I thought I’d start my own thread for Alibaba, as there didn’t seem to be one here, and yet many forum members’ portfolios appeared to include it. As you can see from the title, I’m interested in Alibaba especially because Alibaba has strong organic growth supporting its revenue development. So where does this organic growth come from? In China, the internet penetration rate is 60%, unlike, for example, in the USA where it’s 89%. When China reaches the same level as the USA or higher, Chinese internet companies will have gained quite a bit of structural growth. Mobile payments, in which Alibaba is involved through Alipay, are also rapidly increasing in China. Based on this, Alibaba’s growth opportunities look quite good domestically, not to mention the growth opportunities abroad. What do you yourselves think about this company? Please share your thoughts so we can get a discussion going.
I myself have read too many negative articles related to Alibaba’s complex corporate structures and accounting to dare to invest.
An old article, but there are many like it…
It might be completely baseless, but I personally don’t dare to take the risk.
If you follow US forums, you’ll surely find all sorts of things.
I’d be a poor man if I believed everything written on the internet.
http://www.barrons.com/articles/alibaba-chanos-covers-short-position-1505241473
As a counterpoint to the article you linked…
There was an Alibaba thread here 
An excellent report from Alibaba, which beat all forecasts, and with its current price, the company, trading at a PE ratio of less than 20, is experiencing massive growth. It will practically double in value within 2-3 years. If you want to get properly into the Chinese market, Alibaba is the shortcut.
Link to the report:
https://seekingalpha.com/pr/17778118-alibaba-group-announces-december-quarter-2019-results
Some key figures compared to the previous year:
- revenue growth 38%
- operating profit growth 48%
- EBITDA grew 37% and EBITA 39%
- net profit >30% of revenue and growth of 62%
in terms of revenue, growth was: - China retail 36%
- Cainiao logistics services 67%
- Cloud grew 62%
This thread was so quiet! Are there any more Alibaba experts or investors on the forum? I’d be very interested in reading some domestic, digested opinions on the company, but the company doesn’t seem to be noted in other media either. Quality English material also seems surprisingly hard to find, though I haven’t really looked much.
Specifically, I’d be interested in hearing the reasons for the low P/E. Is it just that the company isn’t valued higher because it’s Chinese, or are the mentioned risk factors really so serious that the valuation of China’s Amazon is accurate? All of Alibaba’s segments seem to be experiencing nothing but growth and enormous potential (especially in cloud technologies, to my taste). So what’s the catch? Why isn’t this seen as the next Amazon yet?
By the way, I ended up looking for insights and cold facts about Alibaba when I came across the video from the following article on YouTube. I recommend checking it out; it gives a quick overview of the company’s scope.
For some reason, I personally believe that in 100 years, Jack Ma will be a bigger deal for China than the revered Chairman Mao himself. That might be a bit of an exaggeration, but that’s the feeling I have.
I intend to invest half of my money in this once the economic direction is clearer. Specifically, for the very long term, I strongly believe in his vision.
Of course, there’s always a risk. China has reasonably survived the past 15 years of internal conflict. From there, it’s easier to move towards something even bigger.
Being Chinese does have a pretty big impact; the cultural differences are so significant that it’s mostly negative because of them.
Here are a couple of quotes from different internet sources related to this pricing and risks.
Regarding the business itself, during Corona, among local competitors, JD has held its value better, as JD has its supply chain under its own control, unlike Alibaba.
In addition, this article highlighted three points: a) A significant portion of growth (though not the majority) comes from low-margin businesses, b) Local competition is tougher than for, say, Amazon, and c) Tencent is likely to also wedge its way into the cloud sector.
“China risks”
The China vs. US trade war / 5G dispute / Corona blame game certainly creates uncertainty. Furthermore, Luckin Coffee’s recent IPO, which later revealed fictitious revenues, contributes to this. For these reasons, the SEC has warned that it is difficult to reliably assess the figures of Chinese companies. These factors easily shape a situation where risks are deemed greater than profits.
I own Alibaba through ETFs/indices, but not directly in my portfolio.
Could someone wiser explain what this means for Alibaba and other Chinese stocks?
The risk lies with companies that do not meet the requirements.
There is a risk that those who realize they will not meet the requirements will start preparing to delist from the stock exchange and, for example, list on the Hong Kong or Shanghai stock exchange.
Before delisting, they would have to buy back all shares, which is why they usually try to lower the share price as much as possible by all means.
That is the biggest risk for the average investor.
Alibaba and many other Chinese companies have long been listed on the Hong Kong stock exchange as well.
It’s a bit like a backup option for the future, but it would require more similar news like this. At the moment, I don’t think there’s any risk of that.
Jack Ma has been lightening his ownership.
Are some new ventures coming, or is this just part of his transition to a more background role?
Last week, Alibaba’s CEO sent a letter to shareholders, which included long-term goals. No small numbers there 
“Our longer-term goals are to serve 2 billion consumers globally, create 100 million jobs and provide the necessary infrastructure to support 10 million small businesses to become profitable on our platforms by 2036.”
Y/Y
Revenue +34%
EBITDA +30%
And to top it off, Cloud +59%
https://seekingalpha.com/news/3607354-alibaba-eps-beats-0_14-beats-on-revenue
BABA beats by 4.22RMB, reports revs in-line
- down in premarket
Has BABA ever risen after an earnings report, even if it exceeded expectations? Not really.
When you grow 34 percent and miss expectations by a couple of percent, it’s pretty funny to rip headlines from that.
The drop is probably due to Ant Group’s IPO mess. But you’re right, the market has often reacted to Baba’s reports quite neutrally or slightly in the red. It has only risen after a moment of digestion.
Ant Group data came a couple of days ago. Has anything new come today?
The long IPO postponement is today’s news for me
Edit: somehow that link works strangely?
"Ant Group’s initial public offering could be delayed by at least six months and its valuation sharply reduced after Beijing abruptly halted its trading debut this week, people directly involved in the deal and investors said.”
So Alibaba owns one-third of Ant Group, whose estimated market value would have been 150-200 billion? Do you see any future problems with this IPO?
Alibaba’s enterprise value (Yahoo Finance) is currently 792 billion dollars. So there’s a lot of good stuff in the coffers. Growth figures also look good, and they are a clear market leader in China. Have other Alibaba believers been buying today, or are you waiting for it to go even lower?
Someone should use their common sense now; to me, this only looks like a buying opportunity for this company. I’ve been following it for so long!
There’s a real risk that Ant Group’s valuation from a week ago will be wiped out. The supervising authority suddenly changed the lending requirements, and instead of the previous ~2% capital requirement, Ant would need to have 30% capital buffers in its lending. This fundamentally changes the company’s profitability profile, which, of course, must be reflected when determining fair value.