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Alibaba's New Target: $480 By End-2021

ALT Perspective profile picture
ALT Perspective


  • Asian markets cheered President Trump's prompt recovery from his coronavirus infection and his subsequent release from the hospital.
  • Broadly positive travel and consumer spending data of the Chinese amid their Golden Week holiday and the steady China services activity index for September kept the positive momentum going.
  • Alibaba's publicity in its support of numerous U.S. small and medium-sized businesses to go global could help somewhat in shielding itself from the attacks by the rising U.S. political rhetoric.
  • A revisit of Alibaba's multiples over Amazon suggests investors could continue to derive greater returns from the former going forward.
  • The current price uptrend of Alibaba which began in early 2019 is reminiscent of its trading pattern in 2015-2018. If it indeed pans out like in the past, Alibaba could reach for $400 in early 2021 and $480 by the end of the year.

By ALT Perspective

Despite the reported Chinese netizens' perception of President Donald Trump's coronavirus infection as a "comeuppance", Chinese investors together with Asian ones cheered his prompt recovery over the weekend. His subsequent release from the hospital further boosted market sentiment.

Building on the good start to the week was news that the two sovereign wealth funds of Singapore, GIC and Temasek, would participate in the highly anticipated initial public offering of Ant Group, reinforcing speculations since a month ago of their interest. Bloomberg reported last week that GIC planned to invest more than $1 Billion in the fintech unit of Alibaba Group (NYSE:BABA). The duo would be adding to their existing holdings in the company.

Broadly positive travel and consumer spending data of the Chinese released in bits and scraps amid their 8-day long Golden Week holiday kept the positive momentum going. Chinese credit cards/ATM payment processor UnionPay announced that transactions over its network rose 15 percent year-on-year. 425 million domestic tourist trips were made during just the first four days of the holiday.

Tickets to the Great Wall were sold out and the crowd could have been larger if not for the capacity being capped at 75 percent. A similar situation happened at tourist attractions across the country. With international travel largely still restricted, tens of millions of Chinese who would typically be touring outside of China during the extended public holiday looked to local destinations instead, benefiting the domestic economy.

While most movie theaters around the world are shuttered, those in China are experiencing roaring business. Nearly all cinemas (~95 percent) returned to operations by September, according to financial services firm China International Capital Corp. The Chinese box office receipts were RMB3.9 billion (USD581 million) over the eight-day holiday period, the second-highest amount ever for the Golden Week.

ChartData by YCharts

ChartData by YCharts

ChartData by YCharts

ChartData by YCharts

This article was written by

ALT Perspective profile picture
I am honored to have been categorized as a 5-Star financial expert and ranked among the top 2% of financial bloggers on TipRanks in 2017/18. For a period, I was among the top 3 “Opinion Leaders” for Insider Ownership and Services, as well as top 5 for Long Ideas and Fund Holdings. I am an avid reader of market news and company publications with the aim of improving my investment acumen. I enjoy expressing my findings and opinions through writings. My appreciation and understanding of business strategies improved to a whole new level since completing an MBA (Distinction) from a FT100 MBA school. I have worked in companies with businesses that span multiple industries, according me with the exposure to a myriad of sectors.Check out my Author's Picks and over 190 Editor's Picks, among the highest in Seeking Alpha, if not the most.

Analyst’s Disclosure: I am/we are long BABA, BIDU, JD, TCOM, FB, INFO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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