Bottom line: Alibaba’s vague road map in its latest chairman and CEO annual shareholder letter is too far off to be meaningful, but does chart its aspirations to change from its current form to something more like an IT services company.
Alibaba shares future vision in shareholder letter
Alibaba(NYSE: BABA) founder Jack Ma and his heir apparent Daniel Zhang have just laid out their vision for the e-commerce giant in their latest annual letter to shareholders, and I have to say it’s at once very grand while also being quite short on detail. There are some lofty goals revealed inside, headlined by a new plan with some targets for what the company hopes to achieve by 2036. Never mind that that’s nearly 20 years away, which is like an eternity when it comes to the Internet.
At the same time, there’s a very general road map for how we get there, all of which I’ll detail shortly. Alibaba has actually executed relatively well so far on some of its road map, which roughly has it transforming from a mere e-commerce company to something more like an IT services provider. But nearly all of that diversification has been within its highly protected domestic market so far, and it’s far from clear it can replicate that model into its nascent international operations. Read Full Post…
Bottom line: Alibaba’s purchase of 33 percent of Ant Financial looks like a shrewd move for both firms, making Ant more attractive in the run-up to an IPO likely to be one of the world’s biggest this year.
Alibaba and Ant back together
In what looks like a homecoming of sorts, e-commerce giant Alibaba(NYSE: BABA) has just announced it is taking back a major stake in its Ant Financial affiliate. Followers of this pair will know they have quite a long and complex relationship, and were actually once part of the same company. But they were split apart around a decade ago for political reasons, which apparently aren’t an issue anymore.
The other major plank to this story is Ant’s own story, including the unusual way in which this deal was structured. The company, whose core asset is the popular Alipay electronic payments service, is gearing up for what could be one of the biggest fintech IPOs of this year, likely to raise several billion dollars in Hong Kong. Thus this particular move could be designed to draw more attention to this lesser-known Alibaba offspring, and also to relieve it of some of its financial burden in the run-up to that offering. Read Full Post…
Bottom line: The inclusion of Alibaba’s Taobao marketplace on the latest edition of a US blacklist for piracy signals US is taking a tougher line on trade issues.
Alibaba calls itself ‘scapegoat’ after landing on US blacklist
What a difference a year makes. It was just about this time a year ago that Alibaba(NYSE: BABA) founder Jack Ma scored a major coup by becoming the first major Chinese business leader to score a visit with incoming US President Donald Trump. (previous post) The pair were all smiles back then, with Ma trumpeting a plan to create 1 million American jobs by helping US businesses selling their products into China over Alibaba’s popular e-commerce platforms.
Fast forward to the present, where Ma isn’t smiling anymore, and Alibaba has even taken the unusual step of accusing Trump of making the company into a scapegoat in a growing tide of US protectionism. The abrupt turnabout hinges on two major developments, the most recent being the placement of Alibaba’s consumer-to-consumer (C2C) Taobao website on Washington’s annual “notorious” list of marketplaces with rampant trafficking in pirated goods. That follows another setback for Ma earlier this month when a plan by his Ant Financial saw its plan for a major US acquisition crushed by the Trump administration. Read Full Post…
Bottom line: Yu’ebao’s further lowering of investment limits shows the Ant Financial-owned fund is growing too unwieldy, and the company would be better advised to diversify its wealth management product portfolio.
Yu’ebao gets too fat on cash
Alibaba(NYSE: BABA) founder Jack Ma is quickly discovering that his super-aggressive promotional ways can sometimes yield too much success. That’s my quick assessment of the bottom line from reports that Yu’ebao, the phenomenally successful fund launched by Alibaba’s former financial unit Ant Financial, is further capping the size of individual investments it will take.
The new cap is being set at a relatively low 100,000 yuan ($15,000), and comes just three months after Ant set an initial upper limit of 250,000 yuan per individual Yu’ebao account. The limits are clearly being put in place to avoid Yu’ebao spiraling out of control, as the fund has already become the world’s largest just four years after its launch. Read Full Post…
Bottom line: Alibaba’s anti-piracy PR blitz during the National People’s Congress is aimed at getting attention during the high-profile event, but it will need to keep up its efforts to convince the public and officials its effort is sincere.
Alibaba calls for tougher anti-piracy laws
As the National People’s Congress (NPC) kicks into high gear in Beijing, e-commerce leader Alibaba (NYSE: BABA) is using the annual session of China’s legislature as a soapbox to make its case that it’s being tough in the battle against piracy. In the last 2 weeks alone, founder Jack Ma has made two high-profile declarations on the subject, one equating the problem to the drunk driving menace and the other calling for his country to create tougher laws to fight the problem. Lest anyone think Alibaba is trying to pass the buck, the company has also announced it has filed a lawsuit against a maker of counterfeit pet food. Read Full Post…
Bottom line: Alibaba will closely watch the performance of the newly minted Altaba over the next 1-2 years, and could make a privatization bid with Softbank if it feels the company is undermining its own stock.
Yahoo to morph into Altaba
Yahoo (Nasdaq: YHOO) co-founder Jerry Yang never would have dreamed a decade ago that the ground-breaking search engine he co-founded might someday morph into a Chinese e-commerce company called Alibaba (NYSE: BABA). But that’s pretty much what has just happened, with official word from Yang’s former baby that it will change its name to Altaba following the pending sale of its core Internet business. Read Full Post…
Bottom line: A meeting between Jack Ma and Donald Trump is a major coup for Alibaba and bodes well for its US relations, while a privatization plan for its partly owned Intime Retail reflects its spottier record for strategic investments.
Jack Ma scores Donald Trump meeting
E-commerce giant Alibaba (NYSE: BABA) is wasting no time making big headlines in the New Year, starting with a major coup that has seen founder Jack Ma become the first big Chinese business leader to score a meeting with incoming US president Donald Trump. At the same time, the company is also suffering a much smaller defeat back at home, with word that Alibaba will help to privatize Intime Retail (HKEx: 1833), after becoming a major shareholder in the brick-and-mortar retailer nearly 3 years ago. Read Full Post…
The following press releases and news reports about China companies were carried on August 11. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Announces June Quarter 2016 Results (Businesswire)
Yihaodian Launches 1 Bln Yuan Price War Against Tmall Supermarket (Chinese article)
The following press releases and news reports about China companies were carried on July 30-August 1. To view a full article or story, click on the link next to the headline.
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Giant Interactive, Alibaba’s (NYSE: BABA) Jack Ma to Pay $4.4 Bln for Game Firm Playtika (Chinese article)
China Postal Bank’s $10 Bln IPO Stirs Foreign Interest, But Valuation a Worry (English article)
Besttone Holdings to Pay 6.9 Bln Yuan for China Telecom (HKEx: 728) Online Video Assets (Chinese article)
Meituan-Dianping Roll Out New Food and Beverage Platform (Chinese article)
Fosun (HKEx: 656) to Buy Brazilian Real Estate Management Fund Rio Bravo (Chinese article)
Bottom line: Smartisan is likely to close or get sold by the end of this year, possibly to Meizu, while Xiaomi’s valuation is likely to fall by up to half when it returns to private investors for new funding with a year.
No near-term IPO for Xiaomi
A couple of fund-raising stories involving smartphone makers Smartisan and Xiaomi are in the headlines, reflecting in different ways the intense pressure each is feeling due to stiff competition that could soon claim a major victim. One headline has everyone buzzing over a recent share sale to raise cash by the founder of Smartisan, a highbrow niche brand set up by China’s most famous English teacher Luo Yonghao. The other has Xiaomi chief Lei Jun saying that his company may make an IPO in 2025, in what looks like a sarcastic response to a reporter’s question. Read Full Post…
Bottom line: A new China Life bid for iKang could trump Yunfeng, while 21Vianet could be mounting a stealth privatization bid that would see it slowly sell most of its shares to big buyers before mounting a formal de-listing attempt.
China Life eyeing bid for iKang?
A few strange twists are taking place in the story that has seen some 40 US-listed Chinese companies launch privatization bids since the start of last year, led by the surprise re-heating of a bidding war for private clinic operator iKang (iKang). In a separate headline, data center operator 21Vianet (Nasdaq: VNET) gave a new signal that it will abandon a previous buyout offer and may launch a stealth de-listing bid instead. And in the strangest development, the board of web portal operator Sohu (Nasdaq: SOHU) has rejected an investment plan by the company’s founder that looked like a prelude to a possible buyout offer at the time. Read Full Post…
