A lot of great information on BABA, score 3.7/5
Detailed study (Study_of_BABA_Dec_2017)
Spin off Alipay is one of the main reason investors want to own BABA. So eiethr at the end of 2018 or 1st half of 2019, Ant’s IPO will start. It is good to buy before this IPO.
According to one banker, Ant’s IPO has been pushed back to late 2018 or the first half of the following year because of the need to secure regulatory approval and to focus on building the business.
Alibaba later settled with Yahoo and SoftBank, the Japanese technology group that is its other major shareholder. The agreement guarantees Alibaba 37.5 per cent of the total equity value of Alipay or a payment of at least $2bn and up to $6bn, if the spun-off company goes public or another “liquidity event” takes place.
It also requires Alipay to pay Alibaba royalties for software services and 49.9 per cent of its consolidated pre-tax income, and it must continue to service Taobao, the group’s consumer ecommerce unit and other group businesses, under preferential terms.
- First, they call it the “category killer” in China ecommerce, with its two core retail platforms, Taobao and Tmall, claiming 75% market share in China, which is bigger than the U.S. and much less penetrated.
- Secondly, they write that its advertising business will certainly ramp up, given that at the moment monetization is quite low, and Alibaba has “unmatched” user data that can be used for personalization and targeting. “We model Taobao and Tmall ad revenue growth of 45% for fiscal 2018 (decelerating three points from fiscal 2017) and 30% for fiscal 2019 with upside as likely.”
- Their third point is that Alibaba recently bought leading Southeast Asia e-commerce platform Lazada, heralding a boost in its business in other nations–to the point that they estimate 78% year-over-year growth for its international retail segment next year.
- Fourth is Alibaba’s digital media strategy, with its valuable assets UCweb (the #1 mobile browser for one-third of the world’s population, they write) and Youku (which is often called the Netflix (NFLX) of China), which should bring new users and keep them in the ecosystem, while providing new opportunities for monetization.
- Fifth on their list is Alicloud, which already has a 40% market share in Chin’a public cloud, despite being about half a decade behind Amazon’s (AMZN) AWS in scaling.
- sixth and final point–that Alibaba can grow revenue more than 40%, with margins of 40% or more over time, making it “the best way to play the secular growth of the Internet in China,” with a multiple that should expand to match.
- videos of BABA