Alibaba: It Isn't A "No-Brainer" Opportunity

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Alibaba: It Isn't A "No-Brainer" Opportunity

Seeking Alpha08-20

Alibaba investors cheered its recent earnings. Should they?BABA's recent outperformance suggests a turnaround is underway. However, underlying challenges have not been fully resolved.Cross-border ...

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King19
·08-20
There are many researchers with seeking Alpha I think. And this one is bad. That's why it would be good to indicate who wrote the article else their reputation would just go south 👎🏾
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SuperDuper1
·08-20
He didn't even talk about valuation or cash flow but just " momentum " . Terrible research .
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However, underlying challenges have not been fully resolved.Cross-border ...</p>\n\n<a href=\"https://seekingalpha.com/article/4715634-alibaba-it-isnt-a-no-brainer-opportunity\">Source Link</a>\n\n</div>\n","source":"seekingalpha","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: It Isn't A \"No-Brainer\" Opportunity</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: It Isn't A \"No-Brainer\" Opportunity\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-20 11:45 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4715634-alibaba-it-isnt-a-no-brainer-opportunity><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Alibaba investors cheered its recent earnings. Should they?BABA's recent outperformance suggests a turnaround is underway. However, underlying challenges have not been fully resolved.Cross-border ...</p>\n\n<a href=\"https://seekingalpha.com/article/4715634-alibaba-it-isnt-a-no-brainer-opportunity\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1105468828.SGD","symbol_name":"Allianz Total Return Asian Equity AM DIS H2-SGD","start_time":0,"source_url":"https://seekingalpha.com/article/4715634-alibaba-it-isnt-a-no-brainer-opportunity","article_id":"2460105510","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2460105510","pubTimestamp":1724125500,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Alibaba investors cheered its recent earnings. 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Should they?BABA's recent outperformance suggests a turnaround is underway. However, underlying challenges have not been fully resolved.Cross-border monetization and AI strategies are increasingly crucial. But these aren't straightforward.Alibaba's scale and profitability make it a formidable player.Despite that, I will explain why investors should not be too optimistic about its recent recovery. Read on to find out why.maybefalseAlibaba Investors Cheered Brighter ProspectsAlibaba Group Holding Limited (NYSE:BABA) investors cheered on its recent earnings release, even as BABA lost market share to its rivals. However, given the significant management overhaul over the past year, I assess that BABA's market share losses aren't new information. Hence, investors are likely looking past these challenges while expressing optimism that the worst in its stock decline could be over.Alibaba's FQ1 earnings release was well-received by the market. However, investors should note that it was a mixed card. Therefore, investors shouldn't expect BABA's recent earnings scorecard to provide the all-clear signal for buying more aggressively unless it can decisively revive its tepid growth prospects. The company could not meet Wall Street's estimates for revenue growth, even though it surpassed expectations for adjusted EPS. As a result, it suggests that Alibaba's ability to manage its operational efficiencies has improved, likely lifting buying sentiment, as the stock recently outperformed the S&P 500 (SP500).I downgraded the stock in my previous BABA article in July 2024, even though I'm not bearish. I underscored concerns about its past \"false dawns,\" suggesting buyers failed to hold on to their optimism. Could the recent recovery be different, even though China's economic troubles seem far from over? China's uneven consumption growth recovery isn't expected to be resolved in the near term, as the structural weakness in China's housing market seems far from over. In addition, China's PBOC isn't expected to bring out the bazooka even as the central bank might attempt to stimulate the economy. With housing credit growth possibly stagnating, I assess Alibaba will likely find it increasingly challenging to overcome market share losses to its peers.Alibaba's Monetization Strategies Will Be CrucialHowever, Alibaba management is increasingly confident it could increase monetization opportunities in its e-commerce business. As BABA competes more aggressively with its peers on pricing, it has also affected its customer management revenue growth momentum. As a result, Alibaba investors must pay close attention to the bifurcation between the company's customer management revenues (CMR) and gross merchandise value (GMV) growth metrics.Accordingly, the company's CMR growth has been \"lagging behind\" its GMV growth, indicating potential weaknesses or challenges in effective e-commerce monetization growth. Notably, GMV growth was up in the \"high single digits,\" while the company posted CMR growth of about 1% over the same period. Management assured investors its near-term focus is enhancing user experience and promoting \"purchase frequency and GMV.\" Therefore, subsequent monetization might be delayed as the company invests more aggressively to mitigate market share losses and regain growth momentum.Notwithstanding my caution, management's decision to impose a technology service fee, which \"starts at 0.6% of GMV,\" is expected to be accretive to its take rate structure. As a result, I assess that its confidence in lifting its monetization opportunities is reasonable. In addition, it also provided a timeline of about \"six to twelve months\" for its improved monetization efforts to possibly pan out. Hence, investors must follow its recent efforts closely to improve its topline growth opportunities, as it could help reignite investor sentiment.Moreover, Alibaba seems to have made significant progress in its global and cross-border businesses. Accordingly, the company's AIDC segment reported 32% revenue growth in FQ1, well above its corporate average of 4% growth. As a result, it emphasizes marked progress in its cross-border business, particularly in AliExpress. Accordingly, the company has capitalized on its massive supply chain and logistical capabilities to drive higher operational efficiencies and faster delivery for the segment. In addition, Alibaba also underscored its confidence that Lazada has achieved \"EBITDA positive for the first time for a single month in July of this year.\" Therefore, the company has proved its scale as it expands into the faster-growing international region, mitigating the share losses observed in its local market. Despite that, Sea Limited (SE) is still a behemoth and market leader in the Southeast Asian market. Despite that, SE's upgraded GMV guidance and improved take rates suggest that the intense competitive headwinds could have rationalized, promoting potentially more robust monetization prospects.In addition, Alibaba's AI-driven cloud computing strategy has continued in earnest. The company's scale should allow it to pursue more aggressive investment plans to drive market leadership in AI capabilities against its peers. While the US-driven chip restrictions to stymie China's AI leadership could have long-term ramifications, they also affect Alibaba's China cloud rivals. As a result, I assess that Alicloud's ability to lead in the Chinese market hasn't been significantly impeded. Moreover, the company reported \"triple-digit growth in AI-product revenue,\" underscoring solid progress in its AI efforts. Furthermore, management underscored its confidence that its CapEx investments and AI efforts could help the company \"return to double-digit revenue growth in the second half\" of FY2025 on a corporate level. As a result, I assess that the recent market optimism is likely predicated against improved clarity in Alibaba's forward guidance, as the market prices are in significant pessimism.Is BABA Stock A Buy, Sell, Or Hold?BABA Quant Ratings (Seeking Alpha)Notwithstanding the recent recovery, BABA isn't rated at a significant discount (\"C\" valuation grade) relative to its sector peers. Furthermore, Wall Street has downgraded BABA's revenue estimates, although earnings estimates have been upgraded. Therefore, investors should remain cautious, as BABA's \"F\" growth grade underscores the significant underlying challenges. In addition, the stock's momentum (\"C+\" grade) has weakened from its \"B-\" grade three months ago, suggesting investors should remain cautious about buying too aggressively.I continue to assess Alibaba's thesis cautiously, although not enough to downgrade the stock to a Sell. It's still profitable, although market share losses have hampered its ability to monetize more aggressively to drive topline growth. While its ability to reduce costs and improve operational efficiencies has progressed, driving revenue growth is critical to demonstrating its competitive capabilities against its faster-growing peers.China's tepid economic growth recovery could still affect Alibaba's growth momentum, even as it invests more aggressively in its cross-border efforts. While Lazada has demonstrated glimpses of achieving adjusted EBITDA profitability, we still need at least four consecutive quarters of solid performance to assess its sustainability better.Rating: Maintain Hold.Important note: Investors are reminded to do their due diligence and not rely on the information provided as financial advice. Consider this article as supplementing your required research. Please always apply independent thinking. Note that the rating is not intended to time a specific entry/exit at the point of writing unless otherwise specified.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":340388805157000,"gmtCreate":1724133678987,"gmtModify":1724133683277,"author":{"id":"4088135301967120","authorId":"4088135301967120","name":"King19","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":7,"crmLevelSwitch":0,"authorIdStr":"4088135301967120","idStr":"4088135301967120"},"htmlText":"There are many researchers with seeking Alpha I think. And this one is bad. That's why it would be good to indicate who wrote the article else their reputation would just go south 👎🏾","listText":"There are many researchers with seeking Alpha I think. And this one is bad. That's why it would be good to indicate who wrote the article else their reputation would just go south 👎🏾","text":"There are many researchers with seeking Alpha I think. And this one is bad. That's why it would be good to indicate who wrote the article else their reputation would just go south 👎🏾","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/340388805157000","repostId":2460105510,"repostType":2,"repost":{"id":"2460105510","pubTimestamp":1724125500,"share":"https://ttm.financial/m/news/2460105510?lang=&edition=fundamental","pubTime":"2024-08-20 11:45","market":"hk","language":"en","title":"Alibaba: It Isn't A \"No-Brainer\" Opportunity","url":"https://stock-news.laohu8.com/highlight/detail?id=2460105510","media":"Seeking Alpha","summary":"Alibaba investors cheered its recent earnings. Should they?","content":"<html><head></head><body><ul style=\"\"><li><p>Alibaba investors cheered its recent earnings. Should they?</p></li><li><p>BABA&#39;s recent outperformance suggests a turnaround is underway. However, underlying challenges have not been fully resolved.</p></li><li><p>Cross-border monetization and AI strategies are increasingly crucial. But these aren&#39;t straightforward.</p></li><li><p>Alibaba&#39;s scale and profitability make it a formidable player.</p></li><li><p>Despite that, I will explain why investors should not be too optimistic about its recent recovery. Read on to find out why.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/462cd3697f83bcec3578c700effe99fc\" alt=\"maybefalse\" title=\"maybefalse\" tg-width=\"750\" tg-height=\"500\"/><span>maybefalse</span></p><h2 id=\"id_3312529859\">Alibaba Investors Cheered Brighter Prospects</h2><p>Alibaba Group Holding Limited (NYSE:BABA) investors cheered on its recent earnings release, even as BABA lost market share to its rivals. However, given the significant management overhaul over the past year, I assess that BABA&#39;s market share losses aren&#39;t new information. Hence, investors are likely looking past these challenges while expressing optimism that the worst in its stock decline could be over.</p><p>Alibaba&#39;s FQ1 earnings release was well-received by the market. However, investors should note that it was a mixed card. Therefore, investors shouldn&#39;t expect BABA&#39;s recent earnings scorecard to provide the all-clear signal for buying more aggressively unless it can decisively revive its tepid growth prospects. The company could not meet Wall Street&#39;s estimates for revenue growth, even though it surpassed expectations for adjusted EPS. As a result, it suggests that Alibaba&#39;s ability to manage its operational efficiencies has improved, likely lifting buying sentiment, as the stock recently outperformed the S&amp;P 500 (SP500).</p><p>I downgraded the stock in my previous BABA article in July 2024, even though I&#39;m not bearish. I underscored concerns about its past &#34;false dawns,&#34; suggesting buyers failed to hold on to their optimism. Could the recent recovery be different, even though China&#39;s economic troubles seem far from over? China&#39;s uneven consumption growth recovery isn&#39;t expected to be resolved in the near term, as the structural weakness in China&#39;s housing market seems far from over. In addition, China&#39;s PBOC isn&#39;t expected to bring out the bazooka even as the central bank might attempt to stimulate the economy. With housing credit growth possibly stagnating, I assess Alibaba will likely find it increasingly challenging to overcome market share losses to its peers.</p><h2 id=\"id_1492234422\">Alibaba&#39;s Monetization Strategies Will Be Crucial</h2><p>However, Alibaba management is increasingly confident it could increase monetization opportunities in its e-commerce business. As BABA competes more aggressively with its peers on pricing, it has also affected its customer management revenue growth momentum. As a result, Alibaba investors must pay close attention to the bifurcation between the company&#39;s customer management revenues (CMR) and gross merchandise value (GMV) growth metrics.</p><p>Accordingly, the company&#39;s CMR growth has been &#34;lagging behind&#34; its GMV growth, indicating potential weaknesses or challenges in effective e-commerce monetization growth. Notably, GMV growth was up in the &#34;high single digits,&#34; while the company posted CMR growth of about 1% over the same period. Management assured investors its near-term focus is enhancing user experience and promoting &#34;purchase frequency and GMV.&#34; Therefore, subsequent monetization might be delayed as the company invests more aggressively to mitigate market share losses and regain growth momentum.</p><p>Notwithstanding my caution, management&#39;s decision to impose a technology service fee, which &#34;starts at 0.6% of GMV,&#34; is expected to be accretive to its take rate structure. As a result, I assess that its confidence in lifting its monetization opportunities is reasonable. In addition, it also provided a timeline of about &#34;six to twelve months&#34; for its improved monetization efforts to possibly pan out. Hence, investors must follow its recent efforts closely to improve its topline growth opportunities, as it could help reignite investor sentiment.</p><p>Moreover, Alibaba seems to have made significant progress in its global and cross-border businesses. Accordingly, the company&#39;s AIDC segment reported 32% revenue growth in FQ1, well above its corporate average of 4% growth. As a result, it emphasizes marked progress in its cross-border business, particularly in AliExpress. Accordingly, the company has capitalized on its massive supply chain and logistical capabilities to drive higher operational efficiencies and faster delivery for the segment. In addition, Alibaba also underscored its confidence that Lazada has achieved &#34;EBITDA positive for the first time for a single month in July of this year.&#34; Therefore, the company has proved its scale as it expands into the faster-growing international region, mitigating the share losses observed in its local market. Despite that, Sea Limited (SE) is still a behemoth and market leader in the Southeast Asian market. Despite that, SE&#39;s upgraded GMV guidance and improved take rates suggest that the intense competitive headwinds could have rationalized, promoting potentially more robust monetization prospects.</p><p>In addition, Alibaba&#39;s AI-driven cloud computing strategy has continued in earnest. The company&#39;s scale should allow it to pursue more aggressive investment plans to drive market leadership in AI capabilities against its peers. While the US-driven chip restrictions to stymie China&#39;s AI leadership could have long-term ramifications, they also affect Alibaba&#39;s China cloud rivals. As a result, I assess that Alicloud&#39;s ability to lead in the Chinese market hasn&#39;t been significantly impeded. Moreover, the company reported &#34;triple-digit growth in AI-product revenue,&#34; underscoring solid progress in its AI efforts. Furthermore, management underscored its confidence that its CapEx investments and AI efforts could help the company &#34;return to double-digit revenue growth in the second half&#34; of FY2025 on a corporate level. As a result, I assess that the recent market optimism is likely predicated against improved clarity in Alibaba&#39;s forward guidance, as the market prices are in significant pessimism.</p><h2 id=\"id_3936030445\">Is BABA Stock A Buy, Sell, Or Hold?</h2><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/5221f50a498241fe234e6e60031695ff\" alt=\"BABA Quant Ratings (Seeking Alpha)\" title=\"BABA Quant Ratings (Seeking Alpha)\" tg-width=\"402\" tg-height=\"322\"/><span>BABA Quant Ratings (Seeking Alpha)</span></p><p>Notwithstanding the recent recovery, BABA isn&#39;t rated at a significant discount (&#34;C&#34; valuation grade) relative to its sector peers. Furthermore, Wall Street has downgraded BABA&#39;s revenue estimates, although earnings estimates have been upgraded. Therefore, investors should remain cautious, as BABA&#39;s &#34;F&#34; growth grade underscores the significant underlying challenges. In addition, the stock&#39;s momentum (&#34;C+&#34; grade) has weakened from its &#34;B-&#34; grade three months ago, suggesting investors should remain cautious about buying too aggressively.</p><p>I continue to assess Alibaba&#39;s thesis cautiously, although not enough to downgrade the stock to a Sell. It&#39;s still profitable, although market share losses have hampered its ability to monetize more aggressively to drive topline growth. While its ability to reduce costs and improve operational efficiencies has progressed, driving revenue growth is critical to demonstrating its competitive capabilities against its faster-growing peers.</p><p>China&#39;s tepid economic growth recovery could still affect Alibaba&#39;s growth momentum, even as it invests more aggressively in its cross-border efforts. While Lazada has demonstrated glimpses of achieving adjusted EBITDA profitability, we still need at least four consecutive quarters of solid performance to assess its sustainability better.</p><p><em>Rating: Maintain Hold.</em></p><p><em>Important note: Investors are reminded to do their due diligence and not rely on the information provided as financial advice. Consider this article as supplementing your required research. Please always apply independent thinking. Note that the rating is not intended to time a specific entry/exit at the point of writing unless otherwise specified.</em></p></body></html>","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: It Isn't A \"No-Brainer\" Opportunity</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: It Isn't A \"No-Brainer\" Opportunity\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-20 11:45 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4715634-alibaba-it-isnt-a-no-brainer-opportunity><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Alibaba investors cheered its recent earnings. Should they?BABA's recent outperformance suggests a turnaround is underway. However, underlying challenges have not been fully resolved.Cross-border ...</p>\n\n<a href=\"https://seekingalpha.com/article/4715634-alibaba-it-isnt-a-no-brainer-opportunity\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"89988":"阿里巴巴-WR","LU1105468828.SGD":"Allianz Total Return Asian Equity AM DIS H2-SGD","LU2045819591.USD":"Natixis WCM Global Emerging Markets Equity R/A USD","LU0251143029.SGD":"Fidelity ASEAN A-SGD","SG9999014492.USD":"NIKKO AM ASEAN EQUITY \"A\" (USD) ACC","LU0084288322.USD":"Natixis Asia Equity RD USD","LU0210637038.USD":"HSBC GIF THAI EQUITY \"AD\" INC","SG9999002414.USD":"LIONGLOBAL SINGAPORE TRUST (USD) ACC","LU0737861269.HKD":"FIDELITY ASEAN \"A \" (HKD) ACC","LU2125910500.SGD":"Natixis WCM Global Emerging Markets Equity H-R/A SGD","BK1608":"元宇宙概念","BK1502":"双十一","LU0287142896.SGD":"Fidelity China Focus A-SGD","09988":"阿里巴巴-W","BK1575":"同股不同权","LU1688375341.USD":"贝莱德中国灵活股票基金","BK4548":"巴美列捷福持仓","LU0532188223.SGD":"JPMorgan Funds - ASEAN Equity A (acc) SGD","BK1501":"阿里概念股","IE00B3M56506.USD":"NEUBERGER BERMAN EMERGING MARKETS EQUITY \"A\" (USD) ACC","LU1046421795.USD":"富达环球科技A-ACC","IE00BPRC5H50.USD":"NEUBERGER BERMAN CHINA EQUITY \"A\" (USD) INC","BK4575":"芯片概念","LU0918141887.USD":"安联亚洲实际收益股票基金","LU0127658192.USD":"EASTSPRING INVESTMENTS GLOBAL TECHNOLOGY \"A\" (USD) ACC","SGXZ58947870.SGD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (SGDHDG) INC","LU0163747925.USD":"EASTSPRING INVESTMENTS ASIAN EQUITY A ACC","HK0000320223.HKD":"TAIKANG KAITAI CHINA NEW OPPORTUNITIES FUND \"A\" (HKD) ACC","LU0314109678.HKD":"MANULIFE GF DRAGON GROWTH \"AA\" (HKD) INC","LU0307460666.USD":"EASTSPRING INVESTMENTS CHINA EQUITY \"A\" ACC","LU0348816934.USD":"ALLIANZ TOTAL RETURN ASIAN EQUITY \"AT\" (USD)","SG9999002620.SGD":"LionGlobal South East Asia SGD","LU1046422090.SGD":"Fidelity Pacific A-SGD","BK4579":"人工智能","LU0231483743.USD":"abrdn SICAV I - ALL CHINA SUSTAINABLE EQUITY \"A\" (USD) ACC","HK0000320264.USD":"TAIKANG KAITAI CHINA NEW OPPORTUNITIES FUND \"A\" (USD) ACC","BK4503":"景林资产持仓","BK4502":"阿里概念","LU0293314216.USD":"ALLIANZ GEM EQUITY HIGH DIVIDEND \"A\" (USD) ACC","SG9999006266.SGD":"MANULIFE SINGAPORE EQUITY \"A\" (SGD) ACC","BABA":"阿里巴巴","BK4505":"高瓴资本持仓","SG9999002604.SGD":"LionGlobal Singapore/Malaysia SGD","LU0132412106.USD":"abrdn SICAV I - EMERGING MARKETS EQUITY \"A\" (USD) ACC","BK4581":"高盛持仓","BK4504":"桥水持仓","SG9999002679.SGD":"LionGlobal Singapore Balanced SGD","LU0211977185.USD":"EASTSPRING INVESTMENTS GREATER CHINA EQUITY \"A\" ACC","SG9999013486.USD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (USD) INC A"},"source_url":"https://seekingalpha.com/article/4715634-alibaba-it-isnt-a-no-brainer-opportunity","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2460105510","content_text":"Alibaba investors cheered its recent earnings. Should they?BABA's recent outperformance suggests a turnaround is underway. However, underlying challenges have not been fully resolved.Cross-border monetization and AI strategies are increasingly crucial. But these aren't straightforward.Alibaba's scale and profitability make it a formidable player.Despite that, I will explain why investors should not be too optimistic about its recent recovery. Read on to find out why.maybefalseAlibaba Investors Cheered Brighter ProspectsAlibaba Group Holding Limited (NYSE:BABA) investors cheered on its recent earnings release, even as BABA lost market share to its rivals. However, given the significant management overhaul over the past year, I assess that BABA's market share losses aren't new information. Hence, investors are likely looking past these challenges while expressing optimism that the worst in its stock decline could be over.Alibaba's FQ1 earnings release was well-received by the market. However, investors should note that it was a mixed card. Therefore, investors shouldn't expect BABA's recent earnings scorecard to provide the all-clear signal for buying more aggressively unless it can decisively revive its tepid growth prospects. The company could not meet Wall Street's estimates for revenue growth, even though it surpassed expectations for adjusted EPS. As a result, it suggests that Alibaba's ability to manage its operational efficiencies has improved, likely lifting buying sentiment, as the stock recently outperformed the S&P 500 (SP500).I downgraded the stock in my previous BABA article in July 2024, even though I'm not bearish. I underscored concerns about its past \"false dawns,\" suggesting buyers failed to hold on to their optimism. Could the recent recovery be different, even though China's economic troubles seem far from over? China's uneven consumption growth recovery isn't expected to be resolved in the near term, as the structural weakness in China's housing market seems far from over. In addition, China's PBOC isn't expected to bring out the bazooka even as the central bank might attempt to stimulate the economy. With housing credit growth possibly stagnating, I assess Alibaba will likely find it increasingly challenging to overcome market share losses to its peers.Alibaba's Monetization Strategies Will Be CrucialHowever, Alibaba management is increasingly confident it could increase monetization opportunities in its e-commerce business. As BABA competes more aggressively with its peers on pricing, it has also affected its customer management revenue growth momentum. As a result, Alibaba investors must pay close attention to the bifurcation between the company's customer management revenues (CMR) and gross merchandise value (GMV) growth metrics.Accordingly, the company's CMR growth has been \"lagging behind\" its GMV growth, indicating potential weaknesses or challenges in effective e-commerce monetization growth. Notably, GMV growth was up in the \"high single digits,\" while the company posted CMR growth of about 1% over the same period. Management assured investors its near-term focus is enhancing user experience and promoting \"purchase frequency and GMV.\" Therefore, subsequent monetization might be delayed as the company invests more aggressively to mitigate market share losses and regain growth momentum.Notwithstanding my caution, management's decision to impose a technology service fee, which \"starts at 0.6% of GMV,\" is expected to be accretive to its take rate structure. As a result, I assess that its confidence in lifting its monetization opportunities is reasonable. In addition, it also provided a timeline of about \"six to twelve months\" for its improved monetization efforts to possibly pan out. Hence, investors must follow its recent efforts closely to improve its topline growth opportunities, as it could help reignite investor sentiment.Moreover, Alibaba seems to have made significant progress in its global and cross-border businesses. Accordingly, the company's AIDC segment reported 32% revenue growth in FQ1, well above its corporate average of 4% growth. As a result, it emphasizes marked progress in its cross-border business, particularly in AliExpress. Accordingly, the company has capitalized on its massive supply chain and logistical capabilities to drive higher operational efficiencies and faster delivery for the segment. In addition, Alibaba also underscored its confidence that Lazada has achieved \"EBITDA positive for the first time for a single month in July of this year.\" Therefore, the company has proved its scale as it expands into the faster-growing international region, mitigating the share losses observed in its local market. Despite that, Sea Limited (SE) is still a behemoth and market leader in the Southeast Asian market. Despite that, SE's upgraded GMV guidance and improved take rates suggest that the intense competitive headwinds could have rationalized, promoting potentially more robust monetization prospects.In addition, Alibaba's AI-driven cloud computing strategy has continued in earnest. The company's scale should allow it to pursue more aggressive investment plans to drive market leadership in AI capabilities against its peers. While the US-driven chip restrictions to stymie China's AI leadership could have long-term ramifications, they also affect Alibaba's China cloud rivals. As a result, I assess that Alicloud's ability to lead in the Chinese market hasn't been significantly impeded. Moreover, the company reported \"triple-digit growth in AI-product revenue,\" underscoring solid progress in its AI efforts. Furthermore, management underscored its confidence that its CapEx investments and AI efforts could help the company \"return to double-digit revenue growth in the second half\" of FY2025 on a corporate level. As a result, I assess that the recent market optimism is likely predicated against improved clarity in Alibaba's forward guidance, as the market prices are in significant pessimism.Is BABA Stock A Buy, Sell, Or Hold?BABA Quant Ratings (Seeking Alpha)Notwithstanding the recent recovery, BABA isn't rated at a significant discount (\"C\" valuation grade) relative to its sector peers. Furthermore, Wall Street has downgraded BABA's revenue estimates, although earnings estimates have been upgraded. Therefore, investors should remain cautious, as BABA's \"F\" growth grade underscores the significant underlying challenges. In addition, the stock's momentum (\"C+\" grade) has weakened from its \"B-\" grade three months ago, suggesting investors should remain cautious about buying too aggressively.I continue to assess Alibaba's thesis cautiously, although not enough to downgrade the stock to a Sell. It's still profitable, although market share losses have hampered its ability to monetize more aggressively to drive topline growth. While its ability to reduce costs and improve operational efficiencies has progressed, driving revenue growth is critical to demonstrating its competitive capabilities against its faster-growing peers.China's tepid economic growth recovery could still affect Alibaba's growth momentum, even as it invests more aggressively in its cross-border efforts. While Lazada has demonstrated glimpses of achieving adjusted EBITDA profitability, we still need at least four consecutive quarters of solid performance to assess its sustainability better.Rating: Maintain Hold.Important note: Investors are reminded to do their due diligence and not rely on the information provided as financial advice. Consider this article as supplementing your required research. Please always apply independent thinking. Note that the rating is not intended to time a specific entry/exit at the point of writing unless otherwise specified.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":340386366361736,"gmtCreate":1724133083578,"gmtModify":1724133087336,"author":{"id":"4136897647765072","authorId":"4136897647765072","name":"SuperDuper1","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","vip":1,"crmLevel":9,"crmLevelSwitch":1,"authorIdStr":"4136897647765072","idStr":"4136897647765072"},"htmlText":"He didn't even talk about valuation or cash flow but just \" momentum \" . Terrible research .","listText":"He didn't even talk about valuation or cash flow but just \" momentum \" . Terrible research .","text":"He didn't even talk about valuation or cash flow but just \" momentum \" . Terrible research .","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/340386366361736","repostId":2460105510,"repostType":2,"repost":{"id":"2460105510","pubTimestamp":1724125500,"share":"https://ttm.financial/m/news/2460105510?lang=&edition=fundamental","pubTime":"2024-08-20 11:45","market":"hk","language":"en","title":"Alibaba: It Isn't A \"No-Brainer\" Opportunity","url":"https://stock-news.laohu8.com/highlight/detail?id=2460105510","media":"Seeking Alpha","summary":"Alibaba investors cheered its recent earnings. Should they?","content":"<html><head></head><body><ul style=\"\"><li><p>Alibaba investors cheered its recent earnings. Should they?</p></li><li><p>BABA&#39;s recent outperformance suggests a turnaround is underway. However, underlying challenges have not been fully resolved.</p></li><li><p>Cross-border monetization and AI strategies are increasingly crucial. But these aren&#39;t straightforward.</p></li><li><p>Alibaba&#39;s scale and profitability make it a formidable player.</p></li><li><p>Despite that, I will explain why investors should not be too optimistic about its recent recovery. Read on to find out why.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/462cd3697f83bcec3578c700effe99fc\" alt=\"maybefalse\" title=\"maybefalse\" tg-width=\"750\" tg-height=\"500\"/><span>maybefalse</span></p><h2 id=\"id_3312529859\">Alibaba Investors Cheered Brighter Prospects</h2><p>Alibaba Group Holding Limited (NYSE:BABA) investors cheered on its recent earnings release, even as BABA lost market share to its rivals. However, given the significant management overhaul over the past year, I assess that BABA&#39;s market share losses aren&#39;t new information. Hence, investors are likely looking past these challenges while expressing optimism that the worst in its stock decline could be over.</p><p>Alibaba&#39;s FQ1 earnings release was well-received by the market. However, investors should note that it was a mixed card. Therefore, investors shouldn&#39;t expect BABA&#39;s recent earnings scorecard to provide the all-clear signal for buying more aggressively unless it can decisively revive its tepid growth prospects. The company could not meet Wall Street&#39;s estimates for revenue growth, even though it surpassed expectations for adjusted EPS. As a result, it suggests that Alibaba&#39;s ability to manage its operational efficiencies has improved, likely lifting buying sentiment, as the stock recently outperformed the S&amp;P 500 (SP500).</p><p>I downgraded the stock in my previous BABA article in July 2024, even though I&#39;m not bearish. I underscored concerns about its past &#34;false dawns,&#34; suggesting buyers failed to hold on to their optimism. Could the recent recovery be different, even though China&#39;s economic troubles seem far from over? China&#39;s uneven consumption growth recovery isn&#39;t expected to be resolved in the near term, as the structural weakness in China&#39;s housing market seems far from over. In addition, China&#39;s PBOC isn&#39;t expected to bring out the bazooka even as the central bank might attempt to stimulate the economy. With housing credit growth possibly stagnating, I assess Alibaba will likely find it increasingly challenging to overcome market share losses to its peers.</p><h2 id=\"id_1492234422\">Alibaba&#39;s Monetization Strategies Will Be Crucial</h2><p>However, Alibaba management is increasingly confident it could increase monetization opportunities in its e-commerce business. As BABA competes more aggressively with its peers on pricing, it has also affected its customer management revenue growth momentum. As a result, Alibaba investors must pay close attention to the bifurcation between the company&#39;s customer management revenues (CMR) and gross merchandise value (GMV) growth metrics.</p><p>Accordingly, the company&#39;s CMR growth has been &#34;lagging behind&#34; its GMV growth, indicating potential weaknesses or challenges in effective e-commerce monetization growth. Notably, GMV growth was up in the &#34;high single digits,&#34; while the company posted CMR growth of about 1% over the same period. Management assured investors its near-term focus is enhancing user experience and promoting &#34;purchase frequency and GMV.&#34; Therefore, subsequent monetization might be delayed as the company invests more aggressively to mitigate market share losses and regain growth momentum.</p><p>Notwithstanding my caution, management&#39;s decision to impose a technology service fee, which &#34;starts at 0.6% of GMV,&#34; is expected to be accretive to its take rate structure. As a result, I assess that its confidence in lifting its monetization opportunities is reasonable. In addition, it also provided a timeline of about &#34;six to twelve months&#34; for its improved monetization efforts to possibly pan out. Hence, investors must follow its recent efforts closely to improve its topline growth opportunities, as it could help reignite investor sentiment.</p><p>Moreover, Alibaba seems to have made significant progress in its global and cross-border businesses. Accordingly, the company&#39;s AIDC segment reported 32% revenue growth in FQ1, well above its corporate average of 4% growth. As a result, it emphasizes marked progress in its cross-border business, particularly in AliExpress. Accordingly, the company has capitalized on its massive supply chain and logistical capabilities to drive higher operational efficiencies and faster delivery for the segment. In addition, Alibaba also underscored its confidence that Lazada has achieved &#34;EBITDA positive for the first time for a single month in July of this year.&#34; Therefore, the company has proved its scale as it expands into the faster-growing international region, mitigating the share losses observed in its local market. Despite that, Sea Limited (SE) is still a behemoth and market leader in the Southeast Asian market. Despite that, SE&#39;s upgraded GMV guidance and improved take rates suggest that the intense competitive headwinds could have rationalized, promoting potentially more robust monetization prospects.</p><p>In addition, Alibaba&#39;s AI-driven cloud computing strategy has continued in earnest. The company&#39;s scale should allow it to pursue more aggressive investment plans to drive market leadership in AI capabilities against its peers. While the US-driven chip restrictions to stymie China&#39;s AI leadership could have long-term ramifications, they also affect Alibaba&#39;s China cloud rivals. As a result, I assess that Alicloud&#39;s ability to lead in the Chinese market hasn&#39;t been significantly impeded. Moreover, the company reported &#34;triple-digit growth in AI-product revenue,&#34; underscoring solid progress in its AI efforts. Furthermore, management underscored its confidence that its CapEx investments and AI efforts could help the company &#34;return to double-digit revenue growth in the second half&#34; of FY2025 on a corporate level. As a result, I assess that the recent market optimism is likely predicated against improved clarity in Alibaba&#39;s forward guidance, as the market prices are in significant pessimism.</p><h2 id=\"id_3936030445\">Is BABA Stock A Buy, Sell, Or Hold?</h2><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/5221f50a498241fe234e6e60031695ff\" alt=\"BABA Quant Ratings (Seeking Alpha)\" title=\"BABA Quant Ratings (Seeking Alpha)\" tg-width=\"402\" tg-height=\"322\"/><span>BABA Quant Ratings (Seeking Alpha)</span></p><p>Notwithstanding the recent recovery, BABA isn&#39;t rated at a significant discount (&#34;C&#34; valuation grade) relative to its sector peers. Furthermore, Wall Street has downgraded BABA&#39;s revenue estimates, although earnings estimates have been upgraded. Therefore, investors should remain cautious, as BABA&#39;s &#34;F&#34; growth grade underscores the significant underlying challenges. In addition, the stock&#39;s momentum (&#34;C+&#34; grade) has weakened from its &#34;B-&#34; grade three months ago, suggesting investors should remain cautious about buying too aggressively.</p><p>I continue to assess Alibaba&#39;s thesis cautiously, although not enough to downgrade the stock to a Sell. It&#39;s still profitable, although market share losses have hampered its ability to monetize more aggressively to drive topline growth. While its ability to reduce costs and improve operational efficiencies has progressed, driving revenue growth is critical to demonstrating its competitive capabilities against its faster-growing peers.</p><p>China&#39;s tepid economic growth recovery could still affect Alibaba&#39;s growth momentum, even as it invests more aggressively in its cross-border efforts. While Lazada has demonstrated glimpses of achieving adjusted EBITDA profitability, we still need at least four consecutive quarters of solid performance to assess its sustainability better.</p><p><em>Rating: Maintain Hold.</em></p><p><em>Important note: Investors are reminded to do their due diligence and not rely on the information provided as financial advice. Consider this article as supplementing your required research. Please always apply independent thinking. Note that the rating is not intended to time a specific entry/exit at the point of writing unless otherwise specified.</em></p></body></html>","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: It Isn't A \"No-Brainer\" Opportunity</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: It Isn't A \"No-Brainer\" Opportunity\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-20 11:45 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4715634-alibaba-it-isnt-a-no-brainer-opportunity><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Alibaba investors cheered its recent earnings. Should they?BABA's recent outperformance suggests a turnaround is underway. However, underlying challenges have not been fully resolved.Cross-border ...</p>\n\n<a href=\"https://seekingalpha.com/article/4715634-alibaba-it-isnt-a-no-brainer-opportunity\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"89988":"阿里巴巴-WR","LU1105468828.SGD":"Allianz Total Return Asian Equity AM DIS H2-SGD","LU2045819591.USD":"Natixis WCM Global Emerging Markets Equity R/A USD","LU0251143029.SGD":"Fidelity ASEAN A-SGD","SG9999014492.USD":"NIKKO AM ASEAN EQUITY \"A\" (USD) ACC","LU0084288322.USD":"Natixis Asia Equity RD USD","LU0210637038.USD":"HSBC GIF THAI EQUITY \"AD\" INC","SG9999002414.USD":"LIONGLOBAL SINGAPORE TRUST (USD) ACC","LU0737861269.HKD":"FIDELITY ASEAN \"A \" (HKD) ACC","LU2125910500.SGD":"Natixis WCM Global Emerging Markets Equity H-R/A SGD","BK1608":"元宇宙概念","BK1502":"双十一","LU0287142896.SGD":"Fidelity China Focus A-SGD","09988":"阿里巴巴-W","BK1575":"同股不同权","LU1688375341.USD":"贝莱德中国灵活股票基金","BK4548":"巴美列捷福持仓","LU0532188223.SGD":"JPMorgan Funds - ASEAN Equity A (acc) SGD","BK1501":"阿里概念股","IE00B3M56506.USD":"NEUBERGER BERMAN EMERGING MARKETS EQUITY \"A\" (USD) ACC","LU1046421795.USD":"富达环球科技A-ACC","IE00BPRC5H50.USD":"NEUBERGER BERMAN CHINA EQUITY \"A\" (USD) INC","BK4575":"芯片概念","LU0918141887.USD":"安联亚洲实际收益股票基金","LU0127658192.USD":"EASTSPRING INVESTMENTS GLOBAL TECHNOLOGY \"A\" (USD) ACC","SGXZ58947870.SGD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (SGDHDG) INC","LU0163747925.USD":"EASTSPRING INVESTMENTS ASIAN EQUITY A ACC","HK0000320223.HKD":"TAIKANG KAITAI CHINA NEW OPPORTUNITIES FUND \"A\" (HKD) ACC","LU0314109678.HKD":"MANULIFE GF DRAGON GROWTH \"AA\" (HKD) INC","LU0307460666.USD":"EASTSPRING INVESTMENTS CHINA EQUITY \"A\" ACC","LU0348816934.USD":"ALLIANZ TOTAL RETURN ASIAN EQUITY \"AT\" (USD)","SG9999002620.SGD":"LionGlobal South East Asia SGD","LU1046422090.SGD":"Fidelity Pacific A-SGD","BK4579":"人工智能","LU0231483743.USD":"abrdn SICAV I - ALL CHINA SUSTAINABLE EQUITY \"A\" (USD) ACC","HK0000320264.USD":"TAIKANG KAITAI CHINA NEW OPPORTUNITIES FUND \"A\" (USD) ACC","BK4503":"景林资产持仓","BK4502":"阿里概念","LU0293314216.USD":"ALLIANZ GEM EQUITY HIGH DIVIDEND \"A\" (USD) ACC","SG9999006266.SGD":"MANULIFE SINGAPORE EQUITY \"A\" (SGD) ACC","BABA":"阿里巴巴","BK4505":"高瓴资本持仓","SG9999002604.SGD":"LionGlobal Singapore/Malaysia SGD","LU0132412106.USD":"abrdn SICAV I - EMERGING MARKETS EQUITY \"A\" (USD) ACC","BK4581":"高盛持仓","BK4504":"桥水持仓","SG9999002679.SGD":"LionGlobal Singapore Balanced SGD","LU0211977185.USD":"EASTSPRING INVESTMENTS GREATER CHINA EQUITY \"A\" ACC","SG9999013486.USD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (USD) INC A"},"source_url":"https://seekingalpha.com/article/4715634-alibaba-it-isnt-a-no-brainer-opportunity","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2460105510","content_text":"Alibaba investors cheered its recent earnings. Should they?BABA's recent outperformance suggests a turnaround is underway. However, underlying challenges have not been fully resolved.Cross-border monetization and AI strategies are increasingly crucial. But these aren't straightforward.Alibaba's scale and profitability make it a formidable player.Despite that, I will explain why investors should not be too optimistic about its recent recovery. Read on to find out why.maybefalseAlibaba Investors Cheered Brighter ProspectsAlibaba Group Holding Limited (NYSE:BABA) investors cheered on its recent earnings release, even as BABA lost market share to its rivals. However, given the significant management overhaul over the past year, I assess that BABA's market share losses aren't new information. Hence, investors are likely looking past these challenges while expressing optimism that the worst in its stock decline could be over.Alibaba's FQ1 earnings release was well-received by the market. However, investors should note that it was a mixed card. Therefore, investors shouldn't expect BABA's recent earnings scorecard to provide the all-clear signal for buying more aggressively unless it can decisively revive its tepid growth prospects. The company could not meet Wall Street's estimates for revenue growth, even though it surpassed expectations for adjusted EPS. As a result, it suggests that Alibaba's ability to manage its operational efficiencies has improved, likely lifting buying sentiment, as the stock recently outperformed the S&P 500 (SP500).I downgraded the stock in my previous BABA article in July 2024, even though I'm not bearish. I underscored concerns about its past \"false dawns,\" suggesting buyers failed to hold on to their optimism. Could the recent recovery be different, even though China's economic troubles seem far from over? China's uneven consumption growth recovery isn't expected to be resolved in the near term, as the structural weakness in China's housing market seems far from over. In addition, China's PBOC isn't expected to bring out the bazooka even as the central bank might attempt to stimulate the economy. With housing credit growth possibly stagnating, I assess Alibaba will likely find it increasingly challenging to overcome market share losses to its peers.Alibaba's Monetization Strategies Will Be CrucialHowever, Alibaba management is increasingly confident it could increase monetization opportunities in its e-commerce business. As BABA competes more aggressively with its peers on pricing, it has also affected its customer management revenue growth momentum. As a result, Alibaba investors must pay close attention to the bifurcation between the company's customer management revenues (CMR) and gross merchandise value (GMV) growth metrics.Accordingly, the company's CMR growth has been \"lagging behind\" its GMV growth, indicating potential weaknesses or challenges in effective e-commerce monetization growth. Notably, GMV growth was up in the \"high single digits,\" while the company posted CMR growth of about 1% over the same period. Management assured investors its near-term focus is enhancing user experience and promoting \"purchase frequency and GMV.\" Therefore, subsequent monetization might be delayed as the company invests more aggressively to mitigate market share losses and regain growth momentum.Notwithstanding my caution, management's decision to impose a technology service fee, which \"starts at 0.6% of GMV,\" is expected to be accretive to its take rate structure. As a result, I assess that its confidence in lifting its monetization opportunities is reasonable. In addition, it also provided a timeline of about \"six to twelve months\" for its improved monetization efforts to possibly pan out. Hence, investors must follow its recent efforts closely to improve its topline growth opportunities, as it could help reignite investor sentiment.Moreover, Alibaba seems to have made significant progress in its global and cross-border businesses. Accordingly, the company's AIDC segment reported 32% revenue growth in FQ1, well above its corporate average of 4% growth. As a result, it emphasizes marked progress in its cross-border business, particularly in AliExpress. Accordingly, the company has capitalized on its massive supply chain and logistical capabilities to drive higher operational efficiencies and faster delivery for the segment. In addition, Alibaba also underscored its confidence that Lazada has achieved \"EBITDA positive for the first time for a single month in July of this year.\" Therefore, the company has proved its scale as it expands into the faster-growing international region, mitigating the share losses observed in its local market. Despite that, Sea Limited (SE) is still a behemoth and market leader in the Southeast Asian market. Despite that, SE's upgraded GMV guidance and improved take rates suggest that the intense competitive headwinds could have rationalized, promoting potentially more robust monetization prospects.In addition, Alibaba's AI-driven cloud computing strategy has continued in earnest. The company's scale should allow it to pursue more aggressive investment plans to drive market leadership in AI capabilities against its peers. While the US-driven chip restrictions to stymie China's AI leadership could have long-term ramifications, they also affect Alibaba's China cloud rivals. As a result, I assess that Alicloud's ability to lead in the Chinese market hasn't been significantly impeded. Moreover, the company reported \"triple-digit growth in AI-product revenue,\" underscoring solid progress in its AI efforts. Furthermore, management underscored its confidence that its CapEx investments and AI efforts could help the company \"return to double-digit revenue growth in the second half\" of FY2025 on a corporate level. As a result, I assess that the recent market optimism is likely predicated against improved clarity in Alibaba's forward guidance, as the market prices are in significant pessimism.Is BABA Stock A Buy, Sell, Or Hold?BABA Quant Ratings (Seeking Alpha)Notwithstanding the recent recovery, BABA isn't rated at a significant discount (\"C\" valuation grade) relative to its sector peers. Furthermore, Wall Street has downgraded BABA's revenue estimates, although earnings estimates have been upgraded. Therefore, investors should remain cautious, as BABA's \"F\" growth grade underscores the significant underlying challenges. In addition, the stock's momentum (\"C+\" grade) has weakened from its \"B-\" grade three months ago, suggesting investors should remain cautious about buying too aggressively.I continue to assess Alibaba's thesis cautiously, although not enough to downgrade the stock to a Sell. It's still profitable, although market share losses have hampered its ability to monetize more aggressively to drive topline growth. While its ability to reduce costs and improve operational efficiencies has progressed, driving revenue growth is critical to demonstrating its competitive capabilities against its faster-growing peers.China's tepid economic growth recovery could still affect Alibaba's growth momentum, even as it invests more aggressively in its cross-border efforts. While Lazada has demonstrated glimpses of achieving adjusted EBITDA profitability, we still need at least four consecutive quarters of solid performance to assess its sustainability better.Rating: Maintain Hold.Important note: Investors are reminded to do their due diligence and not rely on the information provided as financial advice. Consider this article as supplementing your required research. Please always apply independent thinking. Note that the rating is not intended to time a specific entry/exit at the point of writing unless otherwise specified.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":3,"commentSize":2,"repostSize":2,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}