What happen to Alibaba share price?

Since end of October 2020, Alibaba share had slid due to cancellation of Ant Group’s IPO. The decision to suspend the IPO came after Shanghai exchange officials said the exchange would halt the listing due to the company’s inability to fulfill conditions amid changes in the regulatory environment. Thereafter, great volatility is seen on Alibaba share price. Alibaba has also been fined $2.8 billion by the China regulators after an antimonopoly probe early of 2021. This has affected Alibaba’s net profit.

On 13 May 2021, Alibaba announced its earning. The following shows Alibaba’s performance:-

• Alibaba’s revenue was up 64% year-over-year to 187.39 billion yuan compared to 180.41 Refinitiv’s estimated revenue (beating the estimate)
• However, Alibaba’s net loss is 5.47 billion yuan in the March quarter compared to Refinitiv’s estimated net profit of 6.95 billion yuan due to the antitrust fine.

Straight after the earning announcement, Alibaba share slid another 7% at US pre-market.

Is Alibaba a good buy? Personally, I think it is worth holding for long term while the share price will continue to fluctuate in short term.

Despite COVID-19, Alibaba has proved itself to be able to raise its sales and revenue more than 50% year-over-year. Alibaba net profit is also increasing without considering the fine. (see the table below)

Alibaba’s fundamental is also strong with more than 10% return on assets, 18% return on equity.

Alibaba has remained the selection for many institutions buying due to its attractive valuation.

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