|Bid||200.800 x N/A|
|Ask||201.000 x N/A|
|Day's Range||200.000 - 203.200|
|52 Week Range||167.600 - 227.400|
|Beta (5Y Monthly)||1.60|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
(Bloomberg) -- Meituan Dianping’s shares soared after it reported a smaller than expected 13% slide in revenue that drove hopes the world’s largest meal delivery business is starting to recover as China emerges from Covid-19 lockdowns.Its shares climbed as much as 9.7%, extending strong gains since China began to return to normal in mid-March and propelling Meituan’s market value to more than $100 billion. That surge came after Meituan reported better-than-expected sales of 16.8 billion yuan ($2.4 billion) in the three months ended March. Morgan Stanley and CICC were among the brokerages that lifted their targets on Meituan, citing resilience across business lines and easing competition.Backed by Tencent Holdings Ltd., Meituan’s sprawling services from food delivery to in-store dining and hotel booking were among the most vulnerable to nationwide shutdowns. But its businesses had begun to climb out of the trough, offsetting severe slumps in areas such as hotels, executives told analysts on a Monday conference call. As of March’s final week, more than 70% of restaurants surveyed had recovered more than half their normal order volumes, while 30% had exceeded pre-pandemic levels, Chief Executive Officer Wang Xing said.“COVID-19 had a negative impact on Meituan but results beat on top-line and bottom line by a wide margin,” Bernstein analysts led by David Dai wrote. In food delivery, the “long run potential is still there and the profitability level can be much higher” after the company pushes advertising, they added.Longer term, the internet services giant will have to grapple with China’s worsening economy, which may further dent consumer spending. Subsidies and measures to help restaurants and merchants during the outbreak will again pressure profitability in the June quarter, executives said.Meituan reported a lower-than-projected net loss of 1.58 billion yuan, but that was after three successive quarters of profit.“Looking into the next three quarters, we believe there will still be challenges as there are still uncertainties and potential downside from the ongoing evolution of the COVID-19 situation,” Wang said on the call. “Meanwhile, a large number of local service merchants are still struggling for survival. Short-term profitability is not our top priority.”What Bloomberg Intelligence SaysMeituan’s near-term growth may weaken as its in-store dining, hotel and travel businesses take time to fully recover from China’s coronavirus outbreak. Operating efficiency will likely improve in the longer term as the company expands its market-leading scale and competition with Alibaba moderates. Broadening service categories and providing technology solutions for merchants will aid sales and profit growth.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.Before the outbreak, Meituan had pushed aggressively into adjacent arenas from online travel to ride-hailing. While revenue from the business that encompasses hotels and travel plunged 31% plunge during the March quarter, Meituan’s much smaller new initiatives segment -- which includes bike- and car-hailing -- grew sales 4.9%, aided by the launch of a new grocery delivery service. Hotels remained hardest-hit: in the week of May 11, domestic room nights were at about 70% pre-pandemic levels.While Meituan is expanding offerings to sell things like handsets and farm produce, rivals including Ant Group and SF Express, both backed by Alibaba Group Holding Ltd., are elbowing their way into Meituan’s core takeout business. Alibaba’s food-delivery arm Ele.me is also engaging in a subsidy battle with the startup for market leadership.(Updates with target increases by brokerages 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 Opinion) -- China’s decision to impose a national security law on Hong Kong has spurred speculation of capital flight and an erosion of the city’s status as an international financial center. As a venue for share offerings, at least, the near-term future is looking bright. For that, the territory can thank worsening U.S.-China relations.U.S.-listed Chinese technology companies are lining up to sell stock in Hong Kong, seeking refuge from an environment that has become increasingly less hospitable. Nasdaq-traded JD.com Inc. and NetEase Inc. are planning secondary listings in the city next month, following a trail blazed by Alibaba Group Holding Ltd. in November. Optimism that more companies will join them drove shares of Hong Kong’s exchange operator up more than 6% on Monday.There’s every reason to expect these stock offerings to do well, and push Hong Kong back up the rankings of the world’s largest fundraising centers. So far this year, the city is the sixth-largest market by capital raised. It topped the table for the whole of 2019 when New York-listed Alibaba sold $13 billion of stock, underscoring the existence of a strong local investor base for China’s most successful companies.The reception for Alibaba suggests that Asian institutional investors want to be able to trade China’s leading enterprises in their own time zone. JD and NetEase are also among the nation’s technology champions. Beijing-based JD competes with Alibaba in e-commerce, while Hangzhou-based NetEase is behind some of the most popular mobile games in China. Beyond these two, search-engine operator Baidu Inc. is considering delisting from Nasdaq and moving to an exchange nearer home, Reuters reported last week. The coronavirus has exacerbated tensions between Washington and Beijing, while scandals such as fabricated sales at Luckin Coffee Inc. have spurred politicians to push for tighter regulation, giving Chinese companies an incentive to list elsewhere.Hong Kong is an obvious choice. The city burnished its appeal for U.S.-traded companies last week when the compiler of the city’s benchmark Hang Seng Index said it would change its rules to admit secondary listings and companies with dual-class share structures. Stocks that join the benchmark can expect inflows from passive investors such as exchange-traded funds that track the index.Citigroup Inc. reckons that 23 of the 249 Chinese stocks traded in the U.S. meet Hong Kong’s criteria for a secondary listing, which require companies to have a market value of $5.2 billion or, alternatively, a combination of $129 million in annual sales and a $1.3 billion market cap. JD tops the group with a value of $73 billion.An even more alluring prize would be inclusion of secondary listings in Hong Kong’s stock-trading links with the Shanghai and Shenzhen exchanges, which would enable mainland Chinese investors to buy these shares. Alibaba wasn’t included in the stock connect, to the disappointment of some investors. China’s government could yet decide to make this happen.It’s a reminder that Beijing has levers at its disposal to help shore up Hong Kong’s economy and financial industry, which accounts for a fifth of the city’s gross domestic product — as it did after the SARS epidemic in 2003, when half a million people demonstrated against the Hong Kong government’s first, aborted attempt to introduce national security legislation. Hong Kong Exchanges & Clearing Ltd. surged the most in 18 months Monday even as unrest returned to the city. Listing of American depositary receipts may double the exchange operator’s revenue, Morgan Stanley said. The Hang Seng Index, meanwhile, stabilized after slumping 5.6% on Friday.An exodus of businesses, people and capital may yet imperil Hong Kong’s role as an international financial center. The IPO outlook suggests that, rather than a sudden demise, that’s likely to be a long drawn-out process. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
China denounces a move by the U.S. Commerce Department to expand its so-called entity list of Chinese firms, which are restricted from doing business with U.S. firms, for alleged human rights abuses in the Xinjian Uighur Autonomous region.
Sherman says that the time has long passed for Washington to force Chinese companies to provide the same investor protections that U.S. companies have for decades.
(Bloomberg) -- Alibaba Group Holding Ltd. slid after projecting revenue growth will slow this year, reflecting post-Covid 19 economic uncertainty at home as well as the potential for U.S.-Chinese tensions to disrupt its business.Its stock slid as much as 4% in Hong Kong Monday, after a drop of almost 6% in New York before the weekend. The e-commerce giant forecast sales growth this year of at least 27.5% to more than 650 billion yuan ($91 billion), down from 35% previously and slightly below analysts’ estimates. While it posted a better-than-expected 22% rise in March quarter revenue of 114.3 billion yuan, that marked its slowest pace of expansion on record.Online shopping began to bounce back from March, executives said Friday. But the tepid outlook demonstrates the world’s second-largest economy has yet to fully shake off Covid-19, with consumers still hesitant about spending on big-ticket items. Asia’s most valuable corporation is tackling also the rise of rivals such as ByteDance Ltd. and Pinduoduo Inc. And the Tmall operator is going head-to-head with Tencent Holdings Ltd. for internet leadership in everything from online media to payments and cloud computing. JD.com Inc., the No. 2 Chinese online retailer, forecast better-than-expected revenue this quarter.“The market is a bit disappointed despite the strength given 2Q guidance of 20-30% YoY growth for JD and 99% GMV growth in 1Q20 for PDD,” CICC analyst Natalie Wu wrote. “We regard Alibaba’s advantage as a market leader as intact and unchanged in the longer run, though it may take several quarters for market sentiment to swing back.”Read more: Alibaba Sales Growth Plumbs New Lows While Uncertainty EscalatesAlibaba has lost more than $70 billion of market value since the coronavirus first erupted in January, and now has to grapple with not just an uncertain global economic environment but also any potential fallout from U.S.-Chinese financial tensions. On Friday, executives sought to assuage concerns about a U.S. bill that mandates much closer accounting scrutiny of U.S.-listed Chinese companies and may bar them from American bourses.Chief Financial Officer Maggie Wu said Friday Alibaba’s financial statements have been consistently prepared in accordance with U.S. GAAP accounting measures and were beyond reproach. “The integrity of Alibaba’s financial statements speak for itself, we have been an SEC filer since 2014 and hold ourselves to the highest standard,” she told analysts on a conference call. “We will endeavor to comply with any legislation whose aim is to protect and bring transparency to investors who buy securities on U.S. stock exchanges.”The bigger short-term challenge is in reviving growth: Alibaba’s bread-and-butter customer management or marketing business grew just 3% in the March quarter. Much of that stems from weaker consumer sentiment during the coronavirus-stricken quarter, when total Chinese e-commerce rose just 5.9% or at less than a third of 2019’s pace, according to government data. Jefferies analysts led by Thomas Chong wrote that Alibaba’s guidance was in fact a positive when viewed against an array of uncertainties gripping the post-Covid 19 global economic environment.What Bloomberg Intelligence SaysUser engagement and transaction volume have rebounded in April and May to precrisis levels, which bodes well for normalized sales growth ahead, especially as merchant-support measures are gradually rolled back.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.Rival PDD posted a revenue rise of 44% on Friday, down sharply from 91% in the previous quarter but ahead of expectations. Its sales and marketing expenses jumped 49%. PDD’s shares climbed 15% Friday.Alibaba’s March-quarter net income was 3.2 billion yuan, down 88% from a year ago when it booked an 18.7 billion yuan one-time gain on investments. In February, Alibaba declared a waiver of some service fees for merchants struggling financially during the outbreak on its main direct-to-consumer Tmall platform. In April, the company rolled out a new 10-billion-yuan subsidy program for Tmall users to buy electronics, encroaching on JD.com’s traditional turf. These initiatives may further compress margins for the June quarter.“The challenging part is for them to achieve the same amount of growth this year,” said Steven Zhu, a Shanghai-based analyst with Pacific Epoch. “Just because they are too big, for the same amount of growth, they need to spend much more effort.”But executives were confident in a gradual e-commerce recovery over the year. Beyond its main business, younger divisions such as its cloud computing arm should buoy the bottom line. That division’s revenue jumped 58% in the quarter.“Despite a challenging quarter due to reduced economic activities in light of the COVID-19 pandemic in China, we achieved our annual revenue guidance,” Wu said in a statement. “Although the pandemic negatively impacted most of our domestic core commerce businesses starting in late January, we have seen a steady recovery since March.”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 Opinion) -- Five years ago, Baidu Inc. founder and Chairman Robin Li sat down with Bloomberg News to explain how foreign investors were getting it wrong.Listed on the Nasdaq a decade earlier, shares of the Chinese search-engine provider had taken a beating over the prior year, and Li’s chief complaint was that Americans just didn’t appreciate the coming changes in its business. The trend in China was toward services like delivery and ride-hailing, as well as bookings for restaurants, beauty salons and doctors. This online-to-offline economy would eclipse search revenue, he predicted.Now, it seems that Li has lost patience. Baidu is looking into the possibility of delisting its shares from the Nasdaq and moving to an exchange closer to home, Reuters reported Friday, citing three people familiar with the matter. Baidu thinks it’s undervalued, according to the report.The backdrop to these discussions is rising hostility to U.S. investments in Chinese assets amid worsening relations between the two countries. The U.S. Senate passed a bill last week that would force companies to delist unless they can prove they’re not under the control of a foreign government.That sounds like a good excuse for Baidu to look for the exit. The reality is that investors lost patience with its management years ago. It was inevitable that the company would seek one day to list elsewhere, as Alibaba Group Holding Ltd. has already done. Baidu’s U.S.-traded stock fell 15% between that September 2015 interview and the end of last year, before the pandemic hit. Over the same period, Alibaba climbed 248%.Li’s problem is that his company failed to grasp the transformation he was talking up half a decade ago. While Alibaba and Tencent Holdings Ltd. have successfully moved into new areas like payments and physical retail, and upstarts like Meituan Dianping and Pinduoduo Inc. now dominate delivery and social-commerce, Baidu has barely changed.Its core business still centers on advertising and accounts for 73% of revenue, which climbed just 2% last year. Investments into new realms like artificial intelligence and autonomous driving have yet to bear fruit. Its other major sales contributor, iQiyi Inc., a video-streaming platform that listed separately on Nasdaq in March 2018, continues to lose money.Around the time that Li complained foreign investors weren’t getting it, some of his contemporaries decided to move home where they felt Chinese investors had a better understanding and would reward them with higher valuations. Internet security company Qihoo 360 Technology Co. was taken private by a consortium that included Citic Group for $9.3 billion in December 2015. It relisted in Shanghai in 2018 via the purchase of elevator maker SJEC Corp., and now trades under the name 360 Security Technology Inc. Chinese investors have soured on 360 Security, pushing the company’s market value down by more than a third since February. There’s a warning for Li. Investors in China won’t assign a higher valuation to a returning company unless it has a convincing growth story to tell. Baidu was a pioneer when it listed on Nasdaq in 2005, paving the way for dozens of Chinese internet stocks to follow. Touted as the Google of China, it symbolized the potential of the sector for American investors. Those days are long gone: Baidu has been eclipsed as China’s technology darling by fasting-growing companies such as Alibaba and Tencent.The problem for Li isn’t that investors don’t understand his business. It may be that they understand it too well. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F […]
The U.S. death toll from the coronavirus that causes COVID-19 edged closer to 100,000 on Friday, as the news emerged that the Centers for Disease Control and Prevention has been combining the results of two different types of tests for the illness in a move that has been sharply criticized by health experts.
Alibaba Group Holding Ltd. said that volume on its China retail marketplaces was back to growing near pre-pandemic levels, but its shares dropped about 4% in Friday morning trading on a weak day for Chinese internet stocks given new fears about U.S.-China relations.
Ontario Teachers’ Pension Plan bought Microsoft, Alibaba, and 3M stock in the first quarter. It sold nearly all its Amazon stock.
Stocks edged down Friday morning as ongoing signs of the economic damage from the coronavirus pandemic compounded with fears of rising U.S.-China tensions. A slew of quarterly corporate earnings results came in mixed.
It was a choppy week in the stock market, before investors headed home for a long three-day weekend. Let's use that extra day to look at some top stock trades for next week. Top Stock Trades for Tomorrow No. 1: Alibaba (BABA) Click to EnlargeSource: Chart courtesy of StockCharts.comAlibaba (NYSE:BABA) stock is falling about 6% despite reporting strong earnings and revenue results. Despite the stumble, the charts still look constructive.BABA stock ran into a roadblock around $220, but held the backside of prior downtrend resistance (blue line) ahead of the print. After Friday's fall though, shares lost this level, as well the 20-day moving average.InvestorPlace - Stock Market News, Stock Advice & Trading TipsNow down near $200, shares are coming up into the 50-day moving average. Aggressive bulls may consider buying this dip, giving the quality of the earnings. However, conservative buyers may consider waiting. * 7 Top-Rated Biotech Stocks to Buy on the Hunt for a Vaccine That's as potentially stronger support near $194 comes into play with the 200-day moving average. On a rebound, I want to see shares reclaim downtrend resistance. Top Stock Trades for Tomorrow No. 2: Beyond Meat (BYND) Click to EnlargeSource: Chart courtesy of StockCharts.comBeyond Meat (NASDAQ:BYND) had a relatively quiet week. The stock continues to form a narrowing wedge after its big post-earnings rally.That has bulls optimistic that a break higher may come into play, while bears are hoping the stock runs out of momentum. On the downside, keep an eye on $130. Below this level and below last week's low at $127.21 could spell trouble for the bulls.On the upside, a move over last week's high at $147.55 puts a potential rally to $160 in play. I do like this trade on a break of either level, but prefer the long side for two reasons.First, earnings are out of the way and the reaction was bullish. Second, there are fewer hurdles in the way on a breakout as opposed to a breakdown, with the 20-day moving average coming into play at $122.40. Top Stock Trades for Tomorrow No. 3: Canopy Growth (CGC) Click to EnlargeSource: Chart courtesy of StockCharts.comCanopy Growth (NYSE:CGC) made some great moves today -- and even gave traders an excellent day-trading situation.Friday's rally is interesting. On the one hand, CGC's move is impressive and the stock is rotating over last month's high. I love that. But at the same time, it's coming into the 200-day moving average near $20 and the 200-week moving average near $21.80.That's not a great scenario, although a rally over these market could put the mid-$20s in play. Keep these levels in mind on the upside. On the downside, watch $18.25. That was the April high, and a dip to this level that holds as support could be a buying opportunity. Top Trades for Tomorrow No. 4: Cronos Group (CRON) Click to EnlargeSource: Chart courtesy of StockCharts.comSticking with the cannabis industry, Cronos Group (NASDAQ:CRON) is moving nicely too. Shares are also rotating over last month's high, but could have a bit more room to run.Watch the $6.70 area for possible support on a pullback. On the upside, look for a gap-fill up toward $7.15, with the 200-day moving average and the $8 mark acting as more significant upside marks.This group can move intensely in both directions. But using levels can help pinpoint when the move is real vs. a fake-out. Have a happy Memorial Day weekend.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * America's Richest ZIP Code Holds Shocking Secret * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post 4 Top Stock Trades for Tuesday: BABA, BYND, CGC, CRON appeared first on InvestorPlace.
Strained relations between China and the U.S. stir up new risks in the stock market as both counties try to navigate through the pandemic economic collapse.
Alibaba Group Holding posted better-than-expected results for its fiscal fourth quarter, but the stock nonetheless was selling off on Friday.
It's all about the news for many on Wall Street. But headlines are also prone to fading away or even revision, as we've seen this week. It literally can be "yesterday's news" in a jiffy. And opportunistic investors can occasionally turn to the price chart and use others' distress from the latest news report to find excellent stocks to buy cheap. Let me explain.In Friday's first half of trade, the headlines are insisting it's all about escalating tensions between the world's two largest super powers. But that's not exactly new news, is it? We've seen this type of political theater before. And on each of those countless headline warnings, as others were fearfully selling, investors purchasing the panic were rewarded. * 7 Inexpensive, High-Dividend ETFs to Buy Still, the fact is, extracting profits from headlines or timing entries and exits based on the latest news is tricky business. This week's bullish stimulus promises from Federal Reserve Chairman Jerome Powell following last week's scary recession warning, or Moderna's (NASDAQ:MRNA) countering novel coronavirus vaccine reports, are other news headlines that have drained more wallets than they've fattened.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * Take-Two Interactive (NASDAQ:TTWO) * JD.com (NASDAQ:JD) * Netflix (NASDAQ:NFLX)To be clear, sometimes headlines suggesting a specific course of action are the real deal. But more often than not, Wall Street is buying those sold goods as others are dumping. As such, let's explore three stocks to buy with bearish stories of their own this week … and much more durable price charts to buy into. News Stocks to Buy: Take-Two Interactive (TTWO) Source: Charts by TradingViewBig-time video game publisher Take-Two Interactive is the first of our stocks to buy. Shares fell nearly 6% Thursday as investors digested a stronger-than-forecast earnings release. The company behind wildly popular series like Grand Theft Auto, Red Dead Redemption and NBA2K also detailed a five-year plan which will deliver Take-Two's "strongest pipeline in company history." That's good news, right?The report does appear to have been a solid Q4 print. However, management did warn 2021 will be light on new releases and that the company will invest slightly more into R&D. And an in-tow modest revision to revenues just beneath analyst views appears to have been sufficient incentive for investors to take profits.But the game for bullish investors is just getting started on Take-Two's price chart.Technically, yesterday's profit-taking is today's opportunity. Shares have pulled back to test their prior pattern and all-time-high after staging a sizable and very constructive breakout from a two-year long bullish inverse head and shoulders pattern. This news stock to buy is in position for purchase and I'm personally still confident our price target of $180-$200 for Take-Two stock will be captured. JD.com (JD) Source: Charts by TradingViewOne of China's two largest Amazon (NASDAQ:AMZN) clones, JD.com, is our next stock to buy. Along with fellow imitator Alibaba (NYSE:BABA), shares of JD were off Thursday and are continuing to get hit Friday on raised U.S. China tensions as lawmakers also look to pass a bill to delist China-based ADRs.The real story I'm seeing right now in JD shares is to trust the price chart rather than politicians and buy into today's weakness. Technically, shares of JD.com have pulled back into a full-blown testing position of its former and pattern high. The decline in stock price follows Monday's bullish earnings-driven breakout to all-time-highs from a failed and very bullish monthly chart head-and-shoulders formation. * 7 Dow Jones Stocks to Buy With Fortress-Like Balance Sheets In this strategist's view, the powerful price signal and demonstrated relative strength trump today's headline worries and make this a great stock to buy. Without being totally dismissive of other investors' obvious worries, I'd advise using an intermediate-term, out-of-the-money bull call spread in lieu of buying JD shares with their open-ended risk profile. Netflix (NFLX) Source: Charts by TradingViewNot that I've saved the best for last, but it may be the most interesting of our stocks to buy. Our final play is streaming video on demand giant Netflix. Shares were off nearly 4% during the session Thursday and finished down more than 2.5% . The news? The company announced plans to proactively cancel inactive subscriptions, which account for less than .005% of its total membership. Ho, hum, right?Further, the step was already telegraphed during a recent earnings announcement.So, what gives? Could the real bearish driver in shares have been an even more dated case of being yesterday's news?An article on Thursday from Investopedia which landed up at the top of Google's search list discussed Netflix's new, but not terribly exciting inactive accounts policy. Moreover, the story also noted Wedbush analyst Dan Ives warning of growing antitrust momentum for Netflix shares.The warning was real. However, it appears to have been old news from months ago discussed on an interview on Bloomberg. Could that have been the actual, but mistaken, driver behind the sell-off? In this day and age of juiced-up algorithmic trading, I wouldn't be too quick to dismiss the possibility.The good news is the price drop is being offered to the advantage of today's investors. Technically, the pullback in Netflix puts shares within 3% of April's massive 'W' base breakout. I'd recommend buyers give this stock a bit more room down to $385 and size the position accordingly. Conservatively, this powerful and well-built pattern should reverse higher, continue to climb through 2020 and reach an eventual price target of $600 based on the structure's overall size.Investment accounts under Christopher Tyler's management does not own any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * America's Richest ZIP Code Holds Shocking Secret * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post 3 Stocks to Buy After the Headline Panic appeared first on InvestorPlace.
Alibaba’s online sales skyrocketed in its quarterly earnings report. Yahoo Finance’s Jared Blikre weighs in on the latest financial results.
(Bloomberg) -- Alibaba Group Holding Ltd. Chief Financial Officer Maggie Wu said the company is closely monitoring a U.S. bill that aims to delist foreign companies from the country’s stock exchanges and anticipates that it will be able to comply with any new regulations.Wu said the company “will endeavor to comply with any legislation whose aim is to protect and bring transparency to investors who buy securities on U.S. stock exchanges.”The legislation, which was approved by the Senate Wednesday and is targeted at Chinese listings, would require companies to certify that they aren’t under the control of a foreign government. The new rules could mandate that Chinese companies hand over the original auditing documents, which could create some challenges because Chinese law restricts their distribution.In a conference call to discuss the company’s quarterly financial results, Wu said Alibaba has long worked within U.S. accounting rules and is audited by the Hong Kong arm of accounting firm PricewaterhouseCoopers LLP.She also pointed out that U.S. investors who bought Alibaba stock during the company’s 2014 initial public offering would have benefited handsomely. Alibaba’s shares are up 197% since then, compared with a 2% increase in the New York Stock Exchange Composite Index.The proposed law, which has bipartisan support and will next be reviewed by the House, comes as tensions escalate between American and Chinese officials. Alibaba Chief Executive Officer Daniel Zhang said Friday the rising political tensions have added another layer of uncertainty in the post-pandemic world.Alibaba has been plagued by years of Securities and Exchange Commission investigations and questioning from analysts about its financial structure and accounting practices since its U.S. IPO.Inquiries have focused on the consolidation of Alibaba’s businesses and related-party transactions including Ant Financial and its Cainiao Network logistics arm. The company has also been probed on how it calculates “gross merchandise volume,” a key metric to determine its e-commerce growth rate, and how it reports data from its Singles’ Day promotion.Alibaba on Friday reported its slowest pace of revenue growth on record, reflecting the impact of China’s economic contraction across its online marketplaces.Read more: Alibaba Sales Growth Plumbs New Low During China’s SlowdownThe Chinese e-commerce leader forecast growth in revenue this year of least 27.5% to more than 650 billion yuan ($91 billion), compared with the 657 billion yuan average analysts were projecting. Sales rose 22% to 114.3 billion yuan in the March quarter. Net income was 3.2 billion yuan, down from a year ago when it booked an 18.7 billion yuan one-time gain on investments.(Updates with Alibaba share gains 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) -- Alibaba Group Holding Ltd. expects revenue growth to slow this year, reflecting post-Covid 19 economic uncertainty at home as well as the potential for U.S.-Chinese tensions to disrupt its business.The e-commerce giant forecast sales growth this year of at least 27.5% to more than 650 billion yuan ($91 billion), down from 35% previously and slightly below analysts’ estimates. While it posted a better-than-expected 22% rise in March quarter revenue of 114.3 billion yuan, that marked its slowest pace of expansion on record. Alibaba’s shares slid more than 5% in New York.Online shopping began to bounce back from March, executives said Friday. But the tepid outlook demonstrates the world’s second largest economy has yet to fully shake off Covid-19, with consumers still hesitant about spending on big-ticket items. Asia’s largest corporation is tackling also the rise of rivals such as ByteDance Ltd. and Pinduoduo Inc. And the Tmall operator is going head-to-head with Tencent Holdings Ltd. for internet leadership in everything from online media to payments and cloud computing.Alibaba has lost more than $40 billion of market value since the coronavirus first erupted in January, and now has to grapple with not just an uncertain global economic environment but also any potential fallout from U.S.-Chinese financial tensions. On Friday, executives sought to assuage concerns about a U.S. bill that mandates much closer accounting scrutiny of U.S.-listed Chinese companies and may bar them from American bourses.Chief Financial Officer Maggie Wu said Alibaba’s financial statements have been consistently prepared in accordance with U.S. GAAP accounting measures and were beyond reproach. “The integrity of Alibaba’s financial statements speak for itself, we have been an SEC filer since 2014 and hold ourselves to the highest standard,” she told analysts on a conference call. “We will endeavor to comply with any legislation whose aim is to protect and bring transparency to investors who buy securities on U.S. stock exchanges.”The bigger short-term challenge is in reviving growth: Alibaba’s bread-and-butter customer management or marketing business grew just 3% in the March quarter. Much of that stems from weaker consumer sentiment during the coronavirus-stricken quarter, when total Chinese e-commerce rose just 5.9% or at less than a third of 2019’s pace, according to government data.Rival PDD posted a revenue rise of 44% on Friday, down sharply from 91% in the previous quarter, although that still beat expectations. Its sales and marketing expenses jumped 49%.Alibaba’s net income was 3.2 billion yuan, down 88% from a year ago when it booked an 18.7 billion yuan one-time gain on investments. In February, Alibaba declared a waiver of some service fees for merchants struggling financially during the outbreak on its main direct-to-consumer Tmall platform. In April, the company rolled out a new 10-billion-yuan subsidy program for Tmall users to buy electronics, encroaching on JD.com Inc.’s traditional turf. These initiatives may further compress margins for the June quarter.“The challenging part is for them to achieve the same amount of growth this year,” said Steven Zhu, a Shanghai-based analyst with Pacific Epoch. “Just because they are too big, for the same amount of growth, they need to spend much more effort.”But executives were confident in a gradual e-commerce recovery over the year. Beyond its main business, younger divisions such as its cloud computing arm should buoy its bottom line. That division’s revenue jumped 58% in the quarter.“Despite a challenging quarter due to reduced economic activities in light of the COVID-19 pandemic in China, we achieved our annual revenue guidance,” Wu said in a statement. “Although the pandemic negatively impacted most of our domestic core commerce businesses starting in late January, we have seen a steady recovery since March.”What Bloomberg Intelligence SaysThe company’s businesses most impacted by merchant and logistic disruptions are also its most lucrative, such as retail marketplaces Taobao and Tmall, while faster-growing segments like cloud computing and digital entertainment don’t contribute to profit. Subsidies for users and merchants will add to costs. Alibaba may provide an improved growth outlook for the June quarter given the retreat of the pandemic in China, but the recovery could be gradual as consumption sentiment remains weak.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.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 Opinion) -- Although it’s not surprising that China’s Alibaba Group Holding Ltd. has joined a long list of global consumer companies that took a hit from the Covid-19 pandemic, the details of its March-quarter earnings indicate that its struggles may not be over after the crisis subsides.Consider online commerce, which investors might expect to benefit from customers being stuck at home. In fact, commissions dropped while ad revenue climbed, with a net result of just 2% growth in a sector that counts for around half of annual sales. Counterintuitively, the consumer segment that did manage solid growth was its physical retail businesses such as groceries. Then there’s those hot new areas that should enjoy strong demand from the stay-at-home economy. Cloud computing is the obvious beneficiary. Companies, consumers and educators have been rushing to online solutions to fill in for in-person events. At Alibaba, that business climbed 58% from a year earlier. That sounds like a huge number but is in fact the slowest level in at least two years. Rather than drive growth, the pandemic seems to have hindered it. This matters because Alibaba is doubling down on cloud computing in recognition of that sector’s future prospects and is absorbing continued losses. If it’s unable to leverage such an opportunity, then other challenges including competition and regulation pose potential headwinds.Another supposed opportunity comes from digital media and entertainment, which includes streaming service Youku, Alibaba Music and TMall TV. Collectively, this category climbed a mere 5% for the quarter and only 12% for the year and remains the single biggest drag on earnings. If growth is stalling, even as consumers are stuck at home and well before break-even, then investors have to wonder how long Alibaba is going to let this business burn a hole in the earnings statement.It’s easy to dismiss all these items as one-offs, ready to be overcome once sunny skies return. Yet the macro picture for Alibaba is not rosy. Growth is slowing everywhere. Active annual consumer numbers climbed a mere 2.1%, and China’s government earlier Friday scrapped its annual GDP target, an admission that the broader economy is going to suffer.Although investors want to believe that China’s rapid return to work will be like a wave of the wand for its tech titans, Alibaba is no magician.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Billionaire Jack Ma’s Ant Group generated about $2 billion of profit in the December quarter, underpinned by its push to help Chinese lenders dole out money to the country’s under-banked consumers.The finance giant generated about $721 million in profit for Alibaba Group Holding Ltd. during the period, according to the e-commerce giant’s earnings filing. Based on Alibaba’s 33% equity share, that would roughly translate to $2 billion in profit for Ant. A representative for Ant declined to comment.Ant is now valued at about $150 billion, more than Goldman Sachs Group Inc. and Morgan Stanley combined. The company entered the banking arena as a disruptor, raising alarm bells for many of the nation’s 4,500 lenders. But about two years ago, it flipped the idea on its head, and began turning China’s lenders into clients by helping them provide loans and selling them cloud computing power.Ant’s sprawling network of more than 900 million active users means it can help China’s state-back lenders reach consumers in smaller cities that want credit. Outstanding consumer loans issued through Ant may swell to nearly 2 trillion yuan by 2021 according to Goldman Sachs analysts, more than triple the level two years ago, Bloomberg has reported.Ant has aspirations to go public, though it hasn’t decided on a timeline or listing destination.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.
Chinese e-commerce giant Alibaba (BABA) has reported strong earnings results, with Q4 Non-GAAP EPS of $1.30 easily beating consensus estimates by $0.44 and demonstrating 7% year-over-year growth. GAAP EPS of $0.16 beat Street expectations by $0.04.Revenue of $16.14B marked 22% year-over-year growth, topping estimates by $860M, due to the solid performance of BABA’s domestic retail businesses and robust cloud computing revenue growth.“Alibaba achieved the historic milestone of US$1 trillion in GMV [gross merchandise value] across our digital economy this fiscal year,” cheered Daniel Zhang, CEO of Alibaba. “Our overall business continued to experience strong growth, with a total annual active consumer base of 960 million globally, despite concluding the fiscal year with a quarter impacted by the economic effects of the COVID-19 pandemic.”Meanwhile Maggie Wu, CFO of Alibaba gave a promising outlook for the months ahead, stating: “Although the pandemic negatively impacted most of our domestic core commerce businesses starting in late January, we have seen a steady recovery since March. Based on our current view of Chinese domestic consumption and enterprise digitization, we expect to generate over RMB650 billion in revenue in fiscal year 2021.”Indeed, annual active consumers on the company’s China retail marketplaces reached 726 million for the quarter ending March 31, an increase of 15 million from December 31, 2019.Net cash provided by operating activities was RMB2,164 million ($306 million), down from RMB18,553 million in the same quarter of 2019, due to the one-off AliExpress Payment Services Restructuring. Excluding this expense, non-GAAP free cash flow would have been an inflow of RMB1,977 million ($279 million), says BABA.All ten analysts covering Alibaba currently rate the stock a buy- giving it a firm Strong Buy consensus. The $252 average analyst price target indicates upside potential of 19%, with shares currently flat year-to-date. (See Alibaba stock analysis on TipRanks).“We view the full impact & duration of the Covid-19 outbreak as an unknowable. But we remain very positive on BABA’s long- term fundamental outlook and view valuation as reasonable” comments RBC Capital analyst Mark Mahaney. The analyst has a buy rating on Alibaba, and sees shares reaching $230.“We are struck by recent government data that details that China Online Retail sales reached ¥8.5T RMB ($1.2T) in 2019 (up 19.5% Y/Y) and amounted to approx. 27% of China’s total retail sales. This scale, growth, and especially penetration all remain impressively robust, and we believe BABA remains the best play on this” he adds.Related News: Alibaba to Invest $1.4 Billion into Tmall Genie AI Capabilities Baidu May Use Nasdaq Delisting To Boost Value – Report Apple To Reopen More Than 25 U.S. Stores More recent articles from Smarter Analyst: * Air Canada’s Proposed Takeover Of Transat Faces EU Anti-Trust Probe * Uber Cuts 600 Jobs In India, Cites Unpredictable Covid-19 Recovery * Latam Airlines Files For Chapter 11 Bankruptcy Protection In U.S. * Chi-Med, BeiGene Join Forces For Solid Cancer Tumor Treatment
Ahead of earnings, should you buy Alibaba (NYSE:BABA)? The novel coronavirus took some wind out of the company, but China's in recovery mode. Growth remains in motion for the company's e-commerce and cloud computing businesses. In short, there's good reason why investors have bid Alibaba stock higher in recent weeks.Source: Kevin Chen Photography / Shutterstock.com Granted, shares haven't retraced prior highs set in January. Yet, with shares still below the high-water mark, now may be the time to buy. As China puts coronavirus in the rear-view mirror, shares could continue to bounce back.Recent backlash over U.S.-listed Chinese stocks may give you pause. The risks of the U.S.-China trade war resuming is another key risk. But, with these factors priced into shares, don't let this keep you away from this opportunity.InvestorPlace - Stock Market News, Stock Advice & Trading TipsLet's dive in, and see why Alibaba stock could be a strong buy before earnings. E-Commerce, Cloud Growth and Alibaba StockAs our own Matt McCall recently wrote, "investors are flowing into what's working." In other words, shares in hard-hit airline and retail stocks remain far below prior highs. But, coronavirus hasn't really affected big tech stocks. As a result, these names have recovered faster than the overall market. * 7 Excellent Penny Stocks Ready to Roar But that's not the only thing working in this company's favor. Consider the fact that China is largely over the pandemic.As D.A. Davidson's Gil Luria recently put it, "China is the only big country that is really past the peak of the pandemic." While the Western world struggles to "return to normal," China's in full recovery mode.This bodes well for Alibaba's continued growth in their e-commerce and cloud computing businesses. In short, shares could continue moving back to prior highs (around $230 per share). And beyond.Over the next fiscal year (ending March), analyst consensus calls for sales to grow from $71.2 billion to $92.5 billion. In other words, nearly 30% revenue growth.Earnings could climb 20% in the next year, from $7.01 per share, to $8.45 per share. Yes, earnings growth may be slower than revenue growth. But, like it's American counterpart, Amazon (NASDAQ:AMZN), you aren't buying Alibaba for its current earnings.Instead, you are buying for the company's ability to scale into a much larger business down the road. Once growth takes a breather, the company can "cash the check." That is to say, increase margins, resulting in a highly profitable business.Yet, despite these strong points, there are some concerns to keep in mind. While largely priced into shares, they are still caveats to consider. Geopolitical Risks Holding Back ValuationAs InvestorPlace's Mark Hake discussed May 19, Amazon stock has moved much higher year-to-date compared to Alibaba. Why is that the case? There are two key reasons why investors have been afraid to bid up this stock in the same way they've done with its American counterpart.Firstly, there are valid concerns over a reinvigorated U.S.-China trade war. As you may remember from last year, the trade war was bad news for this stock. Shares largely tread water for most of 2019, only moving higher once the battle cooled down in December 2019.Secondly, the recent backlash over US-listed Chinese stocks. After the Luckin Coffee (NASDAQ:LK) fiasco, there's great concern over the reliability of Chinese financial statements. As a result, some are calling for stricter regulations.Proposed legislation moving through the U.S. Congress could mean a delisting of Chinese companies from U.S.-based stock exchanges. Even if names like Alibaba aren't forced out, the hassle of complying with new laws may compel them to de-list voluntarily.The specter of increased U.S. regulation could explain the company's 2019 Hong Kong IPO. With this new listing, the company has less of a need to continue trading in the U.S.In short, it makes perfect sense why shares remain "cheap" relative to Amazon. Alibaba stock trades for a forward price-to-earnings (P/E) ratio of 31. Amazon shares sport a forward P/E of 121.4.Yet, this valuation discrepancy may be an opportunity, not a red flag. Geopolitical risks could be priced into shares. In other words, today's valuation may be a strong entry point. Despite Risks, Consider Alibaba Stock a BuyWeakening US-China relations may be holding this stock back. But, don't let these concerns scare you away. With China in recovery mode, the company's growth prospects in e-commerce and cloud computing remain in motion.Earnings hit the street pre-market on May 22. If the company meets expectations, shares could climb further. Tread carefully due to the geopolitical risks. But consider Alibaba stock a buy at today's prices.Thomas Niel, contributor to InvestorPlace, has written single-stock analysis since 2016. As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * America's Richest ZIP Code Holds Shocking Secret * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post Tread Carefully, but Continued Growth Makes Alibaba Stock a Buy appeared first on InvestorPlace.