Dominant market share and GMV growth

|

Published 05-MAR-2015 00:00 A.M.

|

2 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.


Click Here to View Latest Articles

Overview: Alibaba Group Holding Limited, through its subsidiaries, operates as an online and mobile commerce company in the People’s Republic of China and internationally. The company also provides pay-for-performance and display marketing services through its Alimama marketing technology platform; Taobao Ad Network and Exchange (TANX), a real-time online advertising exchange in China. The US-listed initial public offering was the largest IPO raising $25bn.

Catalysts: With management focusing on long-term growth profit margins and net cash flow have recently stagnated due to investments and expansion strategies post IPO. Retail Gross merchandise volume (GMV) in the Chinese retail market experienced strong growth and mobile take rates are consistently improving. Whilst less aggressive monetization on PC ads weighs on current performance, all factors combined suggest the company has the potential to transition its strategies in the long-term and maintain its strong market position. The stock has retreated 25% since touching a high in November 2014 which presents us with a buying opportunity.

Hurdles: Whilst management continues to focus on expansions and acquisition, there is no guarantee that the growth strategies will result in value creation. Alibaba operates in a highly competitive industry as marketing costs may disproportionally increase in the hunt for user traffic.

Investment View: Alibaba offers exposure to the Chinese online commerce sector. Whilst current expansion strategies and transition in monetization weighs on the company’s earnings, GMV growth indicates that Alibaba is on track to maintain its strong market position and deliver modest growth. Investors have reduced exposure causing Alibaba to retreat 25% as we initiate coverage with a ‘buy’ recommendation.



General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.

 

Discover Undervalued
Stocks with Wise-Owl

Join thousands of other Investors following our stock commentary for Free

X