We’re pleased to share the below audio, the first of a series of interviews with AtlasTrend by Christopher Hall of Arrow Securities Group.
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Kevin Hua, Co-Founder of AtlasTrend, walks us through the three growing arms of Alibaba’s fast-paced evolution reinforcing their market dominance.
CLICK BELOW to listen to the interview (listening time is 8:26 minutes)
How big is Alibaba?
- Alibaba has a market value of approximately US$360 billion (or A$475 billion)
- That’s larger than the combined size of Australia’s big 4 banks
- 6 times the combined size of Australia’s 2 largest retailers, Woolworths and Wesfarmers
How fast is Alibaba growing?
- Alibaba has generated 56% revenue growth in 2017 alone
- It’s average revenue growth is 52% for the 5 years up to 2017
- Growth is coming from all 3 core businesses – e-commerce, cloud computing, digital media
- At its recent Investor Day, it surprised the market forecasting 45% to 49% revenue growth for 2018, exceeding market expectations of 35%
- Significant growth can still be expected particularly in its cloud computing and digital media business which are at the beginning of their growth journey
Is it expensive?
- Alibaba is priced as a growth stock. Arguably some of the growth is factored in with its share price jumping 11% since the announcement of its new revenue guidance at its recent Investor Day
- Taking into account its long-term growth outlook, on a price to earnings growth basis it is not as expensive as some online Australian companies such as Webjet
What makes Alibaba an attractive investment?
- It’s enjoyed successes in building a network effect similar to Amazon and Facebook, providing opportunities in adjacent businesses
- It has more room for growth in China where it is a dominant player as well as via expansion to offshore markets
- Alibaba is leveraged into at least 2 long term structural trends, most notably online shopping and big data
Stay tuned for the next series of AtlasTrend’s interviews with Christopher Hall.
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