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EUROPEAN MORNING News. There are reasons for low Evaluation (ING bank, Investors Interests)
$Alibaba (BABA.US)$ Alibaba posted year-on-year revenue growth of 5.2% to 236.5 billion yuan in the second quarter of the current fiscal year. The Chinese e-commerce company realizes more than 75% of its turnover in China and results were under pressure there.
Scaled back expenses
Chinese consumers have cut back on spending on clothing and cosmetics, products in which Alibaba has a dominant market position. The company also faces increasing competition from Pinduoduo and Douyin in its own country. Outside China, Alibaba is doing significantly better. The turnover of the international activities increased by 29% to 31.7 billion yuan.
Alibaba's operating profit improved 5% to 32.2 billion yuan. On the other hand, adjusted EBITDA fell 5% to 40.6 billion yuan and net profit amounted to 43.9 billion yuan. Furthermore, free cash flow decreased by 70% to 13.7 billion yuan. This decline is largely due to increased investments in the cloud division. Last quarter, Alibaba Cloud Intelligence's revenue rose 7% to 240.2 billion yuan.
Alibaba's operating profit improved 5% to 32.2 billion yuan. On the other hand, adjusted EBITDA fell 5% to 40.6 billion yuan and net profit amounted to 43.9 billion yuan. Furthermore, free cash flow decreased by 70% to 13.7 billion yuan. This decline is largely due to increased investments in the cloud division. Last quarter, Alibaba Cloud Intelligence's revenue rose 7% to 240.2 billion yuan.
Growth plans
We praises Alibaba's clear and well-substantiated growth plans. The analyst believes that the increasing prosperity and private consumption in China should not be underestimated.ING Research points out that the valuation of approximately ten times the expected profit for the current financial year 2025 is lower than average and that Alibaba is therefore trading at a significant discount compared to Western competitors.
We praises Alibaba's clear and well-substantiated growth plans. The analyst believes that the increasing prosperity and private consumption in China should not be underestimated.ING Research points out that the valuation of approximately ten times the expected profit for the current financial year 2025 is lower than average and that Alibaba is therefore trading at a significant discount compared to Western competitors.
Magnifying glass
The reason for this, according to ING Research, is that Alibaba has been under the magnifying glass of the Chinese government and regulators for some time. At the end of October, the company was fined $2.8 billion in an antitrust investigation. ING Research further points out that the American listing and the Hong Kong listing are legally set up as so-called 'variable interest entities' (VIEs)
The reason for this, according to ING Research, is that Alibaba has been under the magnifying glass of the Chinese government and regulators for some time. At the end of October, the company was fined $2.8 billion in an antitrust investigation. ING Research further points out that the American listing and the Hong Kong listing are legally set up as so-called 'variable interest entities' (VIEs)
China has tolerated the VIE structure since 2000, but the Chinese government's criticism of its use has increased recently. In the worst-case scenario, an investor would have no legal claim on the underlying company or its profits, which would be bad news for shareholders in US ADRs and Hong Kong-listed securities. However, new regulations by the Chinese regulator can ensure that this VIE structure acquires a more legitimate character. [ from Investors Interests]
Conclusion; be careful with yout investment in BABA because of 'Variable Interest Entities (VIE). They MUST have AN MORE legitimate Character. That's SHALL be GOOD measures instead of WORDS ONLY ![]()
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Thelord : This is old news the Chinese government already announced previously that they support the VIE structure
Money Thrill OP Thelord : very good, we don't know that in Europe![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Thelord Money Thrill OP : I see![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Thelord : Are you taking a position? Recalled you sold all at 83
Money Thrill OP : all right, i sold at 83 because i have no longer trust in it. I look for moment at $Amazon (AMZN.US)$ , price high, but i suppose that the revenue shall go very upwards because of "datacenter service", and consumers in US with Trump. So shall not buy again Alibaba... i invest for 2 or 3 years and change my portfolio following markets futures. Never losses even when i sell with little loss like Baba, But i have 20 positions and + etf's.
Money Thrill OP : So, if i may say this. I suppose a few European people are on moomoo! They don't know it. So the information is always to late or not so good. Thanks to you i know more know .... but the MILLIONS of people who read it from ING bank shall follow investment information from ING ???