Alibaba: Singles Day a Success but New Internet Guidelines Could Impact Short-Term, , on November 14, 2020 at 12:05 am

By
On November 14, 2020
Tags:

China’s post-pandemic economic recovery got further confirmation on Wednesday. Shaking off any loosely hanging Covid-19 shackles, Alibaba’s (BABA) 11.11 shopping festival proved to be another roaring success.Boosted by a first-time extra sales window between November 1-3, the annual Double 11 shopping extravaganza hauled in gross merchandise value of ¥498 billion (~$74 billion), amounting to 26% year-over-year growth, in line with the 26% uptick of 2019.The event drew in 800 million participants, and Alibaba said that during peak activity, the platform was processing 583,000 orders per second. Overall, there were 250,000 brands selling discounted goods, including 31,000 overseas brands.RBC analyst Mark Mahaney believes the festival’s continued success is a “sign of the durability of Chinese consumers’ consumption rebound since the trough of the pandemic.”As for Alibaba, the 5-star analyst counts its excursion into offline sales including “big ticket retail like autos and real estate” and investment in the luxury category as “additional growth drivers to the platform in the long run.”However, Mahaney also warns of the “increasing drumbeat of regulatory oversight on the Internet platforms.”“We think the Anti-Monopoly Guidelines for the Internet Platforms published on 11/10 (esp. around merchant exclusivity and fair pricing) potentially carries greater implications for BABA vs. its eCommerce competitors, given BABA’s dominant scale in China Internet retail,” the analyst said.As such, Mahaney expects the stock to come under pressure in the near term, a projection already playing out with shares down by 13% so far this week.That’s not to say the fundamentals for Alibaba have changed much.“The long thesis on BABA remains intact,” the analyst said. “We believe the company’s ability to remain a leader in China eCommerce hinges on its ability to sustain the traffic growth and purchasing power of consumers on its platform, as well as continuing to innovate, which we believe BABA is capable of.”All in all, Mahaney reiterated an Outperform (i.e. Buy) rating on BABA shares along with a $335 price target. Investors could be pocketing a 28% gain, should Mahaney’s thesis play out over the coming months. (To watch Mahaney’s track record, click here)Regulation or not, Alibaba remains a firm favorite on Wall Street. All 24 recent reviews rate the stock a Buy, culminating in a Strong Buy consensus rating. The forecast is for 29% upside in the year ahead, given the average price target clocks in at $338.55. (See Alibaba stock analysis on TipRanks)To find good ideas for Chinese stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.,

Alibaba: Singles Day a Success but New Internet Guidelines Could Impact Short-TermChina’s post-pandemic economic recovery got further confirmation on Wednesday. Shaking off any loosely hanging Covid-19 shackles, Alibaba’s (BABA) 11.11 shopping festival proved to be another roaring success.Boosted by a first-time extra sales window between November 1-3, the annual Double 11 shopping extravaganza hauled in gross merchandise value of ¥498 billion (~$74 billion), amounting to 26% year-over-year growth, in line with the 26% uptick of 2019.The event drew in 800 million participants, and Alibaba said that during peak activity, the platform was processing 583,000 orders per second. Overall, there were 250,000 brands selling discounted goods, including 31,000 overseas brands.RBC analyst Mark Mahaney believes the festival’s continued success is a “sign of the durability of Chinese consumers’ consumption rebound since the trough of the pandemic.”As for Alibaba, the 5-star analyst counts its excursion into offline sales including “big ticket retail like autos and real estate” and investment in the luxury category as “additional growth drivers to the platform in the long run.”However, Mahaney also warns of the “increasing drumbeat of regulatory oversight on the Internet platforms.”“We think the Anti-Monopoly Guidelines for the Internet Platforms published on 11/10 (esp. around merchant exclusivity and fair pricing) potentially carries greater implications for BABA vs. its eCommerce competitors, given BABA’s dominant scale in China Internet retail,” the analyst said.As such, Mahaney expects the stock to come under pressure in the near term, a projection already playing out with shares down by 13% so far this week.That’s not to say the fundamentals for Alibaba have changed much.“The long thesis on BABA remains intact,” the analyst said. “We believe the company’s ability to remain a leader in China eCommerce hinges on its ability to sustain the traffic growth and purchasing power of consumers on its platform, as well as continuing to innovate, which we believe BABA is capable of.”All in all, Mahaney reiterated an Outperform (i.e. Buy) rating on BABA shares along with a $335 price target. Investors could be pocketing a 28% gain, should Mahaney’s thesis play out over the coming months. (To watch Mahaney’s track record, click here)Regulation or not, Alibaba remains a firm favorite on Wall Street. All 24 recent reviews rate the stock a Buy, culminating in a Strong Buy consensus rating. The forecast is for 29% upside in the year ahead, given the average price target clocks in at $338.55. (See Alibaba stock analysis on TipRanks)To find good ideas for Chinese stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

,

Instant Quote

Enter the Stock Symbol.

Select the Exchange.

Select the Type of Security.

Please enter your First Name.

Please enter your Last Name.

Please enter your phone number.

Please enter your Email Address.

Please enter or select the Total Number of Shares you own.

Please enter or select the Desired Loan Amount you are seeking.

Please select the Loan Purpose.

Please select if you are an Officer/Director.

High West Capital Partners, LLC may only offer certain information to persons who are “Accredited Investors” and/or “Qualified Clients” as those terms are defined under applicable Federal Securities Laws. In order to be an “Accredited Investor” and/or a “Qualified Client”, you must meet the criteria identified in ONE OR MORE of the following categories/paragraphs numbered 1-20 below.

High West Capital Partners, LLC cannot provide you with any information regarding its Loan Programs or Investment Products unless you meet one or more of the following criteria. Furthermore, Foreign nationals who may be exempt from qualifying as a U.S. Accredited Investor are still required to meet the established criteria, in accordance with High West Capital Partners, LLC’s internal lending policies. High West Capital Partners, LLC will not provide information or lend to any individual and/or entity that does not meet one or more of the following criteria:

1) Individual with Net Worth in excess of $1.0 million. A natural person (not an entity) whose net worth, or joint net worth with his or her spouse, at the time of purchase exceeds $1,000,000 USD. (In calculating net worth, you may include your equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities. Your inclusion of equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.)

2) Individual with $200,000 individual Annual Income. A natural person (not an entity) who had individual income of more than $200,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

3) Individual with $300,000 Joint Annual Income. A natural person (not an entity) who had joint income with his or her spouse in excess of $300,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

4) Corporations or Partnerships. A corporation, partnership, or similar entity that has in excess of $5 million of assets and was not formed for the specific purpose of acquiring an interest in the Corporation or Partnership.

5) Revocable Trust. A trust that is revocable by its grantors and each of whose grantors is an Accredited Investor as defined in one or more of the other categories/paragraphs numbered herein.

6) Irrevocable Trust. A trust (other than an ERISA plan) that (a)is not revocable by its grantors, (b) has in excess of $5 million of assets, (c) was not formed for the specific purpose of acquiring an interest, and (d) is directed by a person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of an investment in the Trust.

7) IRA or Similar Benefit Plan. An IRA, Keogh or similar benefit plan that covers only a single natural person who is an Accredited Investor, as defined in one or more of the other categories/paragraphs numbered herein.

8) Participant-Directed Employee Benefit Plan Account. A participant-directed employee benefit plan investing at the direction of, and for the account of, a participant who is an Accredited Investor, as that term is defined in one or more of the other categories/paragraphs numbered herein.

9) Other ERISA Plan. An employee benefit plan within the meaning of Title I of the ERISA Act other than a participant-directed plan with total assets in excess of $5 million or for which investment decisions (including the decision to purchase an interest) are made by a bank, registered investment adviser, savings and loan association, or insurance company.

10) Government Benefit Plan. A plan established and maintained by a state, municipality, or any agency of a state or municipality, for the benefit of its employees, with total assets in excess of $5 million.

11) Non-Profit Entity. An organization described in Section 501(c)(3) of the Internal Revenue Code, as amended, with total assets in excess of $5 million (including endowment, annuity and life income funds), as shown by the organization’s most recent audited financial statements.

12) A bank, as defined in Section 3(a)(2) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

13) A savings and loan association or similar institution, as defined in Section 3(a)(5)(A) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

14) A broker-dealer registered under the Exchange Act.

15) An insurance company, as defined in Section 2(13) of the Securities Act.

16) A “business development company,” as defined in Section 2(a)(48) of the Investment Company Act.

17) A small business investment company licensed under Section 301 (c) or (d) of the Small Business Investment Act of 1958.

18) A “private business development company” as defined in Section 202(a)(22) of the Advisers Act.

19) Executive Officer or Director. A natural person who is an executive officer, director or general partner of the Partnership or the General Partner, and is an Accredited Investor as that term is defined in one or more of the categories/paragraphs numbered herein.

20) Entity Owned Entirely By Accredited Investors. A corporation, partnership, private investment company or similar entity each of whose equity owners is a natural person who is an Accredited Investor, as that term is defined in one or more of the categories/paragraphs numbered herein.

Please read the notice above and check the box below to continue.

Singapore

+65 3105 1295

Taiwan

Coming Soon!

Hong Kong

R91, 3rd Floor,
Eton Tower, 8 Hysan Ave.
Causeway Bay, Hong Kong
+852 3002 4462