BABA has increasing estimates for revenue, but the stock keeps going down. Alibaba is a massively profitable & diverse e-commerce giant, expected to grow more than 30% this year. Meanwhile, the stock is historically and comparatively undervalued. BABA is basically a massively undervalued Chinese Amazon with improving fundamentals and a decreasing stock price. Despite the Evergrande default situation, China is expected to surpass the US in terms of GDP, middle class growing fast. Investing is all about risk to reward.
BABA has increasing estimates for revenue, but the stock keeps going down. Alibaba is a massively profitable & diverse e-commerce giant, expected to grow more than 30% this year. Meanwhile, the stock is historically and comparatively undervalued. BABA is basically a massively undervalued Chinese Amazon with improving fundamentals and a decreasing stock price. Despite the Evergrande default situation, China is expected to surpass the US in terms of GDP, middle class growing fast. Investing is all about risk to reward.
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- Digital media and entertainment (4% of rev) : Alibaba pictures, music and video platform - Cloud computing (8% of rev) : Fastest growing segment, data storing, analytics, machine learning, security management. 4th largest in the world, behind AWS, Azure & Google. China's Cloud market grew 55% yoy in Q1 2021 to over 6B US. BABA needs to watch out for Huawai which is growing at a much faster rate & snatching market share. If we look at AWS (Amazon), their segment went from 3B in 2013, to over 45B in 2020, to over 52B in the last 12 months. - Core commerce (87% of rev) : Like the Amazon of China, B2C and B2B too Risks - From US: Sentiment, delisting, ADR (no direct ownership in BABA if you buy) - From China: Fines and regulation, gov tries to slow down growth, access to data, risk that they ban US relations, ex: 2.8B fine last year, what will they do? unknown... Reminder that investing in BABA is not investing in the Chinese gov. One is a productive company doing business, the other is the gov. Delisting from China 👉 would indicate to the international community that China doesn't want to do international business with other countries. That is not necessarily in their best interest - Risks of fraud are VERY low in my opinion. China is against fraud too. - Decreasing Net Income, Adjusted EBITDA and FCF yoy : Only temporary, impacted by 2.8B fine which half was settled in Q2. Business fundamentals still healthy. #BABA #Alibaba
