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BABA

Alibaba | Fundamental Analysis + Next target 🔔Chinese e-commerce behemoth Alibaba Group Holding has become one of the top investment trends of 2021. Over the past year, the company's stock has dropped more than 50% of its value, almost inaudible for a company of this size and status. The stock recently rebounded 15% from its 52-week lows, and investors are curious if the drama is over. And today's review will tell you just why you should be cautious about returning to the Alibaba rollercoaster. The most interesting thing about Alibaba's troubled year is that it has scarcely anything to do with real business. It is the powerful e-commerce business in China's vast economy, and nearly 1.2 billion people worldwide have used its services in the past year. BABA posted revenues of $31.8 billion in its most recent quarter ended June 30, up 34% from the pandemic peak in mid-2020. The business is undoubtedly effective and brings a lot of free cash flow: $3.2 billion per quarter, or 10% of revenue. Over the past year, the Chinese government has taken a decisive stance and has become more active in intervening in large Chinese technology companies. Chinese President Xi Jinping has stressed the need to distribute wealth from large corporations to the Chinese population through social programs, infrastructure, etc. He is putting pressure on dominant Chinese technology companies because China has the regulatory authority to advance them with antitrust lawsuits. Chinese regulators have already fined Alibaba $2.5 billion in antitrust investigations. Perhaps, as a result of this pressure, Alibaba has agreed to donate 100 billion yuan ($15.5 billion) over the next five years to social needs. Given the company's free cash flow of $3.2 billion last quarter, this is a meaningful figure. That's less cash to invest in business development and less money for the company's shareholders. In late 2020, Chinese regulators blocked an initial public offering by Chinese fintech company Ant Group, which would have valued the company at about $300 billion. Like Alibaba, Ant Group is another business headed by Jack Ma and owns China's largest digital payments platform. Regulators have forced Ant Group to restructure its business to comply with Chinese regulations, separating its Alipay platform from its lending business and sharing ownership of its newly created customer data business with the Chinese government. This definitely turns Ant Group into a bank and gives the Chinese state access to Ant Group's consumer data, the "secret sauce" of the business. Alibaba owns a third of Ant Group, and the halt of its IPO is a value-destroying event that probably played a role in Alibaba's stock decline. China creates political problems for Alibaba and similar technology companies that are hard for investors to predict. What happens if the Chinese government decides to take more funds from tech companies? What if regulations become even stricter? Investors have little ability to assess these risks. As a result, Alibaba's stock is selling off as investors try to factor in these risks. Analysts forecast revenues of $140 billion for the entire fiscal year 2022 (the calendar year 2021), resulting in a stock price-to-sales (P/S) ratio of just over 3. Before the pandemic, the stock was trading at a P/S ratio of 10, so it's obvious how much the stock price has declined while the core business keeps expanding. If we go back even further, to three years ago, the P/S of the stock was 15. In other words, the stock's valuation has declined 80% over the past few years. Wow! Right? Let's compare Alibaba to Amazon, a similar company: an e-commerce giant with additional segments like cloud services. Amazon's P/S has never surpassed 5 in the last five years, meaning that at the peak of the P/S ratio Alibaba was valued at five times the price of Amazon stock. Amazon's P/S is currently 3.4, which is only 10% higher than Alibaba's, which may be fair since they are very similar. Alibaba is smaller and may grow a little faster, but then you have to consider the political risks and the company's huge donations to China's social programs. So it would be logical to argue that Alibaba should trade at a discount to Amazon, as it does now. But if you want to absolve doubts about Alibaba, it would still be difficult to justify a significant premium over Amazon's price. It may turn out that Alibaba has been expensive for years and that much of the fall was due to the stock coming to a more adequate valuation, rather than the fall being a once-in-a-lifetime buying opportunity, as some investors think. This means that Alibaba does not have as many prospects as it appears at first glance, and so investors might think twice before grasping Alibaba's recent bounce.
NYSE:BABALong
by FOREXN1
2
China: Where is the bottom? Let's look at Tencent Some reasons why we're probably near a bottom with Chinese equities, +/- 10-20% 1) Since 2013, price has consistently respected the trendline - no different than a standard demand curve in economics. Trendlines are demand for price over a period of time and they work best when price revisits them often and shown to bounce after. 2) We also have the 200 week moving average that supported price during the correction of 2018 (President Donald Trump's trade war with China & the slowdown in global economic growth / concern that the Fed was raising interest rates too quickly) - The 200wma also supported price during the Covid meltdown of 2020. 3) 2018 and 2020 resistance is now structure support + notice the gap that was just recently filled during yesterday's waterfall decline. 4) Tencent has retraced about 76% from the former impulse low to high, which is a standard deep retest in a correction (61.8% - 76% on the deeper end). 5) FXI is the Chinese large cap ETF - notice it hit the 200 Month moving average and bounced. You could see that here: No position yet, but may be interested in LEAPS. Easier trades out there IMO... but if holding, this is definitely not a place to sell. Expect chop and time to base. V shape recovery is also possible here (but unlikely in my view due to sentiment damage and headline risk). GL
OTC:TCEHY
by Lanmar
7
$FB $SQ $BA $BABA I OptionsSwing WatchlistFB 2H I Watching FB for a breakout from this downtrend. Its trading nearly 15% down from ATH levels, after beating last ER. Reports on earnings on 10/25 AMC. SQ 4H I SQ dipped last week to later recover and hit our pt at $250. The SQ $245c 10/08 calls we highlighted went from $2.87 to $7.35! Expecting a pullback to $230 now. BA 1D I Expecting BA to break the $230 level and head to $250 before earnings on 10/27. Bullish activity has been betting on a breakout from this downtrend. BABA 1D I BABA is finally bouncing and running up into earnings on 11/04. Its up 12% from our entry last week and we expect BABA to hit $175 before earnings.
NASDAQ:METALong
by optionsswing
2
Broken Correlation Amazon/Alibaba, only an Evergrande thing?Alibaba is off the road... looks like total crash, like Bayer after the Monsanto deal... But Alibaba got no endless billion dollar legal proceedings! Alibaba got a protected billionen chinese market plus a growing part of the world.... The problems with the allmighty Xi Jingping dont making so much noise... The user data part is under political control, so the ecommerece part can go on First thing I'm thinking about is the chinese real estate crisis. But the correlation between Amazon and Alibaba disconnected in june... in My mind the Evergrande thing came to late. Please let me hear your opinion... Im totaly new to this game. Its so amazing! :-D Going Long, Its a temporary thing... Ali ist lower then march '20 and the world wont stop because of Evergrande or so...
CAPITALCOM:BABALong
by FlorianMN
Do we Really still need a Degree to earn a Living ?Yesterday, the 2nd day of CNY and we were celebrating with our friends here in SG. Around evening, we ordered food online but they failed to deliver the food to my friend's place. We contacted the HQ and they said after trying to reach the driver several times, they had no choice but to refund us the money. But the app said food has been picked up and DELIVERED but the latter was not true else we would not need to go out to buy food from a nearby mall. Anyway, I asked my friend and he explained this had happened a few times. Because these drivers earn by per trip so the more trips they made a day, the more they earned. Probably, the driver misjudged the distance and took my friend's order and decided not to deliver the food. We don't know but we hope he is fine. On my way home, I thought hard about this industry and can't help feeling amazed how a food delivery business can change the lives of so many people globally, especially in China. Read this article here . When you can make an average income of 7000 RMB per month if you really put in the long hours. Who will need a degree these days ? And with technology affecting so many parts of our lives, who is to say what trend will we be seeing in 3-5 years time let alone 10 years ?
HKEX:9988Long
by dchua1969
3
BABA - HUGE OPTIONS PLAY - FALLING WEDGE + CHANNELAll, BABA is PRIMED here. Just a question of has it hit bottom. I would wait for break or daily candles conformation personally, but then i'd be all in here. This should break the falling wedge and hit the top of the downtrend channel. Huge plays here. This should take more of your attention than any small cap etc stocks. Make sure to set many alerts on this. Telling you this is worth big returns could see 180-200 by end of 2021. Especially holidays nearing etc.
NYSE:BABALong
by DigitalData
2
We will wait before taking action on Chinese Stocks. Today we will take a look at BABA. When do we think maybe a good moment to start adding Chinese stocks into our portfolio? Of course, we will look at the answer from a technical perspective, and this is the conclusion we make: a) We must see contact with the support level first (Is there buying pressure?) b) If we see bullish pressure, that is the first sign those big investors may be adding again. c) Ok, that's the first filter; the second filter is the breakout of the descending trendline. That would mean a change in behavior or sentiment. Now the price can stabilize and avoid the previous decreasing angle in price. d) Cool, can I buy it now? You can buy whenever you want; however, we will not do that; we want to see our 3rd filter. Corrective Pattern after the contact on the support level + breakout of the descending trendline. It's pretty standard after we observer a breakout of a key level (in this case, the descending trendline), a lot of FOMO comes to the market. "Chinese Stocks are booming! I will not miss this..." And most of the time, those traders or investors get trapped on a correction. e) So if all the previous filters happen, we will develop long setups on BABA. f) Patience is key when looking for quality setups; you can't ask the market for opportunities; you need to wait until the market provides one. Thanks for reading!
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NYSE:BABA
by ThinkingAntsOk
55