Jack Ma praised Alibaba.Wall Street is more cautious | Private Equity Weekly
Alibaba shares got a boost last week from news that founder Jack Ma was pleased with the company’s turnaround so far. Previously, co-founder and current chairman Joe Tsai told CNBC in late February that he felt more “confident” in Alibaba’s ability to remain a top e-commerce company. Jack Ma resigned as chairman in 2019. Wall Street analysts expect business to grow, but some last week lowered their price targets on the stock. Their common concern is how much money Alibaba has invested in the short term for future growth. China Internet analyst Alex Yao and his team said in an April 9 report that JPMorgan Chase & Co. lowered earnings based on “Alibaba’s commitment to increase investment in core businesses (domestic/international e-commerce and cloud)” predict. The new target price is still about 33% higher than Thursday’s closing price of Alibaba’s U.S.-listed shares. The stock has endured a turbulent period of around 12 months, during which the company restructured its management into six divisions with the aim of carrying out a spin-off “to unlock shareholder value”. The company canceled IPO plans for its cloud business and logistics unit Cainiao one by one. “The first thing we did was admit we were wrong,” Tsai said in an interview with Nicolai Tangen, chief executive of Norges Bank Investment Management, according to a video released on April 3. The company said it owns 2% of Alibaba. shares. “We have admitted in the past that we may not have paid attention to our (shopping app) user experience,” Tsai said. “The second thing is to reorganize our personnel and change the organizational structure in line with the strategy.” John Woo became the CEO of Alibaba in September and also served as the acting head of the cloud business. In December last year, he succeeded Dai Chudi as the head of Taobao and Tmall e-commerce business. The company’s former CEO Zhang Yong suddenly resigned and did not stay on to lead the cloud business as originally planned. UBS analyst Kenneth Fong and his team said in a report on April 9: “In the short term, given Alibaba’s continued user investment in Taobao Tmall and (Alibaba International Digital Commerce), financial indicators in the coming quarters Should remain weak. They lowered their price target by $1 per share to $105 and maintained a buy rating. Competition in Alibaba’s main business lines remains fierce, including its Pinduoduo app and ByteDance’s Douyin. The local version of TikTok) has become Alibaba’s top two rivals in e-commerce, with its Taobao and Tmall platforms leading the industry’s rapid growth in China, Nomura Securities said, citing data from Questmobile. In the field of generative artificial intelligence, ByteDance’s Doubao chatbot is more popular than Alibaba’s chatbot. Data shows that Doubao has about 3.7 million users as of the end of March and is Alibaba’s unified Qianwen artificial intelligence chat. More than twice that of robots. Baidu’s Ernie robot ranks second, with about 2.5 million daily active users. Data shows that as of the end of March, Doubao maintains the first place with 8.4 minutes, but Alibaba’s Uni-President News. It ranked second with 7.7 minutes. Alibaba also integrates artificial intelligence tools and models with its e-commerce and cloud businesses. However, Tsai said in an interview with Norges Bank Investment Management that he estimated that China lags behind the United States in artificial intelligence development. Two years. Alibaba’s six analyst reports last week also barely mentioned AI monetization, Morgan Stanley equity analyst Gary Yu and his team said in an April 10 report. We remain conservative on Alibaba as business transformation may take time. Unlike many, they have a price target of $85. —CNBC’s Michael Bloom and Arjun Kharpal contributed to this report.
