Alibaba Group Holding Limited (BABA)
| Previous close | 269.73 |
| Open | 267.57 |
| Bid | 277.02 x 800 |
| Ask | 277.08 x 1400 |
| Day's range | 274.90 - 279.30 |
| 52-week range | 161.68 - 299.00 |
| Volume | 5,622,922 |
| Avg. volume | 14,992,690 |
| Market cap | 741.506B |
| Beta (5Y monthly) | 1.56 |
| PE ratio (TTM) | 79.22 |
| EPS (TTM) | 3.50 |
| Earnings date | 30 Oct 2020 - 03 Nov 2020 |
| Forward dividend & yield | N/A (N/A) |
| Ex-dividend date | N/A |
| 1y target est | 304.23 |
- Bloomberg
Alibaba Expects First Profit From Its Cloud Arm This Year
(Bloomberg) -- Alibaba Group Holding Ltd. foresees its cloud services arm turning profitable for the first time this year, a milestone for the decade-old business that underscores how Asia’s largest corporation expects a return to pre-pandemic levels as China’s economy rebounds.Alibaba’s shares rose 3.8% on Wednesday in Hong Kong, their biggest gain in over a month. Its internet computing business is growing roughly 60% at an annual revenue run rate of about $7 billion, Chief Financial Officer Maggie Wu told investors at an annual company conference. The unit should turn profitable in the year ending March, she said.Cainiao, the logistics service Alibaba folded fully into its broader empire in 2017, should generate positive cash-flow on an operating basis over the same period, she added.China’s most valuable corporation has invested billions in hosting computing for corporations over the cloud, while building a nationwide logistics network that can handle the billions of parcels its e-commerce business throws out. Achieving profitability will boost Alibaba as it tries to revitalize growth alongside a recovery in the broader Chinese economy. The e-commerce giant is riding a pick-up in consumer spending -- particularly online -- in a country among the first to recover from Covid-19.“We typically spend 8 to 10 years incubating, nurturing and growing a new business,” Chief Executive Officer Daniel Zhang told investors. “We still regard ourselves to be in the nascent stage of the global cloud era.”Like Amazon.com Inc.’s, Alibaba’s cloud service emerged from the computational power needed to handle billions of online shopping transactions to become one of its fastest-growing initiatives. The Chinese company today relies on the service, which competes globally with Amazon Web Services, Microsoft Corp. and Google, to underpin both its global expansion and forays into newer arenas such as live-streaming.Read more: Alibaba Touts Post-Virus Rebound While Watching ‘Fluid’ U.S.What Bloomberg Intelligence SaysAlibaba’s announcement at its 2020 Investor Day that its cloud computing business is targeting positive profits in fiscal 2021 could come as a surprise to the market and lift consensus estimates. Alibaba has intentionally kept its cloud segment operating at a small loss in past years in order to gain market share, so the announcement marks a shift in messaging for the segment.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.Alibaba’s cloud business continued to grow during the global Covid-19 shutdowns this year. It held a leading 40.1% share of China’s total cloud infrastructure services spending in the June quarter, more than double its closest competitors, according to industry researcher Canalys. Even as economies start to recover, the company is aiming to take advantage of the shift to upgrade more corporate IT infrastructures to the cloud and boost cloud-based collaboration at work, Zhang told investors Wednesday.Retail sales in the world’s No. 2 economy rose for the first time this year in August, after virus restrictions eased. The comeback in consumer spending has allowed Alibaba to further expand a $700 billion empire that already spans online retail, food delivery and internet computing. It owns a third of Ant Group, the Chinese financial titan pursuing potentially the world’s largest initial public offering, and most recently outlined plans to create a new line of business by modernizing factories.Excluding its stake in Ant, Alibaba’s strategic investments are currently valued at $45 billion, Wu told investors on Wednesday, adding that the company will continue to invest in technology and research. Alibaba last year reported an $83 billion stake in its global portfolio of investments, which included its 33% stake in the fintech behemoth.Zhang -- credited with orchestrating Alibaba’s last big foray into a new arena, with a move into brick-and-mortar retail -- is responding in part to intensifying competition on multiple fronts. Pinduoduo Inc. has lured small-town buyers away with cheaper bargains, while traditional foe JD.com Inc. has ventured beyond its traditional strength in consumer electronics into groceries, a category that leapt to the fore during nationwide lockdowns.Even social media companies like ByteDance Ltd. and Tencent Holdings Ltd. are increasingly reaching out to shoppers through live-streaming -- a route Alibaba pioneered with Taobao Live -- after Covid-19 fueled online entertainment. While rival video apps like Tencent-backed Kuaishou and ByteDance’s Douyin typically directed traffic to Alibaba platforms, they’re now seeking to handle the transactions by themselves.Then there’s sustained competition in food delivery. Alibaba’s Ele.me now directs flowers, housekeepers and masseurs to doorsteps in addition to lunchboxes, while Tencent-backed Meituan Dianping tries its hand on beauty products and smartphones.With more than 1 billion annual active consumers, Alibaba generated over $1 trillion in gross merchandise value in the 12 months ended June, Wu said. Spending on its platforms accounted for about 18% of China’s total retail sales, up from about 10% in 2015.“Domestic consumption, cloud computing and data intelligence, and globalization -- these are the three growth engines for Alibaba’s future,” Zhang said. “Digitalization is the biggest opportunity of our time.”Read more: Chinese Consumers Join Industrial Recovery From Covid-19(Updates share price in second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
Amazon to Take Office Space From Citigroup in Singapore
(Bloomberg) -- Amazon Inc. is planning to take over some of Citigroup Inc.’s office space in Singapore at a time when a number of the e-commerce giant’s Chinese tech rivals expand in the city state.The online retail giant will lease three floors covering about 90,000 square feet (8,360 square meters) at Asia Square Tower 1 in the heart of the financial district, according to people with knowledge of the plans. Staff will move into the new offices early next year, the people said, asking not to be identified because the plans aren’t public.Citigroup, currently the building’s largest tenant with nine floors, is trimming its office space to better use its real estate as its 10-year lease is due to expire soon, the people said.Amazon’s plans in Singapore come as some of China’s biggest tech corporations such as Tencent Holdings Ltd., Alibaba Group Holding Ltd. and ByteDance Ltd. make the island state their beachhead for the rest of Asia. Singapore is becoming a regional base for both Western and Chinese companies because of its developed financial and legal system. It’s becoming more attractive to some as Beijing tightens its grip on Hong Kong.“Amazon is always in a state of innovation and disruption,” said Justin Tang, the head of Asian research at United First Partners in Singapore. “Asia is a source of growth for them and they need to be near where their rivals are.”Job OpeningsAmazon currently has about 200 job openings in Singapore for roles covering data analytics, sales and advertising, business development, marketing and public relations, according to its career site.A representative for Amazon declined to comment. A spokesman for Citigroup confirmed the bank is giving up the space, but declined to say which tenant is taking over. Some consumer banking staff and employees in other functions will relocate to Changi Business Park where the bank has bigger premises and a long-term lease, he said.Amazon, which has been rapidly expanding in Singapore over recent years, has existing offices in Capital Square and One George Street. A lease for the space being taken in Asia Square Tower 1 would typically be for more than five years.Cutting CostsCitigroup is among financial firms around the world that are grappling with what post-pandemic working life will look like, with some companies such as Nomura Holdings Inc. and Fifth Third Bancorp seeing opportunities to cut costly real estate by keeping a portion of staff at home.Although the Singapore government has eased some restrictions around the virus such as allowing more workers to return to the office, remote work is still the default option.Citigroup is reviewing its work spaces due to the virus and looking at other ways of working to allow flexible arrangements, the spokesman said.The bank on Tuesday said it will open its biggest wealth management hub globally in Singapore in December as it aims for double-digit growth in the nation. ‘Citi Wealth Hub at 268 Orchard’ will open with space for more than 300 relationship managers and product specialists.(Updates with comments from analyst in fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
Record $40 Billion Deal for NTT Sparks Talk of Bigger SoftBank Buyout
(Bloomberg) -- The record $40 billion deal for wireless carrier NTT Docomo Inc. is sparking discussion of whether an even bigger Japanese buyout could be in the works: SoftBank Group Corp.Founder Masayoshi Son has debated for years whether to take his conglomerate private because of a persistent discount between his stock and the perceived value of his assets, particularly Alibaba Group Holding Ltd. shares. The 63-year-old billionaire revived informal talks this year after his shares tumbled and he sold off assets.The Docomo deal signals Japan has plenty of capital for deals on the kind of scale unthinkable in the past. Nippon Telegraph & Telephone Corp. will borrow the entire purchase price to finance the affiliate’s buyout, even though it had 1.09 trillion ($10.3 billion) in cash and equivalents at the end of March.“A successful buyout of Docomo could spur a similar move by SoftBank. There is plenty of liquidity for both,” said Justin Tang, head of Asian research at United First Partners in Singapore. “For lenders, this can be a huge source of revenue. And shareholders can have a catalyst in which to realize the value of their holdings.”Son has been frustrated that investors won’t pay more for his stock considering his company’s holdings. SoftBank posts on its website an estimate that its shareholder value is about 13,000 yen a share, a figure it calculates by adding the value of stakes in Alibaba, SoftBank Corp. and other assets, then subtracting debt. That’s roughly half the roughly 6,500 yen a share SoftBank Group trades at.After his shares plummeted in March, Son announced a record 4.5 trillion yen asset sale plan and a record 2.5 trillion yen buyback program. In addition, he’s cut a deal to sell chip designer Arm Ltd. to Nvidia Corp. for about $40 billion in cash and stock, although regulatory approval is expected to take more than a year.“Given SoftBank’s valuation discount and the availability of cheap financing, there is a good chance of an MBO,” said Tang.Goldman Sachs Group Inc. analysts published a research note after the Docomo buyout, arguing the deal is likely to spark further corporate alignments in the country. The report didn’t specifically mention SoftBank.The Docomo deal does present at least two challenges for SoftBank. NTT is buying out public shareholders in part so it can lower wireless rates more easily, a competitive threat that may hurt SoftBank Corp., Son’s domestic telecom unit. Newly anointed Prime Minister Yoshihide Suga has made lower phone tariffs a key part of his early agenda.In addition, NTT is paying 40% more than Docomo’s share price before the announcement. SoftBank shareholders could ask for a similar premium if Son pursues a buyout, according to Bloomberg Intelligence analyst Anthea Lai.SoftBank Group’s market capitalization is about $128 billion, so that kind of premium would mean valuing the company at $179 billion. That would be by far the largest buyout ever.Between the stake held by Son himself and the treasury shares SoftBank has already bought back, more than 30% of the company’s stock is already controlled by management, according to Bloomberg-compiled data.SMBC Nikko Securities Inc. analyst Satoru Kikuchi wrote earlier this month that a management-led deal to take the company private looked feasible.“The firm seems to be selling off assets rapidly and is considering the sale of its ARM holdings earlier than initially planned,” Kikuchi said in a research note. “Given the scale of its buyback operations, we think delisting via management buyout is a possibility.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
