To The Moon

🌟🌟🌟$Alibaba(BABA)$ 

Alibaba's restructuring of its business from 1 into 6 is paying off for the conglomerate.  Alibaba has reported solid growth in revenue and profit in Q2 2023 with improvements in all business segments, strong momentum and a laser focus on operating efficiency.   Alibaba has unleashed new Energy across all its businesses with this reorganisation.

For the quarter ended June 30, Alibaba said that net income climbed an impressive 63% to RMB 33 billion from RMB 20.3 billion last year, beating Wall Street forecast of RMB 28.66 billion.

Diluted earnings per share rose 56% to RMB 1.66 from RMB 1.06 while revenue jumped 14% to RMB 234.16 from RMB 205.56 billion, ahead of forecasts of RMB 224.92.

Alibaba's main business, Taobao and TMall Group saw revenue rise 12% to RMB 114.95 billion with the Taobao app for online shopping seeing a 6.5% rise in daily active users from previous year.

Revenue from international commerce retail soared 60% year on year to RMB 17.14 billion driving revenue for Alibaba's Cainiao logistics business up by 34% to RMB 23.16 billion.

Alibaba's cloud business posted revenue growth of 4% to RMB 25.12 billion.

Benchmark analysts said that Alibaba has a Buy Rating with a USD 180 Target price, representing an upside potential of 85%!  They highlighted that Alibaba's new consumer centric approach has started bearing early fruit as the company has undergone a Fundamental turnaround with Alibaba's international retail, Cainiao are back on high growth trajectory with a marked improvement on profitability.

Alibaba's share price dropped 3.5% last Friday in tandem with the other Chinese stocks as investors were disappointed by the authorities' latest stimulus measures amid fresh data showing that post pandemic recovering is slowing down.

I am Bearish on Alibaba in the short term due to the macro economics headwinds and the geopolitical tensions between the US and China. But I am bullish on Alibaba in the long term as there is exponential growth ahead for this wonderful conglomerate.  I believe one of the main growth drivers will be Ali Cloud as Alibaba continues to invest in AI development with the goal of making Taobao app a one stop AI Powered portal for life and consumption.

At the last closing price of USD 95.72, I believe that Alibaba is undervalued.    Alibaba has a wide economic moat due to its extensive network of companies and pole position in ECommerce.  Alibaba ticks all the core fundamentals of a quality stock.  It is profitable, has an excellent balance sheet and a great management team.  Alibaba is also rewarding its investors with a share buy back program of USD 40 billion till March 2025.

It is time for Alibaba to shine and continue its growth trajectory for the next decade. 

So for me, Alibaba is definitely a Buy! 

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