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This is BABA's first report since President and CEO Jack Ma announced in September that he will step down in 2019, although he still intends to remain involved in the company.
Analysts have increasingly feared China's potential economic slowdown as trade struggles continue and signs of slowing consumer spending, particularly in the luxury sector. In its report this week, Baidu (BIDU), another Chinese technology giant, warned that declining confidence in the economy could have a negative impact on the growth of its future income.
Whether or not it has had an impact on BABA seems to be a matter of concern to many analysts and investors. When BABA reports tomorrow, adjusted EPS should stand at 1.06 USD, down from 1.23 USD the previous year, for a turnover of 12.4 billion USD, according to the reports. estimates of consensus analysts established by third parties. Revenues are expected to increase 56.2% from $ 7.94 billion last year.
<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The expected drop in revenue is apparently attributable to the BABA aggressive in all areas of business, as the management had previously announced, will continue in the near future.Some of its investments / acquisitions in 2018 were carried out in logistics companies. ZTO Express (Cayman) Inc. (ADR) (NYSE: ZTO) and Huitongda, the bike sharing start-up, and the Ele.me food delivery company, to name a few. "Data-reactid =" 31 "> The expected decline in revenues is apparently due to aggressive investments by BABA in all sectors, Management has previously indicated that it will continue for the foreseeable future. 2018 were carried out in logistics companies. ZTO Express (Cayman) Inc. (ADR) (NYSE: ZTO) and Huitongda, the bike sharing startup Ofo and the Ele.me food delivery company, to name just a few.
Another probable cause is a decision made by the company at the beginning of the year with Ant Financial, the payment subsidiary of the company that operates Alipay. BABA negotiated a 37.5% profit-sharing agreement with Ant in exchange for a 33% equity interest in the company, which allowed BABA to recognize stock-based compensation costs and the net results of Ant.
Basic trade
In the first quarter of the year, BABA announced that Core Commerce's revenues had increased by 61% over the previous year, reaching $ 10.46 billion, representing a significant share of the total of 12.23 billion dollars. billions of dollars in company revenue.
In BABA's latest report, monthly mobile active users reached 634 million in June 2018, up 17 million from the previous quarter. The annual number of active consumers in its retail markets in China reached 576 million, an increase of 24 million over the 12-month period ending in March.
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The company's annual shopping day, Singles Day, will also be held on November 11th. Analysts could therefore seek more information on how management thinks everything will fit in the current macroeconomic context.
cloud computing
Aside from Core Commerce, BABA's Cloud Computing sector is another top priority for analysts. When it released its latest report, cloud computing revenue grew 93 percent over the previous year to $ 710 million. Management attributed this growth to an increase in the number of paying customers and value-added services.
This division is operating at a loss and BABA has invested heavily in increasing the number of data centers it operates to reach new customers. BABA recently announced the opening of two new data centers in the UK.
alibaba-stock-chart-profit-ant-financial-cloud-computing-lazada.png
A 2018 difficult. While technology stocks have been hit hard in recent sales, Chinese technology has been more difficult. BABA lost about US $ 67 from the US $ 211.70 record reached in early June. Some perspective is needed, however, as equities have increased significantly in recent years. Chart source: thinkerswim® from TD Ameritrade. Not a recommendation. For illustration purposes only. Past performance does not guarantee future results."data-reactid =" 57 ">
A 2018 difficult. While technology stocks have been hit hard in recent sales, Chinese technology has been more difficult. BABA lost about US $ 67 from the US $ 211.70 record reached in early June. Some perspective is needed, however, as equities have increased significantly in recent years. Chart source: thinkerswim® from TD Ameritrade. Not a recommendation. For illustration purposes only. Past performance does not guarantee future results.
Alibaba Options Activity
According to the Market Maker Move indicator of the thinkorswim® platform, option traders announced 5.1% of their shares in both directions. The implied volatility was at the 70th percentile this morning.
In short-term trading at the weekly expiry on November 2, calls were active at the exercise price of 145, with higher volume during the 148 and 150 shares. On the sales side, most recent deals were concentrated during the 140 strike.
At the monthly expiry of November 16, the 140, 145, and 150 exercise prices all recorded higher volumes in recent sessions. Open interest at these levels also remains high, ranging from 27,000 to about 36,000 contracts open as of Thursday.
For put options on the expiry date of November 16, volumes have been lighter during the last few sessions, the action coming closer to its lows of 2018. The strikes of 140, 145 and 150 also attracted keen interest, ranging from 35,000 to 39,500 contracts opened as of Thursday.
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