\nTo calculate the Weighted Average Cost of Capital, I used thecurrent yield of China 10-Year Bondas a risk-free rate for the Chinese market (3.11%),equity risk premium(5.4%) and 3-yearrolling beta coefficient(0.6). For the terminal year, I used Beta equal to 1. To calculate the Cost of Debt, I used the interest expense for 2020 and 2021 FY divided by the debt value for the same years. Here is the calculation:\nSource: Author\nAmong other parameters, the following should be highlighted:\n\nThe relative size of CAPEX will remain at the five-year average.\nThe tax rate will amount to 27%.\n\nAnd, here's the model itself:\nSource: Author\nThe DCF-based target price of Alibaba's shares is ~$500, offering 130% upside. Please note that the considered scenario for the development of Alibaba cannot be called optimistic.\nPart 2: Technical analysis\nThis block should begin with the fact that from the very moment of the IPO in 2017, the company's share price continues to move along the upward support. The monthly chart demonstrates this very well:\n\nSource: TradingView.com, Author\nSeparately, it is worth noting that the fall in the price of Alibaba shares, which we have been observing since the end of 2020, fully fits into this pattern.In other words, in a technical context, nothing extraordinary has happened here over the past eight months.\nNow, let's move on to the weekly chart and take a closer look at the last two years.\nThe last major full wave (growth and correction), which stands out in the dynamics of the company's share price, began in March 2020. And if we assume that in May 2021 the price of Alibaba's share reached its local minimum, then we get a pattern that is in very good agreement with theFibonacci retracement levels.In addition, the preservation of the macro uptrend is confirmed again becausethe end of the wave is higher than its beginning.\n\nSource: TradingView.com, Author\nNow, let's move on to the daily chart and focus on the last eight months.\nThe fall in the company's share price, which began in November last year, clearly consists of three waves, indicated in the following chart by the letters A, B, C. (By the way, according to theElliott Wave Theory, the correction should consist of three waves.)\n\nSource: TradingView.com, Author\nIn addition, for the last eight months, the price had been falling without breaking through the resistance line, which is marked in red on the previous chart. And only on June 24, the share price rose above this line. A day later, the stock rallied above the 50-day moving average.Agree, the technical picture is quite clear and positive.\nMoreover, I also want to draw your attention to the dynamics of theMACDindicator:\n\nSource: TradingView.com, Author\nSince the beginning of the year, this indicator has been showing a steady upward trend. And now it is already in the positive zone.\nIn my opinion, all this indicates that the correction is most likely completed. Now a new, upward wave is emerging.\nAnd one more thing. Shares of Alibaba, much like the shares of most public companies, follow their long-term exponential trend, which tends to be well-identified on the graph with log y-axis. Here is this trend:\nSource: VisualizedAnalytics.com\nNow, the company's stock price is below this trend by one standard deviation. But overall, the trend doesn't seem broken.And just a return of the price to the balanced state within the framework of this model would mean an increase of 35%.\nBottom line\nIn the context of investments, the key factors for success are patience and objectivity in the perception of the situation. In my opinion, this is even more important than deep theoretical knowledge.\nI do not and cannot have all the information regarding Alibaba Group. But I clearly see that in the context of technical analysis, the situation here is positive. Moreover, the price drop that we have been observing since November last year fits into the concept of a correction. And this correction is most likely already completed.\nFundamental analysis is no less unambiguous. The undervaluation of the company is at least 100%.\nIn talking about Alibaba, it is impossible to ignore the sovereign risks, which have especially increased in the last year. Much has already been written on this topic, in particular, I evenassessedthese risks through the calculation of the WACC (Weighted Average Cost of Capital). But any risk comes at a price. And in my opinion, it is the technical analysis that shows well that this risk is already taken into account in the price of the company.\nTherefore, there is no need to complicate things. You just need to be patient. The company's price is potentially prone to rise in price by at least 30% in the next six months.\nJust be patient!","news_type":1},"isVote":1,"tweetType":1,"viewCount":145,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":125484161,"gmtCreate":1624686452253,"gmtModify":1703843662395,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/ALB.HK\">$ALB 210729 205.00 CALL(ALB.HK)$</a>$Alibaba(09988)$&nbsp;On the hindsight should have whacked more call&nbsp;options… BABA&nbsp;to the moon","listText":"<a href=\"https://laohu8.com/S/ALB.HK\">$ALB 210729 205.00 CALL(ALB.HK)$</a>$Alibaba(09988)$&nbsp;On the hindsight should have whacked more call&nbsp;options… BABA&nbsp;to the moon","text":"$ALB 210729 205.00 CALL(ALB.HK)$$Alibaba(09988)$ On the hindsight should have whacked more call options… BABA to the moon","images":[{"img":"https://static.tigerbbs.com/4dafbeac7f4c0fc926f46a366a97a39c","width":"1125","height":"2183"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/125484161","isVote":1,"tweetType":1,"viewCount":100,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":198438837,"gmtCreate":1620978998229,"gmtModify":1704351449364,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/09988\">$Alibaba(09988)$</a>&nbsp;very painful today ?","listText":"<a href=\"https://laohu8.com/S/09988\">$Alibaba(09988)$</a>&nbsp;very painful today ?","text":"$Alibaba(09988)$ very painful today ?","images":[{"img":"https://static.tigerbbs.com/62c4752bcf900bbdc5d8e7b3de00f1b1","width":"1125","height":"2183"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/198438837","isVote":1,"tweetType":1,"viewCount":335,"authorTweetTopStatus":1,"verified":2,"comments":[{"author":{"id":"3560227015697068","authorId":"3560227015697068","name":"Jonnnn","avatar":"https://community-static.tradeup.com/news/1f0ea140fe5b70ffc0a2016e6bdb3048","crmLevel":4,"crmLevelSwitch":0,"idStr":"3560227015697068","authorIdStr":"3560227015697068"},"content":"We have the same cost price! I’m waiting for HKD$197 To average down. Order didn’t fill today.","text":"We have the same cost price! I’m waiting for HKD$197 To average down. Order didn’t fill today.","html":"We have the same cost price! I’m waiting for HKD$197 To average down. Order didn’t fill today."}],"imageCount":1,"langContent":"EN","totalScore":0},{"id":150931126,"gmtCreate":1624880836665,"gmtModify":1703846884444,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/ALB.HK\">$ALB 210729 205.00 CALL(ALB.HK)$</a>$Alibaba(09988)$ that’s the way … to the moon","listText":"<a href=\"https://laohu8.com/S/ALB.HK\">$ALB 210729 205.00 CALL(ALB.HK)$</a>$Alibaba(09988)$ that’s the way … to the moon","text":"$ALB 210729 205.00 CALL(ALB.HK)$$Alibaba(09988)$ that’s the way … to the moon","images":[{"img":"https://static.tigerbbs.com/4abf5108cd7a135d0dcbf2ea798437e1","width":"1125","height":"2183"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/150931126","isVote":1,"tweetType":1,"viewCount":135,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":123719172,"gmtCreate":1624438617396,"gmtModify":1703836696627,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/ALB.HK\">$ALB 210729 205.00 CALL(ALB.HK)$</a>$Alibaba(09988)$ keep going up","listText":"<a href=\"https://laohu8.com/S/ALB.HK\">$ALB 210729 205.00 CALL(ALB.HK)$</a>$Alibaba(09988)$ keep going up","text":"$ALB 210729 205.00 CALL(ALB.HK)$$Alibaba(09988)$ keep going up","images":[{"img":"https://static.tigerbbs.com/5e8d0db56ac84175e203e714334acfeb","width":"1125","height":"1949"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/123719172","isVote":1,"tweetType":1,"viewCount":349,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":134348780,"gmtCreate":1622209546540,"gmtModify":1704181533825,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/AGC\">$Altimeter Growth Corp.(AGC)$</a>Grab AGC to&nbsp;the moon. Let the short sellers pay for ourlunch","listText":"<a href=\"https://laohu8.com/S/AGC\">$Altimeter Growth Corp.(AGC)$</a>Grab AGC to&nbsp;the moon. Let the short sellers pay for ourlunch","text":"$Altimeter Growth Corp.(AGC)$Grab AGC to the moon. Let the short sellers pay for ourlunch","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/134348780","isVote":1,"tweetType":1,"viewCount":104,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":190722478,"gmtCreate":1620654203894,"gmtModify":1704346179183,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/NIO\">$NIO Inc.(NIO)$</a>Yeah","listText":"<a href=\"https://laohu8.com/S/NIO\">$NIO Inc.(NIO)$</a>Yeah","text":"$NIO Inc.(NIO)$Yeah","images":[{"img":"https://static.tigerbbs.com/9167450bd5487f60d73ec8eacd1d2a75","width":"1125","height":"1949"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/190722478","isVote":1,"tweetType":1,"viewCount":352,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":9008088756,"gmtCreate":1641341551501,"gmtModify":1676533600851,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/HST.SI\">$Lion-OCBC Sec HSTECH S$(HST.SI)$</a>No eye see","listText":"<a href=\"https://ttm.financial/S/HST.SI\">$Lion-OCBC Sec HSTECH S$(HST.SI)$</a>No eye see","text":"$Lion-OCBC Sec HSTECH S$(HST.SI)$No eye see","images":[{"img":"https://static.itradeup.com/news/357a30cc701bd31e9fdf144c4857c6eb","width":"1125","height":"2196"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9008088756","isVote":1,"tweetType":1,"viewCount":115,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":800448950,"gmtCreate":1627314617070,"gmtModify":1703487525607,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/TCEHY\">$Tencent Holding Ltd.(TCEHY)$</a> Very painful day","listText":"<a href=\"https://laohu8.com/S/TCEHY\">$Tencent Holding Ltd.(TCEHY)$</a> Very painful day","text":"$Tencent Holding Ltd.(TCEHY)$ Very painful day","images":[{"img":"https://static.tigerbbs.com/59a4349a74705059e1806c9ace4bfc7e","width":"1125","height":"1949"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/800448950","isVote":1,"tweetType":1,"viewCount":125,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":196268056,"gmtCreate":1621058610675,"gmtModify":1704352585642,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/AGC\">$Altimeter Growth Corp.(AGC)$</a>Waiting...","listText":"<a href=\"https://laohu8.com/S/AGC\">$Altimeter Growth Corp.(AGC)$</a>Waiting...","text":"$Altimeter Growth Corp.(AGC)$Waiting...","images":[{"img":"https://static.tigerbbs.com/bd0b1809243fb2c6c2bafeeaf773d24a","width":"1125","height":"1949"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/196268056","isVote":1,"tweetType":1,"viewCount":201,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":190959547,"gmtCreate":1620574010189,"gmtModify":1704345094217,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/09988\">$Alibaba(09988)$</a>hopefully it will improve with the earnings announcement&nbsp;","listText":"<a href=\"https://laohu8.com/S/09988\">$Alibaba(09988)$</a>hopefully it will improve with the earnings announcement&nbsp;","text":"$Alibaba(09988)$hopefully it will improve with the earnings announcement","images":[{"img":"https://static.tigerbbs.com/9902595dda32dad37135d7d5634be4d5","width":"1125","height":"2183"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/190959547","isVote":1,"tweetType":1,"viewCount":119,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":106761445,"gmtCreate":1620147469687,"gmtModify":1704339374392,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/AGC\">$Altimeter Growth Corp.(AGC)$</a>?","listText":"<a href=\"https://laohu8.com/S/AGC\">$Altimeter Growth Corp.(AGC)$</a>?","text":"$Altimeter Growth Corp.(AGC)$?","images":[{"img":"https://static.tigerbbs.com/dc69c3d59d0987808c6ebcd10526f343","width":"1125","height":"2183"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/106761445","isVote":1,"tweetType":1,"viewCount":152,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":108875761,"gmtCreate":1620015293353,"gmtModify":1704337401743,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"Go go go ALIBABA","listText":"Go go go ALIBABA","text":"Go go go ALIBABA","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/108875761","repostId":"1143944276","repostType":2,"repost":{"id":"1143944276","kind":"news","pubTimestamp":1619663437,"share":"https://ttm.financial/m/news/1143944276?lang=&edition=fundamental","pubTime":"2021-04-29 10:30","market":"hk","language":"en","title":"Alibaba: Our Top Consumer Discretionary Pick For The Rest Of 2021","url":"https://stock-news.laohu8.com/highlight/detail?id=1143944276","media":"seekingalpha","summary":"Summary\n\nThe Consumer Discretionary sector offers some of the highest growth opportunities but at gr","content":"<p><b>Summary</b></p>\n<ul>\n <li>The Consumer Discretionary sector offers some of the highest growth opportunities but at greatly expanded valuations.</li>\n <li>Alibaba enjoys all of the high-growth, high-profitability characteristics that would earn its stock a premium valuation, though the stock trades at a discount instead.</li>\n <li>The stock (has one of) the most attractive short-term upside(s) in the sector. Still, we have constructed an options strategy that increases our margin of safety and (potentially) our gains.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/11a1c362351a6868fd966648734b2371\" tg-width=\"1536\" tg-height=\"864\"><span>Photo by alexsl/iStock Unreleased via Getty Images</span></p>\n<p><b>On to Consumer Discretionary sector...</b></p>\n<p>As we continue our anniversary series by covering each sector and its current state in the market, my co-Pilot on Wheel of Fortune,<i>The Fortune Teller</i>, has already published his&nbsp;article&nbsp;focusing on the Consumer Discretionary sector. In this article, we are presenting our \"Top Pick\" amongst our holdings in the sector for the remainder of 2021.</p>\n<p>So far, we have presented the following sectors, along with our respective Top Picks:</p>\n<table>\n <tbody>\n  <tr>\n   <td>Sector / Macro (TFT articles)</td>\n   <td>Top Pick / Micro (Nick articles)</td>\n  </tr>\n  <tr>\n   <td>Energy</td>\n   <td>MPLX LP</td>\n  </tr>\n  <tr>\n   <td>Financials</td>\n   <td>China Life Insurance</td>\n  </tr>\n  <tr>\n   <td>Utilities</td>\n   <td>Vistra Corp.</td>\n  </tr>\n  <tr>\n   <td>Industrials</td>\n   <td><p>Teekay LNG Partners</p></td>\n  </tr>\n  <tr>\n   <td>Healthcare</td>\n   <td>Bristol-Myers Squibb</td>\n  </tr>\n  <tr>\n   <td>Communications</td>\n   <td><p>ViacomCBS</p></td>\n  </tr>\n  <tr>\n   <td>Consumer Discretionary</td>\n   <td><p>This article</p></td>\n  </tr>\n </tbody>\n</table>\n<p>In TFT's article, we go on to explain that while the Consumer Discretionary sector offers some of the highest growth opportunities, valuation-wise, it has expanded massively.</p>\n<p>If you were to ask one which sector is trading at the highest forward multiple, you are more than likely to get \"Technology\" as an answer. Yet, Technology looks like a real bargain compared to the Consumer Discretionary sector.</p>\n<p><img src=\"https://static.tigerbbs.com/7d7de88f8e5bbb746deca265a0f7e76b\" tg-width=\"640\" tg-height=\"408\"></p>\n<p>The sector's largest constituent, Amazon (AMZN), while trading at a forward P/E of around 72, its extended valuation can reasonably be justified by the company's growth potential (as has been the case for decades now).</p>\n<p>The company is expected to raise its top line by ~17%, and its bottom line by ~38%, on average, over the next two years.</p>\n<p><img src=\"https://static.tigerbbs.com/03fdffc5203d86aa33de98597800e088\" tg-width=\"635\" tg-height=\"487\"></p>\n<p>Combined with the fact Amazon might be the most complete/round Consumer Discretionary play out there (AWS), its stock would be a great contender for our \"Top Pick\" title.</p>\n<p>On the other hand, we decided that instead of sticking to the well-known but very expensive ingredients by selecting a stock amongst our U.S.-based holdings, we could simply \"import\" way cheaper ingredients from China.</p>\n<p>While Amazon.com Inc. (AMZN), Tesla (TSLA), and The Home Depot (HD) are trading 7.7%, on average, below their recent peak, Alibaba Group Holding Ltd. (BABA),JD.comInc. (JD), and Pinduoduo Inc. (PDD) (all three of which we are Long) are trading 28.4%, on average.</p>\n<p><img src=\"https://static.tigerbbs.com/fe514730abba09cdef820b137debbc3c\" tg-width=\"635\" tg-height=\"487\"></p>\n<p>We believe that many Chinese companies in the sector offer similar (and sometimes greater) growth prospects to their American counterparts but at much more attractive valuations. With the sector trading at an extreme forward multiple, it makes for a wise choice to pick a reasonably-priced high-quality growth company amongst our holdings. One can discover growth in China relatively easily, but unearthing high quality is more questionable. We found that amongst our holdings, the company meeting all our criteria is Alibaba (BABA). The stock offers all of the growth traits a company in the Consumer Discretionary sector displays while being highly profitable, of high quality, and most importantly, trading at a valuation that seems too hard to keep on ignoring.</p>\n<p><b>Why Alibaba</b></p>\n<p>As we just mentioned, Alibaba's valuation against its combined financial qualities has formed a fantastic upside opportunity. We have always believed in Alibaba as a long-term pick. However, the stock currently offers a marvelous short-term upside potential as well (Hence our top pick for the rest of 2021.)</p>\n<p>Analyst estimates for Alibaba's revenues over the next few years have been expanding at a rapid pace.</p>\n<p><img src=\"https://static.tigerbbs.com/98fe0db28f1b87aead0838b9f86426f7\" tg-width=\"640\" tg-height=\"331\"></p>\n<p>Meanwhile, the company's margins remain some of the most impressive in the market. Net income margins are north of 20% consistently, often pushing much higher, as Alibaba takes advantage of its massive economies of scale.</p>\n<p><img src=\"https://static.tigerbbs.com/9f98047e02bd9c009e8c535f41d599fd\" tg-width=\"640\" tg-height=\"331\"></p>\n<p>Amid high revenue growth estimates and sky-high margins, Alibaba is expected to keep on growing its EPS quite rapidly. Yet, at its current valuation, Alibaba's profitability growth is hardly being appreciated by the market, as the Forward P/E column illustrates in the table below.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7ee01c9b4208793d2550943aadedce4\" tg-width=\"640\" tg-height=\"194\"><span>Source: Seeking Alpha</span></p>\n<p>On the one hand, we know that Chinese stocks are by nature subject to humbler valuations against their American peers. Over the past few years, Alibaba's forward P/E has hardly ever crossed 35 despite that it would likely attract double this multiple were it based in the U.S. ceteris paribus. On the other hand, the stock is currently trading at an all-time high low valuation, which by no means can we see lasting based on Alibaba's financials and their expected growth rates.</p>\n<p><img src=\"https://static.tigerbbs.com/490c7e226abf65b105fe46f928d07a95\" tg-width=\"640\" tg-height=\"331\"></p>\n<p>We believe that the market will eventually act on Alibaba's undervaluation at some point, unlocking the stock's current upside. Even if the forward P/E were to shift to a very reasonable and still humble, in our view, forward P/E of 33, that translates to a phenomenal upside of 50%.</p>\n<p>Keep in mind that we are well-aware of risks related to holding Chinese equities such as Alibaba, with the company recently asked to pay&nbsp;$2.75B&nbsp;in fines by the Chinese regulators. However, what the market seems to be labeling as \"high risk\" when it comes to Alibaba is likely mostly a psychological phenomenon. The company continues to be a growth juggernaut, with no signs of slowing down.</p>\n<p>As far as the recent fine, the $2.75B equates to around 3.8% of Alibaba's cash position, or what the company makes every couple of weeks or so.</p>\n<p>To more accurately illustrate why Mr. Market has lost touch with reality when it comes to valuing Alibaba, let's value the stock by discounting its future expected cash flows in a prudent manner. Since Alibaba is a free cash flow generation machine, a DCF valuation method fits quite well in this example.</p>\n<p>As you can see, we have set a prudent revenue pathway, forecasting a declining growth in Alibaba's turnover expansion. This is despite Alibaba's revenue growth re-accelerating as of its past couple of quarters. We have also set the operating margin just over 17%, in line with the company's historical average.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e2cab028dffbd7e5547c29bd4f0d8eca\" tg-width=\"640\" tg-height=\"217\"><span>Source: Alpha Spread</span></p>\n<p>We have set CAPEX as % of revenues at 2.81%, also in line with the company's historical average, while using a discount rate of&nbsp;6.40%.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e08418205cec65acbe7c65eafa0d7be9\" tg-width=\"640\" tg-height=\"271\"><span>Source: Alpha Spread</span></p>\n<p>Plugging all the required variables together, and we come out with an intrinsic value per share of around $350, suggesting an upside of nearly 50% from the stock's current price levels, which matches our previous example of a potential valuation expansion to around 33 times the stock's forward EPS.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4312c47fc981a4df8dda7926d77f6a05\" tg-width=\"640\" tg-height=\"43\"><span>Source: Alpha Spread</span></p>\n<p>Conclusion and our play</p>\n<p>Amongst our growth holdings in the Consumer Discretionary sector, it becomes quite apparent to us that Alibaba offers the highest short-term (and probably long/er term) upside potential due to the stock's undeniably underpriced valuation.</p>\n<p>Still, we are well aware that the market will not suddenly swing moods resulting in our desired outcome. Hence we have constructed our position in a way that reflects future potential headwinds.</p>\n<p>Besides holding the stock, we have also covered our position by selling the following CALL options. Here are the possible scenarios for selling this option:</p>\n<p><b>SELL</b>&nbsp;<b>BABA</b>&nbsp;<b>01/21/2022 320.00 COVERED CALL @ $26.40</b></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/96ae9ebcac093b51fb2f891a75422efa\" tg-width=\"640\" tg-height=\"374\"><span>Source: Author</span></p>\n<p>Can BABA move to $346.40 (which is still under our DCF fair value price) over the next 8 months, turning this option sale into a loss on a net basis? Anything can happen.</p>\n<p>Still, the options should increase our margin of safety and help us profit further by remaining cautiously optimistic, considering that Mr. Market is a bit unlikely to suddenly see a swinging sentiment.</p>\n<p>Simultaneously, we have sold the following PUTs, as we would love to get some additional BABA at a further discount if the stock price remains depressed.</p>\n<ul>\n <li>SELL (to open) BABA 01/21/2022 200.00 PUT @ $29.25</li>\n <li>SELL (to open) BABA 01/21/2022 220.00 PUT @ $39.90</li>\n <li>SELL (to open) BABA 01/21/2022 230.00 PUT @ $45.00</li>\n <li>SELL (to open) BABA 01/21/2022 240.00 PUT @ $51.00</li>\n <li>SELL (to open) BABA 01/21/2022 250.00 PUT @ $57.30</li>\n</ul>\n<p>If BABA expires between $220-$280, we're at the sweet spot in terms of maximizing the returns on the options.</p>\n<p>My co-pilot for running Wheel of Fortune,<i>The Fortune Teller</i>, will follow up on this article with his next sector coverage.</p>\n<p>So stay tuned to him, stay tuned to this series (we hope to cover as many sectors and top picks as possible), and stay tuned to the below special offer.</p>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; 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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAlibaba: Our Top Consumer Discretionary Pick For The Rest Of 2021\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-29 10:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4422086-alibaba-stock-baba-top-consumer-discretionary-pick-for-rest-of-2021><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nThe Consumer Discretionary sector offers some of the highest growth opportunities but at greatly expanded valuations.\nAlibaba enjoys all of the high-growth, high-profitability characteristics...</p>\n\n<a href=\"https://seekingalpha.com/article/4422086-alibaba-stock-baba-top-consumer-discretionary-pick-for-rest-of-2021\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BABA":"阿里巴巴","09988":"阿里巴巴-W"},"source_url":"https://seekingalpha.com/article/4422086-alibaba-stock-baba-top-consumer-discretionary-pick-for-rest-of-2021","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1143944276","content_text":"Summary\n\nThe Consumer Discretionary sector offers some of the highest growth opportunities but at greatly expanded valuations.\nAlibaba enjoys all of the high-growth, high-profitability characteristics that would earn its stock a premium valuation, though the stock trades at a discount instead.\nThe stock (has one of) the most attractive short-term upside(s) in the sector. Still, we have constructed an options strategy that increases our margin of safety and (potentially) our gains.\n\nPhoto by alexsl/iStock Unreleased via Getty Images\nOn to Consumer Discretionary sector...\nAs we continue our anniversary series by covering each sector and its current state in the market, my co-Pilot on Wheel of Fortune,The Fortune Teller, has already published his article focusing on the Consumer Discretionary sector. In this article, we are presenting our \"Top Pick\" amongst our holdings in the sector for the remainder of 2021.\nSo far, we have presented the following sectors, along with our respective Top Picks:\n\n\n\nSector / Macro (TFT articles)\nTop Pick / Micro (Nick articles)\n\n\nEnergy\nMPLX LP\n\n\nFinancials\nChina Life Insurance\n\n\nUtilities\nVistra Corp.\n\n\nIndustrials\nTeekay LNG Partners\n\n\nHealthcare\nBristol-Myers Squibb\n\n\nCommunications\nViacomCBS\n\n\nConsumer Discretionary\nThis article\n\n\n\nIn TFT's article, we go on to explain that while the Consumer Discretionary sector offers some of the highest growth opportunities, valuation-wise, it has expanded massively.\nIf you were to ask one which sector is trading at the highest forward multiple, you are more than likely to get \"Technology\" as an answer. Yet, Technology looks like a real bargain compared to the Consumer Discretionary sector.\n\nThe sector's largest constituent, Amazon (AMZN), while trading at a forward P/E of around 72, its extended valuation can reasonably be justified by the company's growth potential (as has been the case for decades now).\nThe company is expected to raise its top line by ~17%, and its bottom line by ~38%, on average, over the next two years.\n\nCombined with the fact Amazon might be the most complete/round Consumer Discretionary play out there (AWS), its stock would be a great contender for our \"Top Pick\" title.\nOn the other hand, we decided that instead of sticking to the well-known but very expensive ingredients by selecting a stock amongst our U.S.-based holdings, we could simply \"import\" way cheaper ingredients from China.\nWhile Amazon.com Inc. (AMZN), Tesla (TSLA), and The Home Depot (HD) are trading 7.7%, on average, below their recent peak, Alibaba Group Holding Ltd. (BABA),JD.comInc. (JD), and Pinduoduo Inc. (PDD) (all three of which we are Long) are trading 28.4%, on average.\n\nWe believe that many Chinese companies in the sector offer similar (and sometimes greater) growth prospects to their American counterparts but at much more attractive valuations. With the sector trading at an extreme forward multiple, it makes for a wise choice to pick a reasonably-priced high-quality growth company amongst our holdings. One can discover growth in China relatively easily, but unearthing high quality is more questionable. We found that amongst our holdings, the company meeting all our criteria is Alibaba (BABA). The stock offers all of the growth traits a company in the Consumer Discretionary sector displays while being highly profitable, of high quality, and most importantly, trading at a valuation that seems too hard to keep on ignoring.\nWhy Alibaba\nAs we just mentioned, Alibaba's valuation against its combined financial qualities has formed a fantastic upside opportunity. We have always believed in Alibaba as a long-term pick. However, the stock currently offers a marvelous short-term upside potential as well (Hence our top pick for the rest of 2021.)\nAnalyst estimates for Alibaba's revenues over the next few years have been expanding at a rapid pace.\n\nMeanwhile, the company's margins remain some of the most impressive in the market. Net income margins are north of 20% consistently, often pushing much higher, as Alibaba takes advantage of its massive economies of scale.\n\nAmid high revenue growth estimates and sky-high margins, Alibaba is expected to keep on growing its EPS quite rapidly. Yet, at its current valuation, Alibaba's profitability growth is hardly being appreciated by the market, as the Forward P/E column illustrates in the table below.\nSource: Seeking Alpha\nOn the one hand, we know that Chinese stocks are by nature subject to humbler valuations against their American peers. Over the past few years, Alibaba's forward P/E has hardly ever crossed 35 despite that it would likely attract double this multiple were it based in the U.S. ceteris paribus. On the other hand, the stock is currently trading at an all-time high low valuation, which by no means can we see lasting based on Alibaba's financials and their expected growth rates.\n\nWe believe that the market will eventually act on Alibaba's undervaluation at some point, unlocking the stock's current upside. Even if the forward P/E were to shift to a very reasonable and still humble, in our view, forward P/E of 33, that translates to a phenomenal upside of 50%.\nKeep in mind that we are well-aware of risks related to holding Chinese equities such as Alibaba, with the company recently asked to pay $2.75B in fines by the Chinese regulators. However, what the market seems to be labeling as \"high risk\" when it comes to Alibaba is likely mostly a psychological phenomenon. The company continues to be a growth juggernaut, with no signs of slowing down.\nAs far as the recent fine, the $2.75B equates to around 3.8% of Alibaba's cash position, or what the company makes every couple of weeks or so.\nTo more accurately illustrate why Mr. Market has lost touch with reality when it comes to valuing Alibaba, let's value the stock by discounting its future expected cash flows in a prudent manner. Since Alibaba is a free cash flow generation machine, a DCF valuation method fits quite well in this example.\nAs you can see, we have set a prudent revenue pathway, forecasting a declining growth in Alibaba's turnover expansion. This is despite Alibaba's revenue growth re-accelerating as of its past couple of quarters. We have also set the operating margin just over 17%, in line with the company's historical average.\nSource: Alpha Spread\nWe have set CAPEX as % of revenues at 2.81%, also in line with the company's historical average, while using a discount rate of 6.40%.\nSource: Alpha Spread\nPlugging all the required variables together, and we come out with an intrinsic value per share of around $350, suggesting an upside of nearly 50% from the stock's current price levels, which matches our previous example of a potential valuation expansion to around 33 times the stock's forward EPS.\nSource: Alpha Spread\nConclusion and our play\nAmongst our growth holdings in the Consumer Discretionary sector, it becomes quite apparent to us that Alibaba offers the highest short-term (and probably long/er term) upside potential due to the stock's undeniably underpriced valuation.\nStill, we are well aware that the market will not suddenly swing moods resulting in our desired outcome. Hence we have constructed our position in a way that reflects future potential headwinds.\nBesides holding the stock, we have also covered our position by selling the following CALL options. Here are the possible scenarios for selling this option:\nSELL BABA 01/21/2022 320.00 COVERED CALL @ $26.40\nSource: Author\nCan BABA move to $346.40 (which is still under our DCF fair value price) over the next 8 months, turning this option sale into a loss on a net basis? Anything can happen.\nStill, the options should increase our margin of safety and help us profit further by remaining cautiously optimistic, considering that Mr. Market is a bit unlikely to suddenly see a swinging sentiment.\nSimultaneously, we have sold the following PUTs, as we would love to get some additional BABA at a further discount if the stock price remains depressed.\n\nSELL (to open) BABA 01/21/2022 200.00 PUT @ $29.25\nSELL (to open) BABA 01/21/2022 220.00 PUT @ $39.90\nSELL (to open) BABA 01/21/2022 230.00 PUT @ $45.00\nSELL (to open) BABA 01/21/2022 240.00 PUT @ $51.00\nSELL (to open) BABA 01/21/2022 250.00 PUT @ $57.30\n\nIf BABA expires between $220-$280, we're at the sweet spot in terms of maximizing the returns on the options.\nMy co-pilot for running Wheel of Fortune,The Fortune Teller, will follow up on this article with his next sector coverage.\nSo stay tuned to him, stay tuned to this series (we hope to cover as many sectors and top picks as possible), and stay tuned to the below special offer.","news_type":1},"isVote":1,"tweetType":1,"viewCount":320,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":331076003557520,"gmtCreate":1721836930171,"gmtModify":1721836935618,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/AMD\">$Advanced Micro Devices(AMD)$&nbsp;</a> <a href=\"https://ttm.financial/OPT/AMD 20240830 150.0 PUT\">$AMD 20240830 150.0 PUT$</a> enough for dinner 😂","listText":"<a href=\"https://ttm.financial/S/AMD\">$Advanced Micro Devices(AMD)$&nbsp;</a> <a href=\"https://ttm.financial/OPT/AMD 20240830 150.0 PUT\">$AMD 20240830 150.0 PUT$</a> enough for dinner 😂","text":"$Advanced Micro Devices(AMD)$ $AMD 20240830 150.0 PUT$ enough for dinner 😂","images":[{"img":"https://community-static.tradeup.com/news/f04b0262b549e7058c3f873d6ec8253c","width":"327","height":"545"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/331076003557520","isVote":1,"tweetType":1,"viewCount":28,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":172659662,"gmtCreate":1626960390156,"gmtModify":1703481371805,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"Looking good","listText":"Looking good","text":"Looking good","images":[{"img":"https://static.tigerbbs.com/8a0ad738592c5d81e3fed930f4ec5882","width":"1125","height":"2536"}],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/172659662","isVote":1,"tweetType":1,"viewCount":142,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":1,"langContent":"EN","totalScore":0},{"id":162078848,"gmtCreate":1624029503884,"gmtModify":1703827149319,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"<a href=\"https://laohu8.com/S/NVDA\">$NVIDIA Corp(NVDA)$</a>to&nbsp;the moon","listText":"<a href=\"https://laohu8.com/S/NVDA\">$NVIDIA Corp(NVDA)$</a>to&nbsp;the moon","text":"$NVIDIA Corp(NVDA)$to the moon","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/162078848","isVote":1,"tweetType":1,"viewCount":278,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":198223626,"gmtCreate":1620963074765,"gmtModify":1704351224068,"author":{"id":"3582462662307042","authorId":"3582462662307042","name":"eddieadc","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582462662307042","authorIdStr":"3582462662307042"},"themes":[],"htmlText":"Excellent article","listText":"Excellent article","text":"Excellent article","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/198223626","repostId":"1135477773","repostType":2,"repost":{"id":"1135477773","kind":"news","pubTimestamp":1620725752,"share":"https://ttm.financial/m/news/1135477773?lang=&edition=fundamental","pubTime":"2021-05-11 17:35","market":"hk","language":"en","title":"Alibaba: Resiliency Amid Increased Regulatory Clampdown","url":"https://stock-news.laohu8.com/highlight/detail?id=1135477773","media":"seekingalpha","summary":"Alibaba’s strong fundamentals of its core commerce platforms are buoyed by its massive user base and are underpinned by Chinese consumption growth.Its cloud segment is poised to reach profitability achieving economies of scale, which provides upside to its margins.Other segments such as Ant Group continue to face regulatory threats to its consumer lending unit, which could be subject to stricter regulations.It is also carefully navigating anti-monopolistic regulations on the business practices o","content":"<p><b>Summary</b></p>\n<ul>\n <li>Alibaba’s strong fundamentals of its core commerce platforms are buoyed by its massive user base and are underpinned by Chinese consumption growth.</li>\n <li>Its cloud segment is poised to reach profitability achieving economies of scale, which provides upside to its margins.</li>\n <li>Other segments such as Ant Group continue to face regulatory threats to its consumer lending unit, which could be subject to stricter regulations.</li>\n <li>It is also carefully navigating anti-monopolistic regulations on the business practices of its core commerce platform as part of a wider industry clampdown.</li>\n</ul>\n<p>The uncertainties surrounding Chinese e-commerce giant Alibaba (BABA) persist, but we still believe that the company’s fundamentals remain robust despite the regulatory crackdown. Alibaba has maintained strong growth in attracting customers to all its platforms. In 2020, the company witnessed a spectacular year despite the pandemic with its massive active user basegrowingby 9.5% YoY at 779 mln users by the end of Q4 2020. Going forward, China’s personal consumption is also forecasted to reach$12.7tln by 2030 at a CAGR of 11.5% reaching the same level as the US. In the long run, the government is also aiming to implementpoliciestargeted towards boosting domestic consumption such as its Made in China 2025 initiative. We are optimistic that the company’s strong fundamentals will allow it to ride therecoveryin consumer confidence and spending.</p>\n<p><b>Number of annual active consumers across Alibaba's online shopping properties ('mln')</b></p>\n<p><img src=\"https://static.tigerbbs.com/03691ef4b09780897472bf710de74bb9\" tg-width=\"526\" tg-height=\"445\" referrerpolicy=\"no-referrer\"></p>\n<p><i>Source:Statista</i></p>\n<p>As discussed in our previous analysis on Alibaba, we expect the company to be able to sustain its growth due to several factors such as:</p>\n<ul>\n <li>Continued robust middle-class growth due to government policies on tax and investments</li>\n <li>Urban migration with the development of supercity clusters where Alibaba has an 85% penetration rate. The urbanisation rate is forecasted to be at75%by 2030 which is 15% higher than the current rate</li>\n <li>Integration of verticals (logistics, cloud, fintech) to support its core commerce platforms</li>\n</ul>\n<p>In terms of its business segment verticals, Alibaba Cloud is the most promising with expanding margins as it grows in scale. This is significant as e-commerce and fintech are the only profitable segments. However, its fintech segment continues to be pressured by the evolving regulatory environment which has cast a shadow over the company’s value. Additionally, we foresee its digital media segment remaining under pressure from intense competition within the Chinese video streaming market which guides our expectation that it may remain unprofitable for the foreseeable future.</p>\n<p><b>Nearing Cloud Profitability May Lead to Margin Upside</b></p>\n<p>Alibaba Cloud is one of the most significant vertical business segments exhibiting strong integration potential with its core commerce platform. It is also the company’s largest non-core commerce business segment besides fintech, accounting for 6% of revenues. Alibaba Cloud became profitable for thefirst timein the previous quarter’searnings report. It achieved a significant milestone with positive adjusted EBITDA during the quarter since its inception in 2009.</p>\n<p><img src=\"https://static.tigerbbs.com/ed6551cd07762322fd52c6b88c3ea35a\" tg-width=\"621\" tg-height=\"470\" referrerpolicy=\"no-referrer\">With the realization of economies of scale, we expect the segment’s profitability to continue rising going forward. Alibaba Cloud is currently the market leader in China with a40%market share. Recently, the company also launched its Hybrid Cloud Partner Program and on-premises appliances which are set to enhance the offering in 2021 and beyond. The keyfocusof this new program is to extend its customer-centric strategy by providing customers a tailored experience of customising the cloud platform. Global companies such asHewlett Packard Enterprise(NYSE:HPE)have already started working with Alibaba Cloud and adopted the hybrid cloud platform to better their relationships with clients. Since Alibaba Cloud is the largest cloud service in China which is an important market, many companies will have to adopt Alibaba cloud into their infrastructure within the APAC region in order to seamlessly collaborate with Chinese clients.</p>\n<p>Overall, this isexpectedto increase demand through 2020 and beyond highlighting the importance of cloud within an organisation. We expect increased cloud adoption coupled with the new hybrid model from the company would allow it to maintain its top spot in the market. As the group realizes economies of scale, the profitability of the segment is set to grow. In comparison, the largest cloud providers excluding Google Cloud command high margins ranging between 29% and 38%. Despite its smaller scale with cloud revenues 5timesless than market leader AWS, Alibaba Cloud is growing at a higher rate than all major providers. As the company gains scale, we expect its profitability to rise in tandem and could attain the profitability levels seen with AWS (AMZN) or Azure (MSFT) within 2 to 3 years if it maintains its rapid growth to catch up with the scale of the top providers.</p>\n<p><img src=\"https://static.tigerbbs.com/5d902ad421fea55928f5b6c2e3e40114\" tg-width=\"623\" tg-height=\"395\" referrerpolicy=\"no-referrer\"><b>Lending Regulatory Developments in Ant Group</b></p>\n<p>The halting of Ant Group IPO has been unfortunate for Alibaba which has a 33%stakein the subsidiary. Ant Group is an unconsolidated subsidiary of Alibaba. It is accounted for in Alibaba’s financial statements using the equity method. This means that the company recognizes its investment in Ant as an asset and records income as equity income. Earlier this year, the governor of the People’s Bank of China’sindicatedthat the company could resume its Ant Financial IPO if it settles the issues on user privacy and lending practices. Due to significant changes in the fintech regulatory environment in China, Ant Group is developing a rectification plan which will need to go through regulatory procedures but is subject to substantial uncertainties. According to its revenue breakdown, the company derives revenues from the payments, lending, asset &amp; wealth management and insurance segments. The key segment at risk relates to its consumer lending activities which accounts for 35% of revenues.</p>\n<p><img src=\"https://static.tigerbbs.com/849d918a361ccd5662e9404f0118d125\" tg-width=\"640\" tg-height=\"360\"></p>\n<p><i>Source: Ant Group,HKEXNews</i></p>\n<p>One of the potential restructuring exercises that may beimposedon Ant Group which has been in the works for several months includes turning the entity into a financial holding company. This means that the company will be subject to more stringent regulatory oversight and capital requirements in line with those ofbanks. Additionally, Ant Group said it would set up a personal credit reporting company that will comply with relevant laws and strengthen the protection of personal information and effectively prevent the abuse of data as part of the restructuring plan. This is unsurprising given the scale of its consumer lending segment which has overshadowed the major Chinese banks in terms of loan volumes as depicted in the chart below.</p>\n<p><img src=\"https://static.tigerbbs.com/31e31fdb0b52728ad39df017e0fce40c\" tg-width=\"640\" tg-height=\"478\"></p>\n<p><i>Source: Financial Time</i></p>\n<p>All in all, the Ant Group has grown to become a key player in the Chinese financial system and it would be reasonable for regulators to pay attention to the company’s affairs due to its significant influence over the economy. We view the heightened pressure on Ant Group’s lending activities to meet the strict banking regulations as essential to maintain a robust financial system and reduce systematic risk. Though, this may adversely impact its profitability and growth for the lending segment. However, we expect the company to at least maintain its place as a key player within the system owing to its rich consumer data and scale it has obtained over the years of rapid growth.</p>\n<p><b>Monopoly Crackdown Risk Lingers on But Not Solely Targeted At Alibaba</b></p>\n<p>Recently, Alibaba has been slapped with afineof $2.75 bln and continues to be closely monitored by Chinese regulators over its business practice of exclusivity on its commerce platform. The regulators are seeking to discourage the practice by major online commerce platforms to coerce merchants to become exclusive sellers on their platforms, this is a practice that has been allegedly done by Alibaba. However, the regulations appear to be aimed at creating a level playing field rather than singling out Alibaba in particular. The company’s vicechairmanhas also provided optimism despite the clampdown that the company has not breached any regulation and the fundamentals remain strong.</p>\n<p>Recent developments show that the Chinese government would not give any leeway to any company when it comes to misconduct. According to the State Administration for Market Regulation (SAMR), besides Alibaba, other Chinese internet giants such as Tencent Holding (OTCPK:TCEHY), Meituan (MEIT), as well as other e-commerce companies including Pinduoduo (PDD), JD.com (JD) were among the companies hauled in for a meeting with the antitrust watchdog, cyberspace administration and the tax authorities. The regulators made clear their stance against the anti-competitive behavior of forcing merchants to pick one platform, abusing their market position and misusing consumer data. The meeting stressed the requirements for these companies to heed their advice and conduct self-inspections of their business practices in the coming month and to publicly disclose their commitment to complying with the laws governing fair business practices. In our view, the rationale for the clampdown by regulators is aimed at promoting the industry growth by creating a level playing field thereby reducing the barriers of entrants of smaller startups and spurring consumer spending activity online by preventing price discrimination and predatory pricing.</p>\n<p>We expect the impact of the Alibaba specifically to be negative in terms of potential market share leadership erosion as merchants would be able to sell on its competitors’ platforms, potentially redirecting some activity there. In broader terms, stricter regulations may encourage the emergence of startups while increasing competitive risk to the company. Based on our revenue projections, for every 1% decrease in market share, the company’s growth reduces by 2.1%. However, with amarket shareof at least 3 times larger than its closest competitor, JD.com, we foresee Alibaba maintaining its lead also cushioned by its massive user base and diverse segments integrated across its platforms which we expect leads to higher customer stickiness. In terms of the positive benefits of regulations that the company may see include higher consumer spending across the board as consumers. The overall rise in the economy may also benefit the company indirectly in the longer term.</p>\n<p>Thus, we believe that Alibaba still stands to lose the most as it does command significant market power due to its large market share. That said, we do not view the company as a total monopoly. We also note that the Chinese e-commerce market is more competitive than perceived with competition from JD.com and Pinduoduo as well as smaller emerging online commerce platforms. Additionally, it has attained its market leadership through organic growth rather than through acquisitions due to the strong capabilities and diverse platforms across segments.</p>\n<p><img src=\"https://static.tigerbbs.com/018b2b65678fc68ca507359ad8ee58d8\" tg-width=\"640\" tg-height=\"360\"></p>\n<p><i>Source: Alibaba, JD.com, Pinduoduo,China Internet Watch,</i></p>\n<p><b>Unprofitable Digital Media Segment Amid Rising Competition</b></p>\n<p>Although the company’s cloud segment is approaching profitability, its digital media segment continues to be losing money and competition in the video streaming market is intensifying. Previously, Youku was the market leader within the digital media segment in China. However, with increased competition from players such as Tencent, Youku’s market share has dropped. The video streaming platform is still among the top platforms used in China.</p>\n<p>The company has focused on original content creation and developing a loyal membership plan which has helped boost the average daily subscriber base by30%. Synergies between Alibaba Pictures (OTC:ABPGF) and Youku are derived through complete in-house production of popular dramas. Alibaba Pictures has also recently seen success by producing the top three grossing films during Chinese New Year. These films accounted for 80% of box office sales during that period in China. Overall, the digital media space has experienced extreme competition in China with Alibaba having to constantly innovate in order to survive among its competitors. For a comparison, the largest streaming providers are Tencent Video and iQIYI(NASDAQ:IQ)with larger user bases than Youku. Additionally, short video streaming services such as Douyin, Kuaishou(OTCPK:KUASF)and Bilibili(NASDAQ:BILI)are also gaining popularity with superior growth rates than Youku.</p>\n<p><img src=\"https://static.tigerbbs.com/ff63e7b514fbd9baa5ed087e665b9820\" tg-width=\"619\" tg-height=\"474\"><b>Valuation</b></p>\n<p><img src=\"https://static.tigerbbs.com/e545d9e1c68a2e605fdc5f6920caa193\" tg-width=\"640\" tg-height=\"360\">The company has a stellar average revenue growth rate of 43.5% in the past 5 years with gross and net margins of 55.5% and 35.3% respectively.</p>\n<p><img src=\"https://static.tigerbbs.com/7f1f17d83a068b0d965af7a99e09d224\" tg-width=\"640\" tg-height=\"360\">As seen in the company's cash flow chart above, the company’s free cash flow position has gradually improved over time as it expanded rapidly, with an average free cash flow margin of 12.31% in the past 10 years.</p>\n<p><img src=\"https://static.tigerbbs.com/df5450f16b71ebfad7591e26ac8f960f\" tg-width=\"617\" tg-height=\"471\">The company’s revenues are projected based on the forecasted growth in the total Chinese e-commerce sales as discussed in the previous analysis. According to the National Bureau of Statistics of China, online retail sales grew strongly at 10% in 2020 at RMB11,760 bln ($1.8 tln) despite the pandemic. Due to the regulatory pressures on the company’s business practices, we conservatively based its market share assumption to decline slightly. Still, the company is forecasted to grow its online sales volume by at least 30%.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/76a8c7f3af97dbfb5354b0fc2007689d\" tg-width=\"622\" tg-height=\"309\"><span>Source: Alibaba,National Bureau of Statistics of China,Fitch, China Internet Watch</span></p>\n<p>Based on an EV/EBITDA of 29.7x (E-commerce industry average) and a discount rate of 9% (company’s WACC), our model shows an upside of 43.7%.</p>\n<p><img src=\"https://static.tigerbbs.com/c75037216a6facb6ce8f17f45de0413d\" tg-width=\"640\" tg-height=\"360\"><i>Source: Khaveen Investments</i></p>\n<p><b>Verdict</b></p>\n<p>Alibaba is supported by its strong fundamentals stemming from its market leadership and massive user base which continues to grow as well as tailwinds from a positive macroeconomic environment as Chinese consumption growth remains robust and China was the only major economy to deliver positive GDP growth in 2020. These factors underpin our thesis for the company in addition to its integration across key vertical business segments. Alibaba Cloud remains the top cloud provider in China and has achieved a significant milestone in becoming profitable since its inception. The rising profitability provides margin upside for the group. However, its other business segments are met with increasing challenges. The company’s fintech business continues to be plagued by regulatory threats where regulators are pushing for compliance with strict requirements especially due to the complexity of Ant’s business structure. Additionally, the digital media segment faces intense competition from rivals backed by Tencent and Baidu which guides our expectation that the segment may continue weighing on margins. Nonetheless, the fundamental strengths of its e-commerce platform which has faced a pushback remain highly attractive as a key proxy to Chinese consumption growth. Overall, we rate the company as a<i>Buy</i>with a target price of<i>$329.72 (US ADR) or HKD319.8 (HK Stock).</i></p>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Alibaba: Resiliency Amid Increased Regulatory Clampdown</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAlibaba: Resiliency Amid Increased Regulatory Clampdown\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-05-11 17:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4426681-alibaba-resiliency-amid-increased-regulatory-clampdown><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nAlibaba’s strong fundamentals of its core commerce platforms are buoyed by its massive user base and are underpinned by Chinese consumption growth.\nIts cloud segment is poised to reach ...</p>\n\n<a href=\"https://seekingalpha.com/article/4426681-alibaba-resiliency-amid-increased-regulatory-clampdown\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"09988":"阿里巴巴-W","BABA":"阿里巴巴"},"source_url":"https://seekingalpha.com/article/4426681-alibaba-resiliency-amid-increased-regulatory-clampdown","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1135477773","content_text":"Summary\n\nAlibaba’s strong fundamentals of its core commerce platforms are buoyed by its massive user base and are underpinned by Chinese consumption growth.\nIts cloud segment is poised to reach profitability achieving economies of scale, which provides upside to its margins.\nOther segments such as Ant Group continue to face regulatory threats to its consumer lending unit, which could be subject to stricter regulations.\nIt is also carefully navigating anti-monopolistic regulations on the business practices of its core commerce platform as part of a wider industry clampdown.\n\nThe uncertainties surrounding Chinese e-commerce giant Alibaba (BABA) persist, but we still believe that the company’s fundamentals remain robust despite the regulatory crackdown. Alibaba has maintained strong growth in attracting customers to all its platforms. In 2020, the company witnessed a spectacular year despite the pandemic with its massive active user basegrowingby 9.5% YoY at 779 mln users by the end of Q4 2020. Going forward, China’s personal consumption is also forecasted to reach$12.7tln by 2030 at a CAGR of 11.5% reaching the same level as the US. In the long run, the government is also aiming to implementpoliciestargeted towards boosting domestic consumption such as its Made in China 2025 initiative. We are optimistic that the company’s strong fundamentals will allow it to ride therecoveryin consumer confidence and spending.\nNumber of annual active consumers across Alibaba's online shopping properties ('mln')\n\nSource:Statista\nAs discussed in our previous analysis on Alibaba, we expect the company to be able to sustain its growth due to several factors such as:\n\nContinued robust middle-class growth due to government policies on tax and investments\nUrban migration with the development of supercity clusters where Alibaba has an 85% penetration rate. The urbanisation rate is forecasted to be at75%by 2030 which is 15% higher than the current rate\nIntegration of verticals (logistics, cloud, fintech) to support its core commerce platforms\n\nIn terms of its business segment verticals, Alibaba Cloud is the most promising with expanding margins as it grows in scale. This is significant as e-commerce and fintech are the only profitable segments. However, its fintech segment continues to be pressured by the evolving regulatory environment which has cast a shadow over the company’s value. Additionally, we foresee its digital media segment remaining under pressure from intense competition within the Chinese video streaming market which guides our expectation that it may remain unprofitable for the foreseeable future.\nNearing Cloud Profitability May Lead to Margin Upside\nAlibaba Cloud is one of the most significant vertical business segments exhibiting strong integration potential with its core commerce platform. It is also the company’s largest non-core commerce business segment besides fintech, accounting for 6% of revenues. Alibaba Cloud became profitable for thefirst timein the previous quarter’searnings report. It achieved a significant milestone with positive adjusted EBITDA during the quarter since its inception in 2009.\nWith the realization of economies of scale, we expect the segment’s profitability to continue rising going forward. Alibaba Cloud is currently the market leader in China with a40%market share. Recently, the company also launched its Hybrid Cloud Partner Program and on-premises appliances which are set to enhance the offering in 2021 and beyond. The keyfocusof this new program is to extend its customer-centric strategy by providing customers a tailored experience of customising the cloud platform. Global companies such asHewlett Packard Enterprise(NYSE:HPE)have already started working with Alibaba Cloud and adopted the hybrid cloud platform to better their relationships with clients. Since Alibaba Cloud is the largest cloud service in China which is an important market, many companies will have to adopt Alibaba cloud into their infrastructure within the APAC region in order to seamlessly collaborate with Chinese clients.\nOverall, this isexpectedto increase demand through 2020 and beyond highlighting the importance of cloud within an organisation. We expect increased cloud adoption coupled with the new hybrid model from the company would allow it to maintain its top spot in the market. As the group realizes economies of scale, the profitability of the segment is set to grow. In comparison, the largest cloud providers excluding Google Cloud command high margins ranging between 29% and 38%. Despite its smaller scale with cloud revenues 5timesless than market leader AWS, Alibaba Cloud is growing at a higher rate than all major providers. As the company gains scale, we expect its profitability to rise in tandem and could attain the profitability levels seen with AWS (AMZN) or Azure (MSFT) within 2 to 3 years if it maintains its rapid growth to catch up with the scale of the top providers.\nLending Regulatory Developments in Ant Group\nThe halting of Ant Group IPO has been unfortunate for Alibaba which has a 33%stakein the subsidiary. Ant Group is an unconsolidated subsidiary of Alibaba. It is accounted for in Alibaba’s financial statements using the equity method. This means that the company recognizes its investment in Ant as an asset and records income as equity income. Earlier this year, the governor of the People’s Bank of China’sindicatedthat the company could resume its Ant Financial IPO if it settles the issues on user privacy and lending practices. Due to significant changes in the fintech regulatory environment in China, Ant Group is developing a rectification plan which will need to go through regulatory procedures but is subject to substantial uncertainties. According to its revenue breakdown, the company derives revenues from the payments, lending, asset & wealth management and insurance segments. The key segment at risk relates to its consumer lending activities which accounts for 35% of revenues.\n\nSource: Ant Group,HKEXNews\nOne of the potential restructuring exercises that may beimposedon Ant Group which has been in the works for several months includes turning the entity into a financial holding company. This means that the company will be subject to more stringent regulatory oversight and capital requirements in line with those ofbanks. Additionally, Ant Group said it would set up a personal credit reporting company that will comply with relevant laws and strengthen the protection of personal information and effectively prevent the abuse of data as part of the restructuring plan. This is unsurprising given the scale of its consumer lending segment which has overshadowed the major Chinese banks in terms of loan volumes as depicted in the chart below.\n\nSource: Financial Time\nAll in all, the Ant Group has grown to become a key player in the Chinese financial system and it would be reasonable for regulators to pay attention to the company’s affairs due to its significant influence over the economy. We view the heightened pressure on Ant Group’s lending activities to meet the strict banking regulations as essential to maintain a robust financial system and reduce systematic risk. Though, this may adversely impact its profitability and growth for the lending segment. However, we expect the company to at least maintain its place as a key player within the system owing to its rich consumer data and scale it has obtained over the years of rapid growth.\nMonopoly Crackdown Risk Lingers on But Not Solely Targeted At Alibaba\nRecently, Alibaba has been slapped with afineof $2.75 bln and continues to be closely monitored by Chinese regulators over its business practice of exclusivity on its commerce platform. The regulators are seeking to discourage the practice by major online commerce platforms to coerce merchants to become exclusive sellers on their platforms, this is a practice that has been allegedly done by Alibaba. However, the regulations appear to be aimed at creating a level playing field rather than singling out Alibaba in particular. The company’s vicechairmanhas also provided optimism despite the clampdown that the company has not breached any regulation and the fundamentals remain strong.\nRecent developments show that the Chinese government would not give any leeway to any company when it comes to misconduct. According to the State Administration for Market Regulation (SAMR), besides Alibaba, other Chinese internet giants such as Tencent Holding (OTCPK:TCEHY), Meituan (MEIT), as well as other e-commerce companies including Pinduoduo (PDD), JD.com (JD) were among the companies hauled in for a meeting with the antitrust watchdog, cyberspace administration and the tax authorities. The regulators made clear their stance against the anti-competitive behavior of forcing merchants to pick one platform, abusing their market position and misusing consumer data. The meeting stressed the requirements for these companies to heed their advice and conduct self-inspections of their business practices in the coming month and to publicly disclose their commitment to complying with the laws governing fair business practices. In our view, the rationale for the clampdown by regulators is aimed at promoting the industry growth by creating a level playing field thereby reducing the barriers of entrants of smaller startups and spurring consumer spending activity online by preventing price discrimination and predatory pricing.\nWe expect the impact of the Alibaba specifically to be negative in terms of potential market share leadership erosion as merchants would be able to sell on its competitors’ platforms, potentially redirecting some activity there. In broader terms, stricter regulations may encourage the emergence of startups while increasing competitive risk to the company. Based on our revenue projections, for every 1% decrease in market share, the company’s growth reduces by 2.1%. However, with amarket shareof at least 3 times larger than its closest competitor, JD.com, we foresee Alibaba maintaining its lead also cushioned by its massive user base and diverse segments integrated across its platforms which we expect leads to higher customer stickiness. In terms of the positive benefits of regulations that the company may see include higher consumer spending across the board as consumers. The overall rise in the economy may also benefit the company indirectly in the longer term.\nThus, we believe that Alibaba still stands to lose the most as it does command significant market power due to its large market share. That said, we do not view the company as a total monopoly. We also note that the Chinese e-commerce market is more competitive than perceived with competition from JD.com and Pinduoduo as well as smaller emerging online commerce platforms. Additionally, it has attained its market leadership through organic growth rather than through acquisitions due to the strong capabilities and diverse platforms across segments.\n\nSource: Alibaba, JD.com, Pinduoduo,China Internet Watch,\nUnprofitable Digital Media Segment Amid Rising Competition\nAlthough the company’s cloud segment is approaching profitability, its digital media segment continues to be losing money and competition in the video streaming market is intensifying. Previously, Youku was the market leader within the digital media segment in China. However, with increased competition from players such as Tencent, Youku’s market share has dropped. The video streaming platform is still among the top platforms used in China.\nThe company has focused on original content creation and developing a loyal membership plan which has helped boost the average daily subscriber base by30%. Synergies between Alibaba Pictures (OTC:ABPGF) and Youku are derived through complete in-house production of popular dramas. Alibaba Pictures has also recently seen success by producing the top three grossing films during Chinese New Year. These films accounted for 80% of box office sales during that period in China. Overall, the digital media space has experienced extreme competition in China with Alibaba having to constantly innovate in order to survive among its competitors. For a comparison, the largest streaming providers are Tencent Video and iQIYI(NASDAQ:IQ)with larger user bases than Youku. Additionally, short video streaming services such as Douyin, Kuaishou(OTCPK:KUASF)and Bilibili(NASDAQ:BILI)are also gaining popularity with superior growth rates than Youku.\nValuation\nThe company has a stellar average revenue growth rate of 43.5% in the past 5 years with gross and net margins of 55.5% and 35.3% respectively.\nAs seen in the company's cash flow chart above, the company’s free cash flow position has gradually improved over time as it expanded rapidly, with an average free cash flow margin of 12.31% in the past 10 years.\nThe company’s revenues are projected based on the forecasted growth in the total Chinese e-commerce sales as discussed in the previous analysis. According to the National Bureau of Statistics of China, online retail sales grew strongly at 10% in 2020 at RMB11,760 bln ($1.8 tln) despite the pandemic. Due to the regulatory pressures on the company’s business practices, we conservatively based its market share assumption to decline slightly. Still, the company is forecasted to grow its online sales volume by at least 30%.\nSource: Alibaba,National Bureau of Statistics of China,Fitch, China Internet Watch\nBased on an EV/EBITDA of 29.7x (E-commerce industry average) and a discount rate of 9% (company’s WACC), our model shows an upside of 43.7%.\nSource: Khaveen Investments\nVerdict\nAlibaba is supported by its strong fundamentals stemming from its market leadership and massive user base which continues to grow as well as tailwinds from a positive macroeconomic environment as Chinese consumption growth remains robust and China was the only major economy to deliver positive GDP growth in 2020. These factors underpin our thesis for the company in addition to its integration across key vertical business segments. Alibaba Cloud remains the top cloud provider in China and has achieved a significant milestone in becoming profitable since its inception. The rising profitability provides margin upside for the group. However, its other business segments are met with increasing challenges. The company’s fintech business continues to be plagued by regulatory threats where regulators are pushing for compliance with strict requirements especially due to the complexity of Ant’s business structure. Additionally, the digital media segment faces intense competition from rivals backed by Tencent and Baidu which guides our expectation that the segment may continue weighing on margins. Nonetheless, the fundamental strengths of its e-commerce platform which has faced a pushback remain highly attractive as a key proxy to Chinese consumption growth. Overall, we rate the company as aBuywith a target price of$329.72 (US ADR) or HKD319.8 (HK Stock).","news_type":1},"isVote":1,"tweetType":1,"viewCount":86,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}