|Bid||0.0000 x 0|
|Ask||0.0000 x 0|
|Day's range||1.0700 - 1.0700|
|52-week range||1.0200 - 1.7100|
|Beta (5Y monthly)||0.50|
|PE ratio (TTM)||23.78|
|Forward dividend & yield||N/A (N/A)|
|Ex-dividend date||23 May 2019|
|1y target est||N/A|
(Bloomberg) -- Alibaba Group Holding Ltd.’s revenue grew at its slowest pace on record for a September quarter, underscoring how the e-commerce giant’s post-pandemic rebound is starting to plateau.Asia’s largest corporation reported a 30% rise in sales in the September quarter, in line with expectations but down a tad from the previous three months. That did little to reassure investors worried about the tightening regulatory scrutiny that forced Jack Ma’s Ant Group Co. to call off its $35 billion IPO. Chief Executive Officer Daniel Zhang would only say it’s evaluating the impact on its business from more stringent rules governing its 32%-owned sister company.Alibaba’s shares sank as much as 4.3% in early Hong Kong trading, extending a volatile streak that began with a selloff of more than $60 billion earlier this week. The company enjoys a close relationship with Ant, whose Alipay mobile wallet anchors the majority of Alibaba’s e-commerce transactions and whose microlending services drive consumption. In response to a question about the extent to which Ant loans lead to online shopping, executives said the company doesn’t quantify that traffic.“As Ant Group’s major shareholder, Alibaba is actively evaluating the impact on our business in response to the recently proposed changes in the fintech regulatory environment, and will take appropriate measures accordingly,” Zhang told analysts on a conference call.Read more: Inside the Chaotic Unraveling of Jack Ma’s $35 Billion IPOAlibaba booked almost 4.7 billion yuan of profit from Ant in the September quarter, a big chunk of its overall bottom line. The e-commerce giant reported revenue for the three months ended September of 155.1 billion yuan ($23.4 billion), meeting the 154.8 billion yuan average of estimates. Profit fell 60% to 28.8 billion yuan from a year earlier, when it booked a one-time gain from the acquisition of its stake in Ant.Alibaba had benefited from stronger sales in its home market, which had led the global recovery from Covid-19. Gross domestic product grew 4.9% last quarter, making China the world’s only major growth engine. The e-commerce titan is banking on more than a quarter of a million brands, increased discounting and technologies like livestreamed selling to draw consumers to its annual blockbuster Single’s Day shopping festival, which culminates next week.“The performance of Singles Day might be a more important benchmark to look at, rather than the third quarter result,” said Steven Zhu, an analyst with Pacific Epoch. “E-commerce is the only sector that will actually benefit from coronavirus, simply due to the fact that a lot of normal consumption is shifted from offline to online.”Click here for a live blog on the numbers.Read more: Magic Johnson Selling Gels Shows Why Alibaba Escaped TrumpAlibaba’s shares have gained more than 60% from their Covid-19-era lows in March and touched a record high in October when Ant priced its IPO. Retail and institutional investors had flocked to the record $35 billion-plus IPO, betting that Ant will overcome high valuations, regulatory headwinds and rising competition to reshape the future of global finance.Excluding the Covid-hit March quarter, the 29% increase in Alibaba’s core commerce business was the slowest in more than five years as consumers put off purchases ahead of Single’s Day. The closely watched customer management revenue for China commerce rose 20% in the quarter. Core commerce should expand at a compound annual growth rate of 23% from 2021 to 2023, CGS-CIMB analysts including Lei Yang wrote.What Bloomberg Intelligence SaysAlibaba may continue to benefit from accelerated user and merchant adoption of online grocery shopping, cloud computing and remote-work applications, driven by China’s Covid-19 outbreak. Its domestic retail marketplaces have fully recovered from the pandemic. Longer-term sales and profit growth could be driven by global expansion and the monetization of newer business segments such as logistics, media and entertainment.\-- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.Revenue for Alibaba’s cloud division jumped 60% in the quarter, driven by demand from customers in the internet, finance and retail industries. The unit is forecast to turn profitable for the first time ever in the year ending March, a target that was reiterated by Chief Financial Officer Maggie Wu on Thursday. That will be a milestone for the decade-old business, which competes with the likes of Amazon Web Services, Microsoft Corp. and Google globally and is fending off upstarts like Tencent Holdings Ltd. at home.Alibaba is keeping up a steady pace of acquisitions to drive growth. The company teamed up with Richemont to jointly invest $1.1 billion in luxury e-commerce retailer Farfetch Ltd. to tap on the burgeoning demand for highend foreign goods among China’s middle class, according to a statement Thursday. President Xi Jinping said on Wednesday the country may import more than $22 trillion worth of products over the next decade.In October, Alibaba also agreed to take a stake in Swiss duty-free giant Dufry AG, a move that Zhang said would be a “very important step” in helping the company grow its retail travel business as China develops domestic free trade ports. And to capitalize on the boom in online groceries, it last month paid about $3.6 billion to double its stake in Sun Art Retail Group Ltd., taking control of one of China’s largest hypermarts to try and fend off rivals like JD.com Inc., upstart Pinduoduo Inc. and Tencent-backed Meituan.Read more: Magic Johnson Selling Gels Shows U.S. Brands Flocking to Alibaba(Updates with investments in 12th 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) -- Alibaba Group Holding Ltd. will invest about $3.6 billion to double its stake in Sun Art Retail Group Ltd., taking control of China’s largest chain of hypermarts to try and fend off rivals like JD.com Inc. in e-commerce’s hottest growth arena.Alibaba will raise its direct and indirect stake in the grocery chain to about 72% by acquiring equity from Auchan Retail International SA, then make a general offer to shareholders to buy out the rest of Sun Art. The latter’s Hong Kong-listed stock leapt as much as 30% Monday, its biggest intraday gain since 2011. Alibaba gained as much as 1.8% to touch an intraday record.The deal signals the intention of Asia’s most valuable corporation to accelerate an effort to dominate one of Chinese e-commerce’s largest untapped frontiers. Alibaba Chief Executive Officer Daniel Zhang has made expansion into physical retail and the grocery business in particular a cornerstone of his growth strategy, an effort that paid off during the coronavirus pandemic. Sun Art already operates hundreds of hypermarkets across China under the Auchan and RT-Mart brands, a massive distribution and storage network that can supplement Alibaba’s own efforts in fresh produce.The Chinese e-commerce giant is now grappling with intensifying competition from the likes of JD, food delivery giant Meituan Dianping and startups such as Tencent Holdings Ltd.-backed Missfresh, all chasing a market for groceries and fresh produce that HSBC expects to grow 2.5 times to 690 billion yuan ($103 billion) by 2022 from 2019. Alibaba was among the pioneers in that arena, announcing in 2017 it would spend about $2.9 billion for a 36% stake of Sun Art.The deal “suggests that the tech giant seeks to further expand its one-hour home grocery delivery services such as Taoxianda, leveraging the grocer’s extensive offline hypermarts across China,” Bloomberg Intelligence analyst Kevin Kim said. “This could capture consumers flocking to online platforms, further induced by Covid-19 early this year, yet may hurt foot-traffic to the grocer’s physical stores.”Read more: Alibaba Touts Post-Virus Rebound While Watching ‘Fluid’ U.S.Read more: New Alibaba Chief Explains Why He Wants to Kill His Own BusinessZhang has been directly involved in the expansion into what the company calls its “new retail” strategy, combining e-commerce with physical stores. He helped launch a startup called Freshippo within Alibaba that aimed to combine a grocery store, a restaurant and a delivery app, a business that’s underpinned an overall new retail division that’s grown into a $12 billion operation, contributing a fifth of total revenue in the June quarter.As Alibaba increases its stake to a majority, Sun Art’s financial statements will be consolidated into the larger company’s. Peter Huang, Sun Art’s CEO, will add the title of chairman for the business.What Bloomberg Intelligence SaysAlibaba’s $3.6 billion investment to raise its stake in Sun Art to 72% from the 36% acquired in 2017 signals the company’s intention to strategically ramp up its supermarket retail services. The acquisition should boost its Taoxianda and Tmall Supermarket and help compete against JD.com, Meituan and Pinduoduo, which are also aggressively trying to push into fresh produce e-commerce.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.The online groceries segment has leapt to the forefront during Covid-19 when shoppers shunned restaurants and physical stores, though the industry -- which requires more complex logistical structures such as so-called cold chain storage -- has proven difficult to crack in years past.Alibaba’s initial moves into physical retail were closely followed by WeChat-operator Tencent, which has itself invested in brick-and-mortar chains such as Yonghui Superstores Co. JD now also operates its own thriving groceries business, while Meituan and up-and-comer Pinduoduo Inc. in recent years began investing aggressively in the arena.Sun Art is the industry leader in China’s hypermarkets, operating giant Costco- and Walmart-style stores that sell everything from seafood to wine and furniture under one roof. It held 14% of the market share in 2019, according to global intelligence firm Euromonitor International. Alibaba has also invested in many other brick-and-mortar retailers including Shanghai-listed Sanjiang Shopping Club Co., Shenzhen-listed New Huadu Supercenter Co., and Hong Kong-listed Lianhua Supermarket Holdings Co.Meanwhile, France’s Auchan has become the latest in a slew of foreign retailers to step back from China after struggling in the market. Last year, Carrefour SA sold an 80% stake in its China unit at a discount while German wholesaler Metro AG sold a majority stake in its operations there.Big box offerings are faring better. Costco Wholesale Corp. opened its first outlet in China last year to frenzied crowds and is planning its third store. Walmart Inc. plans to quadruple the number of its members-only warehouse chain Sam’s Club in China to 100 stores over the next eight years, as growth outpaces the company’s separate network of over 400 Walmart stores selling basic groceries.(Updates with Sun Art’s market share in 10th 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.
The e-commerce giant is hoping to further leverage its digital presence to support Sun Art's 481 hypermarkets and three mid-size supermarkets in China. The move comes as Alibaba steadily expands its presence in China's offline retail sector, as growth in traditional e-commerce slows. Alibaba, which already owned 21% of Sun Art through a unit, will raise its stake to around 72% through the acquisition of a similar stake in A-RT Retail Holdings, who owns 51% of Sun Art.