William_Potter/iStock via Getty Images Thesis Summary Alibaba Group Holding Limited (NYSE:BABA) continues to trade near all-time lows, but it has seen a nice rally, followed by a bit of a pull-back in the last month. In the last few weeks, many famed investors and large hedge funds have disclosed opening positions in Alibaba and other Chinese stocks. Most importantly, though, there have been various reports that the CCP is going to further support the economy and specifically the housing market. It seems to ...

Chinese stocks don’t always have the best reputation among American traders. While these businesses can often hold sound theses and financials, the wildcard of potential government intervention or macroeconomic concerns can easily throw off your entire investment rationale. Risks mount up compared to other foreign companies With so much uncertainty, undervalued Chinese stocks are considered riskier trades.Over the past few years, Chinese stocks have been decimated. A regulatory crackdown by the CCP in Novem ...

maybefalse/iStock Unreleased via Getty Images Alibaba (NYSE:BABA) (OTCPK:BABAF) stock has failed to show a strong bullish momentum over the last few quarters. Despite the rock-bottom valuation, the stock has failed to impress Wall Street. The recent quarterly earnings show a possible silver lining which can turn the sentiment toward the stock. In the recent quarter, Alibaba reported 45% YoY revenue growth in its International Digital Commerce Group. The revenue increased from RMB 18.9 billion in the yea ...

If you’re hesitant to buy stocks while broader stock markets are close to all-time highs, perhaps consider buying stocks abroad. At this juncture, Chinese stocks are becoming a temptation from a valuation perspective.Some Chinese internet giants are fresh off one of their worst multi-year spills in recent memory. And though the names may not be timely, it’s tough to pass some bruised stocks, if you seek deep discounts on firms that are capable of high double-digit percentage growth over time.Of course, inve ...

Alibaba (NYSE:BABA) stock is a hot topic on Tuesday after the Chinese e-commerce giant announced David Beckham as its newest brand ambassador.This has the retired soccer star acting as a global brand ambassador for AliExpress. That will have him acting as the face of the company’s “Score More with AliExpress” advertising campaign.As part of this, AliExpress is sponsoring the UEFA Euro 2024, which starts on June 1. This comes with a special promotion from June 14 to July 14 where users of its mobile app can ...

Finding good companies with significant growth potential is the holy grail of stock investing for investors. Making a fortune come 2028, these companies invest in many sectors, such as technology, semiconductors, and retail, offering very lucrative investment opportunities.The first one here is a huge name in the semiconductor industry that is currently making its global foray through strategic partnerships with a few other big players. The company positions itself on the market’s growth, considering cuttin ...

Core Viewpoint - Many Chinese stocks are regaining momentum after previous setbacks, indicating potential investment opportunities despite past financial shakiness [1] Group 1: Baidu (BIDU) - Baidu is a leading Chinese tech company known for its search engine and is diversifying its revenue through cloud services and AI [2] - In the most recent earnings report, Baidu's revenue increased by 1% year-over-year to $4,365 million, while net income decreased by 6% [2] - Mobile users grew by 3% year-over-year, and cloud services revenue increased by 6% compared to Q1 last year, indicating growth in various departments [3] - Baidu's low valuation and ongoing investments in AI and autonomous driving present a promising opportunity for investors [3] Group 2: Alibaba Group (BABA) - Alibaba is China's largest e-commerce platform with over 900 million active users, currently trading at a low price despite its strong performance [5] - In fiscal 2024, Alibaba reported an 8% increase in revenue and a 9% increase in net income year-over-year, showcasing its resilience [5] - The company initiated a $12.5 billion share buyback in fiscal 2024, signaling confidence in its recovery and growth potential [6] Group 3: JD.com (JD) - JD.com is a significant player in the Chinese e-commerce market, recently reporting a 7% revenue growth year-over-year, indicating a potential turnaround [7] - The company has seen increases in product, logistics, and service revenues, along with improvements in advertising efforts [7] - Despite recent positive results, JD.com still faces challenges and requires investor confidence for a full recovery [8]

Core Viewpoint - Alibaba (BABA) is currently rated as a Zacks Rank 5 (Strong Sell) due to declining earnings estimates despite a recent earnings beat [1]. Company Overview - Alibaba Group Holding is a leading e-commerce giant in China, having evolved from a traditional e-commerce company to a conglomerate with diverse businesses including logistics, food delivery, and cloud computing [2]. Earnings History - The company has a mixed earnings history, with three beats and one miss against the Zacks Consensus Estimate. The latest quarter showed a beat with earnings of $1.40 compared to an expectation of $1.24. However, this performance alone does not justify a strong buy or sell rating [3]. Earnings Estimates - Recent trends indicate a downward revision in earnings estimates for Alibaba. The current year (2024) consensus has decreased from $8.99 to $8.26 over the past 60 days, while the next year's estimate has dropped from $10.10 to $9.17 in the same timeframe. This negative movement in earnings estimates is a key factor contributing to the stock's Zacks Rank of 5 (Strong Sell) [4].

Financial Performance - Net income attributable to ordinary shareholders increased from RMB61,959 million in 2022 to RMB72,509 million in 2023, and further to RMB79,741 million (US$11,044 million) in 2024[393] - Non-GAAP net income attributable to ordinary shareholders for computing non-GAAP diluted earnings per share/ADS was RMB143,515 million in 2022, RMB143,991 million in 2023, and RMB158,359 million (US$21,932 million) in 2024[393] - Free cash flow increased from RMB98,874 million in 2022 to RMB171,663 million in 2023, and slightly decreased to RMB156,210 million (US$21,635 million) in 2024[395] - Total revenue increased by 8% from RMB868,687 million in fiscal year 2023 to RMB941,168 million (US$130,350 million) in fiscal year 2024[396] - Consolidated adjusted EBITA increased by 12% to RMB165,028 million (US$22,856 million) in fiscal year 2024, driven by growth in Taobao and Tmall Group, Cloud Intelligence Group, and other segments[397] Revenue by Business Segment - Revenue from Taobao and Tmall Group increased by 5% to RMB414,414 million (US$57,396 million) in fiscal year 2024, driven by a 4% increase in customer management revenue and a 6% increase in direct sales and others revenue[398] - Cloud Intelligence Group revenue increased by 3% to RMB106,374 million (US$14,733 million) in fiscal year 2024, with adjusted EBITA increasing by 49% to RMB6,121 million (US$848 million)[400][401] - Alibaba International Digital Commerce Group revenue increased by 46% to RMB102,598 million (US$14,210 million) in fiscal year 2024, with international commerce retail revenue growing by 60% to RMB81,654 million (US$11,309 million)[402] - Cainiao Smart Logistics Network Limited revenue increased by 28% to RMB99,020 million (US$13,714 million) in fiscal year 2024[396] - Local Services Group revenue increased by 19% to RMB59,802 million (US$8,282 million) in fiscal year 2024[396] Intellectual Property and R&D - The company has 14,339 issued patents and 12,036 publicly filed patent applications in China, along with 6,047 issued patents and 2,709 publicly filed patent applications globally as of March 31, 2024[495] - The company employs research and development personnel to build its technology platform and develop new online and mobile products, recruiting top talent locally and overseas[494] - The company relies on a combination of trademark, copyright, trade secret protection laws, and patent protection in China and other jurisdictions to protect its intellectual property[495] - The company has advanced training programs designed specifically for new campus hires to develop its technology platform[494] - The company rigorously controls access to its proprietary technology and information through confidentiality and invention assignment agreements with employees[495] Debt and Interest Rate Management - Approximately 35% of the company's total debt carries floating interest rates, while 65% carries fixed interest rates as of March 31, 2024[498] - After interest rate swaps, 33% of the company's total debt carries floating interest rates and 67% carries fixed interest rates as of March 31, 2024[498] - A 1% increase or decrease in interest rates would have resulted in a RMB5,473 million and RMB6,010 million (US$832 million) higher or lower profit attributable to equity owners for the years ending March 31, 2023 and 2024, respectively[499] - The company uses derivatives, such as interest rate swaps, to manage its interest rate exposure and reduce overall cost of debt[497] - The company's interest rate risk is managed with a focus on reducing overall cost of debt and exposure to changes in interest rates[497]

Debt and Interest Rates - As of March 31, 2024, approximately 33% of the company's total debt carries floating interest rates after considering interest rate swaps, while 67% carries fixed interest rates [2053]. - If interest rates increased/decreased by 1%, the profit attributable to equity owners for fiscal years 2023 and 2024 would have been RMB5,473 million and RMB6,010 million (US$832 million) higher/lower, respectively [2054]. - The company manages interest rate exposure with a focus on reducing overall cost of debt and uses derivatives like interest rate swaps when appropriate [2071]. Cash and Investments - The company had RMB381,326 million and US$30,166 million in cash and cash equivalents, short-term investments, and other treasury investments as of March 31, 2024 [2056]. - As of March 31, 2023, the company had RMB351,195 million and US$29,171 million in cash and cash equivalents, short-term investments, and other treasury investments [2074]. Foreign Currency and Market Risks - If the Renminbi depreciated by 10% against the U.S. dollar, the balance in U.S. dollar would have been US$78,178 million [2056]. - Foreign currency risk arises from future commercial transactions and recognized assets and liabilities, with most revenue-generating transactions denominated in Renminbi [2073]. - The company is not exposed to commodity price risk and primarily faces market price risk with respect to publicly traded equity securities [2075]. - If the market price of financial instruments held by the company had been 1% higher/lower, the instruments would have been approximately RMB1,233 million and RMB762 million (US$106 million) higher/lower, respectively [2057].