HANGZHOU, CHINA - NOVEMBER 10: (CHINA OUT) Signage is illuminated at Alibaba Headquarters on November 10, 2013 in Hangzhou, China. Singles' Day has become China's Cyber Monday. The sales volume on Tmall.com and Taobao.com, the China's biggest online shopping sites of Chinese e-commerce giant Alibaba Group Holding, reached 19.1 billion yuan (3.13 billion U.S. dollars) at noon, equaling last year's overall daily sales. (Photo by VCG/VCG via Getty Images)
In his first letter to shareholders, Alibaba’s (BABA) CEO Daniel Zhang has set out a series of ambitious goals for the Chinese e-commerce giant.
BABA’s goal is to serve more than 1 billion consumers in China and facilitate more than RMB10 trillion of consumption on the company’s platforms in the next five years as ‘we continue on the path of globalization’.
Longer-term, Zhang wants BABA to serve 2 billion consumers globally, create 100 million jobs and provide the necessary infrastructure to support 10 million small businesses to become profitable on the company’s platforms by 2036.
“We will continue to pursue our three strategic pillars of globalization, China domestic consumption and big data powered by cloud computing” the CEO said.
“Globalization is our long-term battle; Chinese domestic consumption is our cornerstone battle and big data powered by cloud computing is our battle for the future” he wrote.
Zhang also pointed out that this year the company has migrated its core system onto the public cloud, paving the way to build a cloud-native infrastructure for the future, and held a secondary listing in Hong Kong.
“During this past fiscal year, despite the impact of the pandemic, Alibaba still delivered on a strategic goal that we had established five years ago, which was to surpass US$1 trillion in GMV. This was an important milestone for Alibaba, especially in the context of US$6 trillion in total annual retail sales of consumer goods in China today” Zhang wrote.
The SEC filing also showed that BABA revenue soared 35% over the last fiscal year, with net income up 75%. Meanwhile annual active customers surged to 140 million from 120 million previously.
On July 9, RBC Capital analyst Mark Mahaney reiterated his buy rating on the stock and $235 price target. “While management continues to emphasize strategic investments to sustain long-term growth, we look to narrowing losses on this line as a signal of improved cost management and path to profitability, which we believe would be a material positive for the stock” commented Mahaney.
For the June quarter, the analyst is forecasting 124.6B RMB in Core Commerce Revenue, implying 25% Y/Y growth, and 101.0B RMB in China Commerce (28% Y/Y growth), largely in line with the Street.
Turning to other Wall Street analysts, the bulls have it. The Strong Buy consensus boasts 20 Buy ratings versus 1 Hold rating. The $267 average price target implies 2% upside potential in the shares in the coming 12 months. (See Alibaba stock analysis on TipRanks). Shares in Alibaba are now trading up 23% year-to-date.
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