|Bid||0.0000 x 0|
|Ask||0.0000 x 0|
|Day's Range||0.7300 - 0.7300|
|52 Week Range||0.7300 - 1.5000|
|Beta (5Y Monthly)||0.01|
|PE Ratio (TTM)||15.87|
|Forward Dividend & Yield||0.02 (2.27%)|
|Ex-Dividend Date||Aug 16, 2021|
|1y Target Est||N/A|
(Bloomberg) -- Has the storm passed for Alibaba Group Holding Ltd.?That will be the question for executives and investors as the Chinese e-commerce giant reports earnings on Thursday in the wake of a government crackdown on co-founder Jack Ma’s empire. Profit and revenue for the quarter are sure to be less consequential than any concrete evidence about whether the regulatory issues are resolved.Alibaba has agreed to a record $2.8 billion penalty from Beijing and vowed to change certain practices deemed anti-competitive, including a requirement that merchant sell exclusively on its platforms or not at all. Executives also thanked regulators and pledged to support merchants -- all in a bid to put the regulator troubles behind it.On Monday, Alibaba held its annual staff and family event at its sprawling Hangzhou campus, where kids played in ball pits and drew doodles while the company’s animal mascots posed for photos with employees in cosplay outfits. Chief Executive Officer Daniel Zhang hosted a wedding ceremony for dozens of young couples, according to a corporate video. “No matter when you have good times or challenges, let’s have passion and love, and make our lives and work better,” he told them. Ma was spotted in a blue t-shirt at the festivities, according to photos online, making a rare appearance following a period of enforced hibernation during the worst of Alibaba’s troubles.But several key issues remain unresolved. Alibaba’s finance affiliate, Ant Group Co., is still wrangling with regulators over its future. Beijing is debating how it will regulate the use of data, which is core to Alibaba’s competitive advantage. And finally, the government is considering whether to compel Alibaba to shed media assets, which have supported its brand -- and Ma’s. The firm has lost roughly $260 billion in value since rising to a record in late October. Its Hong Kong shares rose as much as 4.4% Wednesday, paring losses since the fine was announced to about 1%.For the record, the financial results are expected to be strong. Revenue for the March quarter is projected to rise 58% to 180.4 billion yuan ($28 billion) -- recovering from a Covid low -- although net income will take a hit from the fine. Here are the key things investors will quiz management about.Ant’s Uncertain FutureAlibaba owns a third of Ant, the company at the center of Beijing’s fintech crackdown. Its report card this week will provide a peek into how the affiliate performed during the three months ended December -- when its record initial public offering was called off as regulatory scrutiny swung into high gear -- as the fintech firm’s results lag one quarter behind Alibaba.Just days after the antitrust watchdog handed down its fine on Alibaba, financial regulators ordered Ant to turn itself into a financial holding company that will effectively be supervised more like a bank. The company will need to open its payments app to competitors, increase oversight of how that business fuels its profitable consumer lending operations and cut the outstanding value of its money-market fund Yu’ebao.That overhaul has already prompted some investors including Fidelity Investments and Warburg Pincus to slash their valuation estimates for Ant, which had once targeted a record $35 billion for its dual listings in Hong Kong and Shanghai. Now, the firm’s value could plummet to as low as $29 billion from $320 billion previously, according to Bloomberg Intelligence analyst Francis Chan.Data HordeChina’s crackdown on its internet behemoths extend well beyond rooting out practices like forced exclusivity agreements and predatory pricing. Attempts to loosen the stranglehold of Alibaba and its peers over the vast reams of data they’ve accumulated may have even more far-reaching implications and the government is said to be exploring a number of models and actions to force the corporations into opening up their data hoards.Beijing is pouring money into digital infrastructure, drafting new laws on data usage and building new data centers around the country with the goal of positioning China as a leader in transforming the world economy over the next few decades. Xi Jinping declared his intention in March to go after “platform” companies that amass data to refine their services and create better products that allowed them to create natural monopolies that squeeze out smaller competitors.Read more: Xi’s Next Target in Tech Crackdown Is China’s Vast Reams of DataMedia and DealsLike other Chinese tech giants, Ma’s firm has previously carried out a series of mega mergers and acquisitions through a so-called Variable Interest Entity Structure, which operated on shaky legal grounds. That practice has now come under scrutiny from the State Administration for Market Regulation, which began reviewing years-old deals. Since December, it’s issued a series of fines to firms for not seeking antitrust clearance, a move that may chill future dealmaking and hamper Alibaba’s ability to gobble up promising startups or simply buy out competitors that threaten its dominance.Alibaba was ordered in December to pay 500,000 yuan in December for a 2017 deal involving its stake in department store operator Intime Retail Group Co. Other such deals may also come under the spotlight, including its takeover of food-delivery service Ele.me and investment in hypermart operator Sun Art Retail Group Ltd. In the worst-case scenario, Alibaba could be forced to unwind those investments, if they’re found to have violated anti-monopoly laws.Meanwhile, the Chinese government wants Alibaba to sell some of its media assets, including the South China Morning Post, because of growing concerns about the technology giant’s influence over public opinion in the country, a person familiar with the matter has said. The company has a major stake in the Twitter-like Weibo and owns Youku, one of China’s biggest streaming services, as well as the SCMP, the leading English-language newspaper in Hong Kong.Moving OnFor Alibaba, the $2.8 billion fine was less severe than many feared and helps lift a cloud of uncertainty hanging over Ma’s empire. Following the fine, Vice Chairman Joseph Tsai told investors the company was “happy to get the matter behind us,” and that it’s unaware of any other probes into its businesses.Now, the attentions of Beijing appear to be turning to its rivals. Days after bringing the Hangzhou-based giant to heel, the antitrust watchdog summoned 34 of the country’s most influential tech firms and ordered them to learn from Alibaba’s example. They were told to pledge compliance with regulations and given one month to rectify their business practices, a deadline that expires this week.Food delivery behemoth Meituan has been the most visible target. Authorities announced in April they were beginning a probe into for alleged abuses like forced exclusivity, the same charges leveled against Ma’s firm. The food delivery firm and fast-growing Pinduoduo Inc., which recently over took Alibaba in annual users for the first time, were also criticized by the Shanghai Consumers Council this week for hurting consumer rights.Meanwhile, Beijing is preparing to slap a fine of at least $1.6 billion on Tencent Holdings Ltd., Reuters has reported, adding that its music streaming business is under particular scrutiny. Financial regulators also see Asia’s largest company as deserving increased supervision after the clamp down on Ant, people with knowledge of their thinking told Bloomberg in March.“The fine on Alibaba -- although a record high -- is manageable for the company and demonstrates that Beijing seeks change and not disruption, in our view,” UBS Global Wealth Management Chief Investment Office said in its May report. “It also gives a glimpse into what other firms under the regulatory microscope can expect in terms of penalty amount and restructuring changes.”(Updates shares 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.©2021 Bloomberg L.P.
France's Auchan on Friday raised its cost savings goal under its so-called Renaissance revival plan, which boosted 2020 profitability at its retail arm despite the COVID-19 pandemic. Auchan, which reduced debt sharply last year with the sale of its Chinese subsidiary Sun Art Retail Group to Alibaba Group Holdings, on Friday posted a 27% jump in core profit in 2020 and said it would continue to sell some non-core assets in the first half of this year. "Spurred on by its ongoing recovery, Auchan Retail is seeking to sustain this momentum in 2021," the group said in a statement.
(Bloomberg) -- The battle to supply 1.4 billion people with fresh fruit and vegetables is taking China’s e-commerce companies into the country’s hinterlands, where they are attempting to revolutionize centuries-old agricultural practices to secure future supply for their burgeoning online grocery businesses.Xi Jinping’s government has long made self-sufficiency in food a “top state issue” as it seeks to avert a looming food crisis. The need to modernize China’s 200 million largely small-scale farms took on added urgency during the pandemic, when output and logistics disruptions coincided with homebound shoppers turning to Alibaba Group Holding Ltd. and other internet retailers for their produce.Now, some of the country’s largest private companies have joined in with state efforts to help growers boost production, improve food quality and lower prices. For the e-commerce giants, it’s one way of strengthening their foothold in an online grocery market that’s expected to be worth more than $120 billion by 2023, without running afoul of Beijing’s recent crackdown on monopolistic practices like predatory pricing and forced exclusivity arrangements.In Fujian along the eastern coast, Alibaba has provided chicken farmers with smart bracelets that track the health of their poultry, while under JD.com Inc.’s guidance, rice growers in China’s arid north have installed smart sensors to gain real-time insights for irrigation. Out west, scientists in Yunnan are teaming up with Pinduoduo Inc. to use artificial intelligence to automate strawberry planting.“Agriculture is a critical area supported by the Chinese government,” said Liu Yue, an analyst with market research firm EqualOcean. With rural youths flocking to cities for better jobs and food safety increasingly threatened by pesticides and outdated farming methods, the country’s tech champions are eager to lend Beijing a hand, she said.The driving force behind the e-commerce platforms’ push into smart agriculture is the boom in online groceries, which is expected to double to about 820 billion yuan ($127 billion) by 2023 from last year, according to iResearch. The category overtook consumer electronics as the biggest contributor at JD.com in the first half last year, while Alibaba is making a bigger push into the business by taking a larger stake in hypermart Sun Art Retail Group Ltd.Meanwhile, a clutch of smaller rivals ranging from Xingsheng Youxuan and MissFresh-- both backed by Tencent Holdings Ltd. -- to Dingdong Maicai are in the process of raising billions of dollars to grab larger shares of the online fresh foods distribution market. That prompted state media to warn in December against overcrowding in the sector, saying instead that internet giants with immense data and advance algorithms should do more in technology innovation.“Covid-19 has helped accelerate the conversion of such purchases to online channels,” said Vey-Sern Ling, an analyst with Bloomberg Intelligence. “It’s a large untapped market, and the companies have to participate or be left behind.”At a time when Chinese leaders are clamping down on monopolies in areas from fintech to e-commerce, smart agriculture is one sphere where the tech giants’ commercial interests are aligned with the national agenda.In guidelines issued on Sunday, the State Council called for increased private investment to develop modern farming techniques and empower villages using advanced technologies. Breeding and cultivation sciences were also listed as one of Beijing’s top tech priorities for the next five years, alongside AI, quantum computing and computer chips. JD has said its smart farm projects are at least 50% funded by government subsidies.Despite the efforts, the growing appetite for fresh fruits and vegetables has left most of China’s traditionally labor-intensive farms -- roughly 98% of the 200 million operators are families or small businesses -- struggling to keep up. The country’s restrictions on land ownership and diverse terrain spanning the steppes of Inner Mongolia to the tropical shores of Hainan island in the south make it difficult to implement the industrial-scale farming that’s commonly seen in the U.S. and Europe. Data from the National Bureau of Statistics also show that about a third of farm workers are aged 55 or older, and the birthrate is at record lows, driving labor costs higher.Lei Jinrong is one farmer who’s benefited from partnering with the online retailers. The owner of Fuxin Farm in Fujian province has equipped 1,000 of his chickens with Apple Watch-style bracelets supplied by Alibaba. The devices digitally track the number of steps the birds take each day and anything below 20,000 would be an early sign of illness, he said, adding that he no longer needs to patrol his fields in search of sick poultry.The grower has also deployed street lamp-like devices that monitor air temperature, humidity and the level of toxic ammonia gas generated from bird waste, all displayed in real-time on a computer screen at his office. That has enabled Lei to expand production without hiring more workers -- good news as average salaries in his village have almost quadrupled over the past decade.In the eastern province of Shandong, peach farmers increased revenue by 50% last year after using JD’s blockchain technology to encrypt each step of the planting process and increase trust and transparency, attracting consumers long weary of food scandals from tainted milk powder to imitation eggs.“The improved efficiency and the economies of scale will drive down costs while higher-quality produce will yield better prices,” said Charlie Chen, head of consumer research at China Renaissance in Hong Kong. This will benefit both farmers and the e-commerce operators, he said.Pinduoduo, which raised $6.1 billion in November in part to finance its agricultural innovations, is counting on these efforts to help it quadruple sales of farm products to 1 trillion yuan by 2025. The company expects the initiatives to help it diversify beyond online retail, as it aims to license cutting-edge farming technology down the road, according to David Liu, vice president of strategy.Many of these initiatives are still in their infancy and scaling up will take time, as farmers have only recently started to collect data -- the foundation of running AI and other next-generation technologies -- and test new methods of growing. But the twin drivers of surging demand for online produce and Beijing’s push for self-sufficiency in food supplies means the tech behemoths’ forays into modernizing China’s farms have only just begun.“Smart agriculture is really the way to move forward,” said Lei, the chicken farmer. “We all have to innovate.”(Updates with more details from farmer in 13th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.