Alibaba Revs Up Southeast Asia Online Business Despite Limited Disclosures

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About: Alibaba Group Holding Limited (BABA), Includes: EBAY, FTCH, JD, MELI, MPNGF, PDD, RCKZF, SE, SFIX, SHOP, TSCDF
by: Hock Meng Tay
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Hock Meng Tay
Long/short equity, value, growth at reasonable price
Summary

Alibaba’s overall second-quarter earnings beat estimates, and Lazada’s online business in Southeast Asia continues to thrive.

Lazada’s order growth more than doubling, especially in Indonesia where order growth more than tripled.

As impressive as Lazada’s online performance is, total number of website visits lag behind many Indonesian peers, according to independent Southeast Asia-focused e-commerce tracking firm, iPrice.com.

Using a scenario approach, we valued Lazada’soverall business at close to US$5.03 billion to US$12.45 billion.

Investment Thesis

Alibaba Group Holding Limited (NYSE: BABA) (Alibaba) reported total revenues of RMB 119.02 billion (US$16.65 billion) in total revenues during the second quarter ending September 30, 2019 (2Q FY 2020), up 40.0