Is the trade war hurting Alibaba’s Bottom Line?
The U.S.-China trade war doesn’t seem to be hurting Alibaba’s bottom line for now. On Thursday, the e-commerce giant reported a strong quarter with revenue growth of 61%, sending the stock ( BABA) up by as much as 4% in early morning trading.
Is Alibaba’s stock a good investment in 2018?
Alibaba has ups and downs in 2018 as trade disputes continue. Even if tariffs don’t hurt Alibaba, investors still worry about the trickle-down effect of the trade war on China’s economy. Alibaba’s stock is widely seen as a proxy to bet for or against the world’s second-largest economy.
How will trade tension affect Alibaba’s core retail business?
Alibaba said it’s well-positioned as trade tension escalates because it can source products outside the U.S. Amid trade disputes, China has been accelerating its efforts to reduce its reliance on investments and exports. That shift could further boost Alibaba’s core retail business.
Should you worry about the trade war with China?
Clearly, its strong retail business, Ele.me and Alibaba Cloud are all growing at a strong rate. The U.S. tariffs against China are having virtually no impact on results. Since the Chinese consumer appears immune to foreign policy, investors may not need to worry much about the trade war.
How will a trade war with China affect the stock market?
The overall impact of the trade war on the stock market was the same. There was no significant difference between sectors. These results suggest that the effect of the trade war on the Chinese stock market was mainly contagion effect.
Is Alibaba at risk of being delisted?
Delisting from the US stock market has always been a risk for foreign companies especially those from China, and this includes Alibaba.
What companies are affected by US China trade war?
Tech. Chip makers and electronics manufacturers that depend on China for sales, like NVIDIA Corp. (NVDA), Micron Technology (MU) and Intel Corp. (INTC), are seen as especially vulnerable in a trade war scenario.
Why is Alibaba stock down so much today?
Alibaba Stock Falls Amid Worries Over The Potential Deal On China Stock Listings. Shares of Alibaba found themselves under pressure after U.S. audit watchdog stated that it was “premature” to talk about a deal that could keep Chinese companies listed at U.S. – based stock exchanges.
What happens to my Chinese stock if delisted?
For companies that have a listing elsewhere, most commonly in Hong Kong, even if delisting occurs, funds can convert U.S. shares into Hong Kong shares. The delisting procedure itself would pass on no fundamental implications, thus their valuations should remain the same.
Will Alibaba be delisted from the NYSE?
This is unlikely. First of all, depositary receipts could only get delisted in 2024 at the earliest and only after companies failed to subject themselves to a PCAOB audit review for three consecutive years. Even if Alibaba were to be named as a candidate for a delisting, no immediate enforcement action would be taken.
Who benefits most from a US China trade war?
In Asia, the undisputed winner is Vietnam, whose exports to the United States rose by 35 percent, or $17.5 billion. Another standout, Taiwan, used its long-standing comparative advantage in hardware components to benefit from trade diversion.
What would happen if the US stopped trading with China?
If the U.S. is forced to sell half of its direct investments in China, that would cost American investors $25 billion a year in capital gains and up to $500 billion in GDP losses, the report said. U.S. businesses risk losing global competitiveness if sweeping policies force separation from China, the report said.
Who is China's largest trading partner?
United StatesList of largest trading partners of ChinaRankCountry / TerritoryChina exports1United States429.72European Union375.1-ASEAN277.93Japan137.218 more rows
What is Alibaba stock prediction?
Based on 19 Wall Street analysts offering 12 month price targets for Alibaba in the last 3 months. The average price target is $162.34 with a high forecast of $276.00 and a low forecast of $115.00. The average price target represents a 42.80% change from the last price of $113.68.
Can Alibaba stock recover?
As a result, the stock is expected to slowly recover to a price target of $180 in the next two or three years, as the Chinese government slowly regains global investors' trust over time.
How far will Alibaba fall?
For its current fiscal year 2023, Alibaba is expected to earn $7.07 a share, down 15% compared to fiscal 2022. But growth is expected to pick up in 2024, up 19% to $8.43. Click here to the top-rated stocks in the group.
Strong Q3 Results Priced In Alibaba Stock
Alibaba stock rallied from around $150 to $180 after reporting strong Q2 results. Revenue grew 42% year-over-year, while non-GAAP free cash flow topped $3.8 billion. At its pace of active user growth, the company will probably reach 1 billion MAUs on mobile within the next few quarters.
Strong Core Business
BABA continues to expect strong growth from its core business. The China retail marketplace is exhibiting strong user growth and user engagement. Alibaba is immediately investing profits from the business to invest in strategic businesses, such as local consumer services, digital entertainment and international marketplaces.
IoT and 5G on the Way
China is in the midst of upgrading its network to 5G. As the service comes online over the next two years, Alibaba Cloud will benefit. The service will handle more data transfers and will connect millions of users with a faster connection. This will lead to better services to customers as well as to enterprises.
Your Takeaway
Alibaba Group may sustain revenue growth of at least 30% annually over the five years, at the low end of estimates. At this rate, a 5-year DCF Growth Exit model suggests the stock will have minimal upside (per finbox.io). Investors may more realistically expect revenue growth of at least 35-40% annually.
Trade war concerns aren't a big risk to Alibaba stock, but that doesn't make it a safe play
In a market made more nervous by potentially escalating tariffs, Alibaba Group Holding Ltd (NYSE: BABA) might appear a candidate for a selloff. After all, the initial face-off over tariffs will be between the U.S. and China, and as one of most China’s largest companies, Alibaba would appear to be at risk.
Could a Trade War Hit BABA?
There is some reason to argue that Alibaba could be a target of U.S. efforts to “level the playing field,” at least in the eyes of President Trump.
So Is Alibaba Stock a Buy?
If tariff-related fears are unjustified, there’s then a case for buying BABA on the dip. And indeed, Alibaba stock neared a six-month low just a couple of sessions ago, before rallying amid a stronger broad market.
What is the SAMR in China?
In early 2020, China's SAMR (State Administration for Market Regulation) started expanding its antitrust laws, which had primarily targeted large foreign companies, to also monitor its domestic companies. In late 2020, the SAMR forced Alibaba's fintech affiliate Ant Group to suspend its IPO, fined Alibaba over unapproved acquisitions, and launched a formal antitrust probe into Alibaba's e-commerce business.
Is Alibaba stock undervalued?
Image source: Alibaba. Alibaba's stock might look undervalued, but investors should always be skeptical of analysts' estimates, especially when it comes to a company that still faces so many headwinds. Alibaba isn't headed off a cliff, but the worst mistake investors can make right now is to assume the worst is over.
Is Alibaba headed off a cliff?
Alibaba isn't headed off a cliff, but the worst mistake investors can make right now is to assume the worst is over. Instead, I believe the worst is yet to come as regulators tighten their grip on Alibaba.
Is Alibaba facing antitrust issues?
And even more unresolved issues in America. Alibaba's antitrust challenges in China are dominating the financial news cycle, but it also faces three unpredictable regulatory issues in the United States.
Is Alibaba a secondary listing?
That's why Alibaba launched a secondary listing in Hong Kong in late 2019, and why American investors should be wary of holding its ADR shares.