Alibaba? Is it good to invest?

Alibaba Group Holding Limited, also known as Alibaba Group and as Alibaba.com, is a Chinese multinational technology company specializing in e-commerce, retail, internet, and technology.

Alibaba stock price has increased from USD 50-60 in Sep 2015 to nearly USD 280+ in Aug 2020 (4 times growth). Is it still worth to invest in? Refer to the following points to form your own opinion:-

1. Alibaba has 33% stake in Ant Financial which is the China’s dominant mobile payments firm and fintech arm. Ant Financial could be the world’s largest IPO.
2. Alibaba earning per share (EPS) has beaten the analysts’ estimated EPS for the past 4 quarters. Even after bearing the impact of COVID-19 the analysts expect its adjusted earnings to grow 13%.
3. Alibaba total revenue has grown for the past 3 years from CNY 158 billion (Mar 2017) to CNY 509 billion (Mar 2020) based on Yahoo’s finance data.
4. Alibaba total free cash flow has grown for the past 3 years from CNY 62 billion (Mar 2017) to CNY 135 billion (Mar 2020) based on Yahoo’s finance data.
5. Alibaba generates higher-margin revenue from its core marketplaces (Tmall and Taobao). It doesn’t directly fulfill those orders with a first-party logistics network like Amazon or JD. Alibaba’s marketplaces mainly charge listing fees and commissions which hence yields more operating margin than others like Amazon.

What are the risks then? Alibaba faces increasingly dependent on its lower-margin commerce businesses and has increased competitors like JD.com, Tencent and Pinduoduo. A new U.S. Senate bill, which hasn’t been passed into law yet, could also force Alibaba and other Chinese companies to delist their stocks.

If you consider Alibaba to be a stock worth investing in but found that it is too expensive to invest directly in Hong Kong and US market, feel free to contact me for lower cost opportunity to invest in Alibaba.

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Disclaimer: This article is for education and information only and does not represent a recommendation to buy or sell. The writer does not accept any claim against damages incurred due to the buy and sell action. Do you own due diligence before investing.