Alibaba

How are the company's shares reacting?

On April 18, 2023, Alibaba gained in share price after news emerged that the Chinese government has eased pressure on Ant Group, a subsidiary of Alibaba.* Regulatory pressure on Ant Group, which mainly deals in financial-technology services, has been a major concern for Alibaba's investors, and this news could have a positive impact on the company's future performance.[1]

In addition to regulatory pressure, Alibaba is facing increasing competition from both local and global e-commerce players. The company's revenue growth rate has slowed in recent quarters, causing concern among investors. Alibaba is trying to diversify its revenue sources by investing in areas such as cloud computing, digital media and entertainment.

Alibaba's financial performance has remained strong, despite the challenges the company has faced. In the last fiscal year, the company reported revenue of CNY 717.3 billion ($111.5 billion), up 30% from the previous year. The company's net profit also rose 24% year-on-year to CNY 156.0 billion ($24.2 billion).

Diversification is key

Alibaba's cloud computing business has been a bright spot for the company, with revenue from that area growing 50% year-on-year in the last fiscal year. The company's cloud computing business is well positioned to take advantage of the surge in demand for cloud services, especially in the Asia-Pacific region.

Overall, although Alibaba faces regulatory pressures and increasing competition, the company's financial performance remains strong and its diversification efforts could position it for long-term growth.

Conclusion

Alibaba is one of the largest Internet companies in the world and a dominant force in e-commerce in China. It has also expanded its business into other areas such as cloud services, digital marketing, logistics and payment solutions. Following the news of the easing of regulatory pressure on Ant Group, which belongs to the Alibaba group, it seems that the company will be able to focus more on growing its business and innovating in the fintech sector. Given its dominant market position and growing interest in e-commerce and digital services, Alibaba has the potential for further growth. Nevertheless, there are also risks, such as competition, regulatory changes or the deteriorating economic situation in China. Overall, Alibaba has a strong market footing and is successfully adapting to changing trends and conditions in e-commerce and digital services. Therefore, it is regarded as one of the significant companies with great potential for future growth and success in the market.

Investment opportunities

The shares of the company are currently in a correction stage. Overall, the company's shares have lost approximately 70% from their peak value.* This number may seem overly negative, but it is important to note that the prices of companies' shares and their actual, fundamental value are not fully correlated. For an investor who has evaluated, accepted the risks, and sees the potential to buy, this downturn is a good buying opportunity. [2]

alibaba

Chart 1 Development of Alibaba's share price over five years (source: Investing.com) *

-----------

Commentary by ApmeFX Chief Analyst Peter Svoreň

 

* Past performance is no guarantee of future results.

 

[1,2] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.

Disclaimer:

The material herein is considered as marketing communication under the relevant laws and regulations, and as such is not a subject to any prohibition on dealing ahead of the dissemination of investment research. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and should not be construed as containing investment advice, or an investment recommendation, or an offer of or solicitation for any transactions in financial instruments. The published content is intended for educational/informational purposes only. It does not take into account readers’ financial situation, personal experience or investment objectives. APME FX Trading Europe Ltd makes no representation that the information provided is accurate, current or complete; and therefore, assumes no liability for any losses arising from investments based on the supplied content. The past performance is not a guarantee of future results.

Blog

How to diversify your investments: think sectors!

Investors can gain exposure to vast investment opportunities through stock market sectors.

The only question is what form their investment will take.

Blog

Exchange-traded funds: what is all the rage?

Exchange-traded funds (ETFs) have been steadily growing in popularity, getting a boost from the Covid pandemic. What made them so popular? For one, it is due to their ease of use. Next on the list of ad...

Blog

The most common types of investments

We know different financial instruments where one of the most important factors is the level of risk-return ratio. This usually means that the higher the risk we take as an inve...

🍪 Cookies

We use cookies to store, access and process personal data to give you the best online experience. By clicking Accept Cookies you consent to storing all cookies and ensure best website performance. You can modify cookie preferences or withdraw consent by clicking Cookie Settings. To find out more about cookies and purposes, read our Cookie Policy and Privacy Notice.

Cookies settings


Cookie Control

What are cookies?

Cookies are small text files that enable us, and our service provides to uniquely identify your browser or device. Cookies normally work by assigning a unique number to your device and are stored on your browser by the websites that you visit as well as third-party service providers for those website. By the term cookies other technologies as SDKs, pixels and local storage are to be considered.


If Enabled

We may recognize you as a customer which enables customized services, content and advertising, services effectiveness and device recognition for enhanced security
We may improve your experience based on your previous session
We can keep track of your preferences and personalize services
We can improve the performance of Website.


If Disabled

We won't be able to remember your previous sessions, that won't allow us to tailor the website according to your preferences
Some features might not be available and user experience reduced without cookies


Strictly necessary means that essential functions of the Website can not be provided without using them. Because these cookies are essential for the properly working and secure of Website features and services, you cannot opt-out of using these technologies. You can still block them within your browser, but it might cause the disfunction of basic website features.

  • Setting privacy preferences
  • Secure log in
  • Secure connection during the usage of services
  • Filling forms

Analytics and performance tracking technologies to analyze how you use the Website.

  • Most viewed pages
  • Interaction with content
  • Error analysis
  • Testing and Measuring various design effectivity

The Website may use third-party advertising and marketing technologies.

  • Promote our services on other platforms and websites
  • Measure the effectiveness of our campaigns

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the Risk Disclosure and Warning Notice