Media review: Ali ushers in “shining moment” multi engine driven solid growth

On August 20, the Reuters breakingviews column published a review entitled “shining moments”. The article pointed out that the newly released first quarter results of fiscal year 2021 showed that its core retail business rebounded in an all-round way, and the growth rate of cloud computing even doubled faster. In addition to the financial report, ant group is also carrying out an epic IPO. The strategic long-term doctrine and innovation ability make Alibaba keep a solid growth pace in the fierce competition. According to Robyn Mak, the author of Alibaba, Alibaba is showing more and more “treasures” to the market, which has become the engine and lever to drive Alibaba’s steady growth and usher in shining moments. For Alibaba, everything has returned to smooth, the review wrote. According to the financial report, as of June 2020, including online e-commerce and offline supermarkets, Alibaba’s retail business revenue in China increased steadily by 34% year-on-year, reaching 14.3 billion US dollars. Other core business indicators also exceeded expectations. Even so, Zhang Yong still holds a more valuable “treasure”. As more and more Chinese companies move their businesses online, Alibaba cloud’s revenue soared 59% to $1.7 billion, according to the financial report. In China’s emerging and rapidly growing cloud computing field, Alibaba cloud has become the leader of the first stage. according to the prediction of HSBC analysts, the annual sales volume of Alibaba cloud will reach 80 billion yuan (11.6 billion US dollars) by 2020. Even with a forward sales estimate of 6.4 times, Alibaba’s cloud computing business will be worth $74 billion. In fact, compared with the global mature cloud computing competitors, the estimation coefficient of 6.4 times has been greatly reduced. ant group will be listed soon, which is another shining point. In 2018, Alibaba converted its stake in ant group into a 33% stake. According to a previous report by Reuters, ant group raised funds at a valuation of $150 billion in the same year. At present, the fintech company is preparing to list in Hong Kong and Shanghai, and its valuation is expected to exceed $200 billion. the article points out that the combined estimated value of Alibaba’s shares in ant group and its cloud computing business is almost equal to one fifth of its market value of US $676 billion (as of August 21, Beijing time, Alibaba’s market value was $697.7 billion), leaving a very large imagination space for the market. Alibaba’s share price has risen 23% since the year to date, ahead of the S & P 500 index. Currently, Alibaba’s expected P / E ratio is 27 times, which is lower than Tencent’s 32 times. This shows that the market’s valuation bias towards Alibaba has expanded in recent two years. For the market, it also means space and opportunity. in the comments, it is very important to include the clear valuation of ant group, which helps to make up for the undervaluation of market value caused by these biases. Similarly, it is particularly important to separate Alibaba’s cloud computing business and review its value. to keep Alibaba growing steadily, Zhang Yong still has a lot of engines and levers, and these increasingly rich treasures will also drive Alibaba to usher in the next “shining moment”. Alibaba’s excellent quarterly performance has added confidence index for the market and investors. “Our core business and new business are developing very well, which enables us to provide a multi engine driver for future growth,” said Wu Wei, chief financial officer of Alibaba Group in a conference call with analysts after the release of the financial report