In this file:
· Alibaba struggles to follow Amazon beyond e-commerce
· The Bigger Picture Looks Murky for Alibaba Stock
· Why Alibaba Stock Jumped 23% in January
Alibaba struggles to follow Amazon beyond e-commerce
New CEO under pressure to cultivate cloud and physical retail businesses
Naoki Matsuda and Mariko Hirano, Nikkei Asian Review
February 05, 2019
SHANGHAI/NEW YORK -- Alibaba Group Holding built its empire on China's e-commerce market, but the company is laboring to end its reliance on online sales as the economy teeters by following Amazon's lead into cloud services.
"I always check Alibaba first to check prices or see what is popular now," said Li Mei, a 28-year-old woman in Shanghai. For her, like many Chinese, a life without Alibaba is unimaginable. The e-commerce websites now draw more than 600 million users per year.
Alibaba guides prices and trends in China, much like Amazon.com in the U.S. Although both companies are the most recognizable e-commerce brands in their home countries, they have entirely different profit structures.
Looking at results from the October-December quarter, Amazon has an overwhelming lead in sales. Alibaba, however, is far more profitable, with a net profit margin of 28% compared to just 4% for Amazon.
Alibaba's e-commerce business largely consists of virtual stores from other companies on its Taobao and Tmall marketplaces, and it receives fees from those sellers. So, unlike Amazon, Alibaba has not invested heavily.
Their distribution models are also polar opposites. Alibaba outsources most of its logistics to curb costs, while Amazon builds its own warehouses.
Despite such high profitability, Alibaba has begun to sense an impending threat from its heavy reliance on the domestic e-commerce business...
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The Bigger Picture Looks Murky for Alibaba Stock
BABA stock is facing multiple, steep risks
By Will Ashworth, InvestorPlace
Feb 4, 2019
Alibaba (NYSE:BABA) announced its third-quarter earnings on Jan. 30. Investors liked what they heard, as they sent BABA stock up almost 7% on the day.
BABA climbed even though Chinese stocks had a horrible day, as 20 of the country’s companies warned that their full-year earnings wouldn’t be nearly as good as they had initially thought.
Before getting into some of the finer points of the report and what investors should do with BABA stock, I think it makes sense to answer a fundamental question: Should investors even be considering Chinese stocks at this point in the game?
China’s Micro and Macro Outlooks Are Both Bad ...
The Elephant in the Room With BABA Stock ...
The Quarter’s Niceties ...
The Bottom Line on BABA Stock ...
Why Alibaba Stock Jumped 23% in January
Shares of the Chinese tech giant soared on a strong earnings report and a recovery in Chinese stocks.
Jeremy Bowman, The Motley Fool
Feb 4, 2019
Shares of Alibaba (NYSE:BABA) were moving higher last month after the Chinese e-commerce giant gained alongside other Chinese stocks on signs that trade talks between China and the U.S. could yield a desirable compromise and as the tech giant turned in a strong third-quarter earnings report at the end of the month.
According to data from S&P Global Market Intelligence, the stock finished the month up 23%. As you can see from the chart below, the stock increased steadily over the course of the month as Chinese stocks broadly rose, and jumped at the end of the month after its earnings report.
After getting battered last year, Chinese stocks got off to a good start this year as the Shanghai Composite is up 5% year to date. E-commerce stocks like Alibaba, JD.com, and Baozun are doing even better, up around 20% since the start of the year, as they've benefited from the shift in investor sentiment. Despite data that showed Chinese economic growth slowing, investors were encouraged by apparent progress in trade negotiations between China and the U.S., though no deal has yet been reached.
Alibaba confirmed that upbeat assessment with strong third-quarter results. The e-commerce marketplace said revenue was up 41% to $17.1 billion. Though that was slightly below estimates, analysts were pleasantly surprised by the bottom-line figure, as adjusted earnings per share rose 15% to $1.77, ahead of expectations at $1.67.
Its cloud-computing segment posted 84% revenue growth, while its innovation initiatives showed off 73% revenue growth, a sign that the company is replacing slowing growth in its core e-commerce business.
CEO Daniel Zhang said, "Alibaba had another strong quarter. Our resilient operating and financial performance is a direct reflection of our persistent focus on better serving our growing base of nearly 700 million consumers across retail, digital entertainment and local consumer services."
Now what ...
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