Author | Liu Baodan From performance to market confidence, Meituan is walking out of a three-year low point, but Wang Xing is not stopping there - he has even bigger plans. Going overseas has become a must for Chinese companies. Meituan, which has been warming up for 8 years, has finally made up its mind to put going overseas on the agenda. Recently, Meituan began recruiting senior engineers for international silver enterprise direct connection. After the model was successful in the Hong Kong market, Meituan officially kicked off its overseas expansion, accelerated recruitment and put the first stop of the overseas expansion in Saudi Arabia in the Middle East. Going overseas is a critical turning point, which means that after more than ten years of capacity accumulation, Meituan has to export its local life capabilities to the world, which is as significant as the replication of TikTok by ByteDance. In the wave of Internet companies going overseas, Meituan went overseas later because local life patterns are more important than social, e-commerce and other industries. However, Wang Xing must make this move. Against the background of intensified domestic competition and the shrinking of community group buying, he must find a new growth story. On his entrepreneurial journey, Wang Xing is still determined to create a new business legend in this global adventure. A must-have question. Meituan has fought a beautiful takeaway battle in Hong Kong. On May 6, Measurable AI, a market research firm, released the latest data showing that by March 2024, according to the number of orders, KeeTa, the takeaway business of Meituan in Hong Kong, has a market share of 44%, rising to the largest takeaway platform in Hong Kong. However, Hong Kong is only a stopover for Meituan's overseas expansion, and Meituan has set its real meaning of going overseas in Saudi Arabia. Wall Street news learned that Meituan has been recruiting people around the direction of going overseas in the past two months. The positions include engineers, overseas human resources and operation experts, international payment and transaction product managers, mainly responsible for payments, employee management and related products in overseas markets. More importantly, the recruitment of local talents. More than a month ago, Meituan posted relevant recruitment information on LinkedIn and the Middle East recruitment platform Baye.com, with Riyadh, the capital of Saudi Arabia, as the place of work. From the city selection, Meituan did not choose the United States with a larger market space, nor did it choose Southeast Asia where culture and food are more similar, but chose Saudi Arabia. It can be seen that Meituan's overseas expansion strategy still has a heavy experimental component and is more cautious. Wang Xing is not fighting an unprepared battle. For this overseas expansion, Meituan has been planning for many years. As early as 2016, Wang Xing began to consider the issue of going overseas and visited Silicon Valley, Berlin, Israel, Jakarta and other places. In 2017, Meituan officially laid out overseas accommodation business, first connecting hotels in nearly 100 countries overseas to the Meituan application. At that time, the domestic and foreign takeaway wars were in full swing, and with Meituan's listing in Hong Kong in 2018, Wang Xing's overseas strategy was forced to be shelved. Since then, Meituan has also made a series of international investments, including Swiggy in India, Gojek in Indonesia, and Opay in Nigeria, involving food, taxis, payments and other fields, to prepare for going overseas. Along with the frequent news reports of Meituan's victory in Hong Kong, Meituan's overseas plan was finally brought to an unprecedented strategic height in 2024, and Wang Xing once again rushed to the forefront. In February, Meituan put the home business group, the in-store business group and other businesses into the core local business sector, and appointed Wang Putong as CEO, while Wang Xing personally took charge of overseas business, which ensured the landing of the overseas expansion strategy in the organizational structure. In fact, before the confirmation of the overseas expansion strategy, Wang Xing personally visited the Middle East last May and met with members of the Saudi royal family, laying the foundation for Meituan's layout in Saudi Arabia.

In today's weather is good. Today's weather is good.

With the favorable policies and market conditions in the past three years, Alibaba, which has experienced some setbacks, has completely turned the tide and once again become a favorite of investors.

At one point, Alibaba's market cap reached 2 trillion RMB, and its stock price surged to nearly a two-year high. As the "top player in e-commerce," Alibaba is experiencing its shining moment. Some investment banks have stated that Alibaba's valuation is returning and emphasize the need to see Alibaba's long-term value.

Alibaba is a benchmark for institutional investors in Chinese concept stocks. Over the past three years, regulatory headwinds and intensified competition in the e-commerce market have negatively impacted Alibaba's stock price. Now, with Alibaba successfully completing a three-year rectification plan and its e-commerce business regaining momentum, the second growth curve is picking up speed again. Alibaba is reigniting its fighting spirit to face the future with a new attitude.

This means that if the upcoming favorable policies can boost the economy with greater momentum, Alibaba's fundamentals can further recover.

Alibaba's vision is to become a century-old enterprise. After experiencing the ups and downs of its listing and setbacks in the past few years, Alibaba is climbing out of the trough, gradually overcoming past uncertainties, and ushering in a brand new beginning.

Restart

In the past month, Alibaba has performed well in the capital markets. The stock price rose by 27.33% in September, making it the best-performing month since November 2022.

As of October 15th, despite a recent price correction, Alibaba's total market cap has reached 1.75 trillion RMB, up more than 58% from the low point this year. Alibaba's stock price has also risen by 34.94% this year, outperforming the Hang Seng Tech Index during the same period (up 18.24%).

Behind the rapid recovery of Alibaba's stock price, investors are reassessing Alibaba. Before the National Day holiday, Goldman Sachs raised the preference for e-commerce companies in the China Internet industry sector to the top two positions, tied with the gaming industry for first place, believing in the significant potential for value reevaluation of e-commerce companies like Alibaba.

After the recent rapid increase, JPMorgan still holds optimistic expectations for Alibaba and has raised the target price for Alibaba. JPMorgan analyst believes that Alibaba is the most attractive in terms of valuation in the current Chinese e-commerce industry.

Indeed, from a global e-commerce industry perspective, Chinese e-commerce companies including Alibaba are still undervalued. Currently, the average PE ratio of the global e-commerce industry is around 25, while Alibaba's estimated PE ratio for the next 12 months is around 13, still with significant room for recovery.

A managing director of a foreign investment bank told Wall Street News that the biggest change in the market this year is the higher correlation between stock prices and fundamentals in the Chinese market. Combined with increased buybacks or dividends by internet companies, this has boosted investors' risk appetite.

In May this year, Alibaba issued a $4.5 billion convertible bond, a clear sign of overseas investors' warming attitude towards Chinese companies fundraising overseas. This also indicates that ahead of this round of capital market surge, investors have been reassessing the value of Alibaba.

On August 30, following the regulatory announcement that Alibaba's three-year rectification has come to a close, Alibaba gained greater freedom.

On October 14, Hang Seng Indexes Company announced that Alibaba has been included in the Hong Kong Stock Connect and meets the rapid inclusion requirements of the relevant indexes. Alibaba will be included in the Hang Seng Stock Connect Hong Kong Index starting from October 28. This came after its dual primary listing on August 28, marking a milestone achievement after eleven years, listing on the Hong Kong Stock Exchange and gaining independent pricing power. More investors, especially those in mainland China, can also buy Alibaba through the Hong Kong Stock Connect.dual primary listingafter waiting for eleven years, successfully listing on the Hong Kong Stock Exchange with independent pricing power marked another milestone achievement. More investors, especially those in mainland China, can also buy Alibaba through the Hong Kong Stock Connect.

All of these lay the foundation for the reassessment of Alibaba's stock price. After more than three years of stagnation, Chinese concept stocks represented by Alibaba have finally resumed the upward trend.

Challenge

It is undeniable that Alibaba is currently at a delicate juncture.

From the perspective of estimated P/E ratio, Alibaba's valuation is at a relatively high level over the past 12 months. In order to completely break free from the past three years of stagnation and return to the upward trajectory, it also needs to break free from the constraints of valuation and regain investor confidence.

The once mythical Alibaba in the capital markets needs a comprehensive victory to shine once again.

In 2014, Alibaba created a record for Chinese internet companies in the global capital markets with a financing amount of $25 billion. On the listing day, Alibaba's market cap reached $231.4 billion, surpassing Tencent and Amazon, second only to Apple, Google, and Microsoft. This was a huge victory for the Chinese e-commerce model in the capital markets.

In the following years, Alibaba's market cap soared. In 2020, the market cap reached its peak, peaking at $858.1 billion. However, after the peak, crisis loomed. With Chinese concept stocks in a low for more than three years, combined with intensified competition in the e-commerce market, PDD Holdings and TikTok pressured Alibaba, causing a significant drop in market share, leading to a continuous decline in Alibaba's market cap. At the end of last year, PDD Holdings even briefly surpassed Alibaba.

Alibaba also launched a series of counterattacks. In March of last year, Alibaba initiated the largest-ever structural adjustment by splitting into six, aiming to enhance the competitiveness of its core e-commerce business. This involved spinning off businesses such as cloud services and Cainiao for separate listings. Although the restructuring faced obstacles, Alibaba gradually clarified its 'Customer First, AI-Driven' strategy. Meanwhile, a new generation of management led by Daniel Zhang and Toby Xu have taken the forefront.

The company simultaneously launched capital management initiatives through buybacks, dividends, management holding stocks, among others, to boost confidence in the capital markets. For example, in the first quarter of the 2025 fiscal year, Alibaba repurchased a total of $5.8 billion, with $26.1 billion remaining unused in the repurchase program.

Now, Alibaba has stabilized its market situation. On the evening of August 15th, Alibaba released its financial report for the first quarter of the 2025 fiscal year. Taobao saw a high-single-digit increase in online GMV and a double-digit increase in order volume year-on-year this quarter, primarily driven by growth in the number of buyers and purchase frequency. Especially during the second quarter, coinciding with the 618 promotion, Taobao's online GMV experienced strong growth year-on-year.

JPMorgan is bullish on the growth trend of Alibaba's total GMV in domestic e-commerce commodity trade and believes that within the next 6-12 months, Alibaba will transition from a 'market share relinquisher' to a 'stable e-commerce growth stock'. Inclusion in the Hang Seng Stock Connect index and accelerated customer management revenue growth are just short-term catalysts.

For Alibaba, the core of stock growth potential must also return to business logic, especially as the fourth quarter promotion will be a key juncture. On October 12th, Tmall announced that November 11th shopping festival will commence at 8 p.m. on the 14th, featuring not only direct discounts and full reductions, but also increased industry category vouchers, government subsidies, and a focus on discounts.

AI will also bring more imagination to Alibaba's stock price. As the company with the highest investment in AI, Alibaba has now built a complete AI ecosystem covering AI models, cloud computing, e-commerce, and other scenarios. Apart from its internal AI ecosystem, Alibaba has also invested in startups like Moon Shadow, Zhipu, and Zero One Million, making strategic moves in the field of AI.

Previously at the Yunqi Conference, Toby Xu also revealed Alibaba's understanding of AI for the first time. After changing people's lives with e-commerce, he hopes to continue transforming the physical world in the AI era.

Wu Yongming bluntly stated, "AI has the ability to create, help solve complex problems for humans, and clear pathways visible, also opening up the possibility of wide applications of AI in various industry scenarios".

Challenges are also apparent, with domestic e-commerce becoming more intense and competition more fierce; AI remains highly popular, but currently unable to validate the business model, still in the early stages that look very promising, especially as AI technology continues to iterate, cost contradictions will become more prominent.

How to break through, Alibaba is shouldering heavier burdens. But whether it's e-commerce or AI, Alibaba needs to make further breakthroughs, gain more room for imagination, and reflect in financial data, making investors willing to give higher valuations.

Today, the internet industry has gone through the portal era and the mobile era, and the AI era, representing the fourth industrial revolution, has quietly begun. Can Alibaba replicate the capital feast of the past today, perhaps only by going all out, will it be qualified to provide good answers.