Summary
- Alibaba’s revenue for the first three months of 2023 was $30.32 billion, down 15.6% from the previous quarter and 5.8% from the fourth quarter of fiscal 2022.
- At the end of March 2023, Alibaba’s total debt was about $23.5 billion, down about $4.2 billion from 2021.
- We initiate our coverage of Alibaba with a “hold” rating for the next 12 months.
- According to the National Bureau of Statistics of China, the total retail sales of consumer goods amounted to 3,491 billion yuan in April 2023, down 7.8% from the previous month and reaching the lowest level in the past ten months.
- Also, we believe that the US presidential election, scheduled for November 5, 2024, will lead to stricter rhetoric from US politicians, who will likely choose to contain China as one of the main topics in their election campaigns.
The Alibaba Group (NYSE:BABA) is a global technology conglomerate founded in the late 20th century by Jack Ma and eventually nicknamed the “Chinese Amazon.” However, the business of one of the world leaders in e-commerce and cloud computing is more like a mix of PayPal (PYPL), Amazon (AMZN), and eBay (EBAY), allowing it to benefit from the synergies of its subsidiaries. Jack Ma’s innovative approach to business development and vast ecosystem has made Alibaba a key player in the digital economy, driving retail trends and providing technologies that improve the quality of life for hundreds of millions of people.
Since the rapid spread of COVID-19, the Chinese authorities have adopted a zero-tolerance policy, which has led to massive lockdowns and other restrictive measures, positively affecting online sales and significantly increasing interest in cloud services from large companies. On the one hand, the pandemic allowed Alibaba to increase its dominance in the market, but on the other hand, the company’s growing influence on the Chinese economy has become one of the reasons for regulatory pressure on the industry from the Chinese authorities.
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