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P H
Nov 03,2018 07:54:28
  • Alibaba (US:BABA) gains 4.6% on Q2 results that beat on EPS but missed on revenue by about 1% even with 54% Y/Y revenue growth. FY19 guidance has revenue from 375B to 383B yuan (consensus: 395.75B yuan), a 4% to 6% adjustment from the original revenue guide as pressure from the US-China trade war continues.
     
     
  • Revenue breakdown: Core Commerce, USD10.6B (+56% Y/Y); Digital Media and Entertainment, USD865M (+24%); Innovation Initiatives and Others, USD155M (+20%). 
     
     
  • Annual active buyers numbered 601M (consensus: 576M). Mobile MAU totaled 666M (consensus: 634M).
     
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P H
Nov 03,2018 07:52:14

  • Alibaba (US:BABA) gains 4.6% on Q2 results that beat on EPS but missed on revenue by about 1% even with 54% Y/Y revenue growth. FY19 guidance has revenue from 375B to 383B yuan (consensus: 395.75B yuan), a 4% to 6% adjustment from the original revenue guide as pressure from the US-China trade war continues.
     
  • Revenue breakdown: Core Commerce, $10.6B (+56% Y/Y); Digital Media and Entertainment, $865M (+24%); Innovation Initiatives and Others, $155M (+20%). 
     
  • Annual active buyers numbered 601M (consensus: 576M). Mobile MAU totaled 666M (consensus: 634M). 
     

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P H
Nov 03,2018 07:44:50

While uncertainty about China and global macro conditions continue to weigh on wide-moat Alibaba (US:BABA), second-quarter revenue growth of 54% reinforces the resiliency of the firm's business model, regardless of economic backdrop. Share price appreciation may be difficult until U.S.-China trade tensions subside, but we believe investors should focus on three positives from the quarter.

First, Alibaba has developed a sensible game plan for difficult macro conditions, including the temporary suspension of certain merchant fees on its Taobao platform. While we appreciate investor concerns about this decision--the fee suspension will negatively affect Alibaba's higher-margin core commerce platform--our research has shown that economic downturns have historically offered e-commerce platforms an opportunity to lock in new buyers and sellers, both of which then engage in other higher-margin products and services when economic conditions stabilize. We expect a similar scenario to play out with Alibaba. Second, the Chinese consumer is relatively healthy, backed by wage growth, solid household balance sheets, and access to consumer credit. Third, ancillary businesses like the combined Ele.me/Koubei, New Retail/Hema, and cloud computing have shifted Alibaba away from being a consumer discretionary story and offer exposure to more resilient consumer and business staples.

While Alibaba cut its full-year revenue outlook to CNY 375 billion-383 billion (50%-53% growth year over year versus its initial outlook for 60%) due to fee adjustments, we expect future merchant/user engagement to offset these headwinds, leaving our five-year gross merchandise volume and China retail revenue growth targets of 30% and 38% in place. We plan to cut our fiscal 2019 EBITDA margin forecast to the mid-20s but still see long-term targets in the low to mid-30s as valid. We're not planning changes to our $240 fair value estimate, and we view the shares as attractive for longer-term investors.

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P H
Nov 03,2018 07:44:50

While uncertainty about China and global macro conditions continue to weigh on wide-moat Alibaba (US:BABA), second-quarter revenue growth of 54% reinforces the resiliency of the firm's business model, regardless of economic backdrop. Share price appreciation may be difficult until U.S.-China trade tensions subside, but we believe investors should focus on three positives from the quarter.

First, Alibaba has developed a sensible game plan for difficult macro conditions, including the temporary suspension of certain merchant fees on its Taobao platform. While we appreciate investor concerns about this decision--the fee suspension will negatively affect Alibaba's higher-margin core commerce platform--our research has shown that economic downturns have historically offered e-commerce platforms an opportunity to lock in new buyers and sellers, both of which then engage in other higher-margin products and services when economic conditions stabilize. We expect a similar scenario to play out with Alibaba. Second, the Chinese consumer is relatively healthy, backed by wage growth, solid household balance sheets, and access to consumer credit. Third, ancillary businesses like the combined Ele.me/Koubei, New Retail/Hema, and cloud computing have shifted Alibaba away from being a consumer discretionary story and offer exposure to more resilient consumer and business staples.

While Alibaba cut its full-year revenue outlook to CNY 375 billion-383 billion (50%-53% growth year over year versus its initial outlook for 60%) due to fee adjustments, we expect future merchant/user engagement to offset these headwinds, leaving our five-year gross merchandise volume and China retail revenue growth targets of 30% and 38% in place. We plan to cut our fiscal 2019 EBITDA margin forecast to the mid-20s but still see long-term targets in the low to mid-30s as valid. We're not planning changes to our $240 fair value estimate, and we view the shares as attractive for longer-term investors.

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P H
Jun 07,2016 13:41:40
Asia in Transition – New Economy Pushing Ahead in a Stop-Go World

With China’s old economy sectors decelerating but domestic-demand, service-sector led new economy expanding, we see the economy progressing on a dual speed path and continue to advocate switching from old to new economy sectors. That said, Bank of Singapore Economic Team believes it remains a huge challenge for China to transition quickly enough to grow out of the credit bubble. Hence a continued “Stop-Go” policy approach is likely, swinging from short-term stimulus when activity starts to stall to fading support and reforms emphasis when economic growth picks up. Near-term sentiments could remain cautious with unclear policy direction following recent conflicting statements from different policy makers. Within the “new economy” universe, we like consumption and service related sectors including internet, insurance, telecoms, gaming and autos. New energy/environmental is also a preferred sector with strong policy support for environment protection. Our preferred picks include Alibaba (US:BABA), Ctrip (US:CTRP), Ping An Insurance (HK:2318), China Mobile (HK:0941), Sands China (HK:1928), Brilliance China (HK:1114) and Beijing Enterprises Water (HK:0371).
Bull
P H
Jun 07,2016 13:41:39
Asia in Transition – New Economy Pushing Ahead in a Stop-Go World

With China’s old economy sectors decelerating but domestic-demand, service-sector led new economy expanding, we see the economy progressing on a dual speed path and continue to advocate switching from old to new economy sectors. That said, Bank of Singapore Economic Team believes it remains a huge challenge for China to transition quickly enough to grow out of the credit bubble. Hence a continued “Stop-Go” policy approach is likely, swinging from short-term stimulus when activity starts to stall to fading support and reforms emphasis when economic growth picks up. Near-term sentiments could remain cautious with unclear policy direction following recent conflicting statements from different policy makers. Within the “new economy” universe, we like consumption and service related sectors including internet, insurance, telecoms, gaming and autos. New energy/environmental is also a preferred sector with strong policy support for environment protection. Our preferred picks include Alibaba (US:BABA), Ctrip (US:CTRP), Ping An Insurance (HK:2318), China Mobile (HK:0941), Sands China (HK:1928), Brilliance China (HK:1114) and Beijing Enterprises Water (HK:0371).
Bull
P H
Apr 18,2016 00:10:37
Alibaba is buying a controlling stake in Lazada for US$1bn
 
Comprising a mix of old and new Lazada shares in a deal which values Lazada at US$1.5bn. Alibaba has the right to buy out additional shares from existing shareholders over in 12-18 months.
Comment: This deal likely to have positive impact for businesses along the value chain, e.g. logistic, transportation, etc. However, competition will remain tough in the sector and may accelerate consolidation in the space.
 
- From Logistic & Transportation side - This provide a much needed boost for SingPost, which Alibaba owns an 11% stake. Singpost has been struggling to penetrate Indonesia especially in the last-mile delivery segment. Alibaba-lazada deal could provide an entry point for Singpost. This means a tougher competition ahead for the likes of JNE, Pos Indonesia and other logistic players because Singpost has the know how expertise and big funding to expand compare to the existing players.
 
- This deal also read positively for Lazada’s warehouse providers, Mega Manunggal Property – MMLP. This deal will strengthen Lazada’s financial position which in turn should enable Lazada to be able to expand more aggressively that likely lead to more demand for warehouse space.
 
- However, competition in the e-commerce will continue to intensify. Given the big warchest, we may see consolidation in Indonesia’s e-commerce segment sooner later than later. In addition, offline retailers will also continue to see disruption especially in the electronics and fashion department.
Bull
Quotes delayed, except where indicated otherwise.
BABA
187.22 2.33 (1.26%)
Alibaba Group Holding Limited A
Last Update 02:54:10