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In the stock market, the company is now valued at $302 billion.
Its e commerce division (local+ global) had USD 10 billion profits in the latest half of financial results (which factors the Chinese $2.8 billion Fine). Assuming the first half performance is replicated in 2H, this means Alibaba is currently selling at 15 x P/E. This excludes the future growth potential of its cloud computing, international e commerce, logistics segments.
Wonder what the market or I am missing. Probably market participants are now afraid that its China e commerce division will perform worse because Alibaba is in the CCP's wrong books and CCP may wipe off their billion in annual profits
Personally, I feel that its cloud computing business will become a ten billion profit generator like Amazon's (assuming no CCP intervention). However with CCP likely to intervene because Alibaba is not a government linked company, my prediction is that it will only generate a billion dollar annually. However, this is a good enough turnaround. This will be a turnaround from a 500 million loss to 1 billion profits.
All in all Alibaba, as a conglomerate will be generating about US $23-24 billion on an annual basis. The current valuation seems a tad too low. *If CCP leaves Alibaba alone, it could be generating $35-40 billion in profits annually (which is as large as Amazon).
Source (page 23): https://alibabagroup.com/en/news/press_pdf/p211118.pdf
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Its e commerce division (local+ global) had USD 10 billion profits in the latest half of financial results (which factors the Chinese $2.8 billion Fine). Assuming the first half performance is replicated in 2H, this means Alibaba is currently selling at 15 x P/E. This excludes the future growth potential of its cloud computing, international e commerce, logistics segments.
Wonder what the market or I am missing. Probably market participants are now afraid that its China e commerce division will perform worse because Alibaba is in the CCP's wrong books and CCP may wipe off their billion in annual profits
Personally, I feel that its cloud computing business will become a ten billion profit generator like Amazon's (assuming no CCP intervention). However with CCP likely to intervene because Alibaba is not a government linked company, my prediction is that it will only generate a billion dollar annually. However, this is a good enough turnaround. This will be a turnaround from a 500 million loss to 1 billion profits.
All in all Alibaba, as a conglomerate will be generating about US $23-24 billion on an annual basis. The current valuation seems a tad too low. *If CCP leaves Alibaba alone, it could be generating $35-40 billion in profits annually (which is as large as Amazon).
Source (page 23): https://alibabagroup.com/en/news/press_pdf/p211118.pdf
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