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Alibaba Stock Hong Kong – Is Alibaba Stock a Good Buy?

Alibaba Stock Hong Kong

Alibaba Stock

Alibaba Stock is traded on the NYSE as American depository shares. However, the company has also applied for a primary listing on the Hong Kong Stock Exchange in July of 2022. Primary listing on the HKEX would be in the form of ordinary shares after the listing process is completed.  The primary listing process is projected to occur before the end of 2022.

Alibaba Group Holding (Alibaba Stock) is one of China’s top e-commerce conglomerates. In recent years, the company has evolved from a basic e-commerce corporation to a conglomerate.  Subsidiary companies range from logistics and food delivery to cloud computing. The organization has a strong presence in the New Retail sector. Its goal is to integrate digital payments, e-commerce, food delivery, and other aspects of business into one large ecosystem. The pervasiveness of smartphones and the growth of online shopping are assisting the company’s traction in this market.

About Alibaba Group Holdings

The business is divided into several areas. China’s Commerce section comprises both retail and wholesale enterprises such as Taobao, Tmall, and Freshippo. International retail and wholesale commerce enterprises such as Lazada and AliExpress are included in the International Commerce section. Ele, Amap, Fliggy, and other location-based businesses are included in the Local Consumer Services sector. Cainiao’s sector comprises one-stop logistics services and supply-chain management solutions on a domestic and worldwide scale.

The cloud business, which began in 2009, has grown to become one of China’s largest. Cloud computing has progressively grown to become one of Alibaba’s fastest-growing businesses and its second-largest revenue generator. For local and foreign enterprises, the Cloud category offers public and hybrid cloud services.  These include Alibaba Cloud and DingTalk.  The Digital Media and Entertainment sector includes Youku, Quark, Alibaba Pictures, and other content, game, and distribution platforms. Damo Academy, Tmall Genie, and other companies are included in the Innovation Initiatives and Others section.

Alibaba Stock Hong Kong – Application for Primary Listing

Alibaba Group pursues a primary listing on the Hong Kong Stock Exchange. On July 26, 2022, Alibaba Group Holding Limited announced that its board of directors has authorized the Company’s management to file for a primary listing on the Hong Kong Stock Exchange’s Main Board. Alibaba will then become a dual-primary listed corporation.  The company is currently listed on the New York Stock Exchange in the form of American Depositary Shares (“ADSs”).  Primary listing on the HKEX would be in the form of ordinary shares after the listing process is completed.  The primary listing process is projected to occur before the end of 2022.

Alibaba currently has a secondary listing on the Main Board of the Hong Kong Stock Exchange.  However, the company is applying for primary listing status.  This is in accordance with the Hong Kong Stock Exchange’s rules and regulations. The Company’s ADS that are traded on the New York Stock Exchange and ordinary shares traded on the Hong Kong Stock Secondary Exchange are fungible.  Investors can continue to hold their shares in the form of ADSs traded on the New York Stock Exchange or ordinary shares traded on the Hong Kong Stock Exchange.

Is Alibaba Stock a buy? 

Alibaba Stock is facing a tough time. The last two years were a difficult time for Alibaba as the world slogged through Covid restrictions.

Government Crackdown in Hong Kong – The company was already facing significant disruption as a result of the Chinese government’s crackdown. This was due to its dominant position in several areas, including e-commerce and fintech. Furthermore, the authorities did not like the company’s flamboyant and outspoken founder, Jack Ma. There were a series of actions, including the cancellation of the ANT Group IPO and imposing significant fines.

Flat revenue – Revenue was flat at 205.6 billion yuan ($30.7 billion).  However, operating income dropped 19% year on year to 24.9 billion yuan ($3.7 billion). The revenue reduction in Alibaba’s core Chinese commerce division was offset by a 10% increase in the cloud segment. The company blamed the poor performance of its commerce segment on an industrywide fall in retail sales in April and May 2022.  This was during the return of COVID-19 restrictions.

The Future Could Be Bright for Alibaba Stock

A diversified corporate structure can improve revenue and profit stability. When one section underperforms, the others can compensate, resulting in a more resilient performance over time. Furthermore, such a model can create fresh chances to reinvest capital from a mature division into younger business units.  Overall, this can result in higher long-term returns.

Positive Cash Flow – A bright spot is that Alibaba continued to generate good operating cash flow.  It increased 1% year on year to 33.9 billion yuan ($5.1 billion). This leaves the company with a cash reserve of roughly $51 billion.  As a result, the e-commerce behemoth has all the tools it needs to weather this difficult period.

Diversified profit centers – Alibaba appears to have benefited from a highly diversified corporate model. For example, persistent growth in cloud and logistics offset the last quarter’s poor performance in the commerce division. Furthermore, despite a 1% drop in revenue, commerce earned good profits. These gains have been diverted into faster-growing segments such as local consumer services, foreign expansion, and others.

Alibaba Stock – Investor Relations

Alibaba Stock trades on the New York Stock Exchange using the BABA Stock ticker symbol. The company’s online portal provides essential information to investors and shareholders.

Alibaba Stock Trades as American Depository Shares (ADS)

Alibaba Group Holding Limited American Depositary Shares (ADS) each represent eight Ordinary shares (BABA).

An American depositary share (ADS) is an equity share held by a US depositary bank in a non-US company.  It is accessible for purchase by US investors. An American Depositary Receipt (ADR) refers to the total issuance of shares by a foreign business.  Conversely, ADSs refer to individual shares. However, the words American Depositary Receipts and American Depositary Shares are frequently used interchangeably.

Foreign companies that opt to list their shares on U.S. exchanges benefit from a larger investor base.  Moreover, this can cut future capital expenses. ADSs allow US investors to invest in international companies without having to deal with currency conversions or other cross-border administrative obstacles. However, holding ADSs involves some currency risk. Exchange rate fluctuations between the US dollar and the foreign currency may impact the price of shares.  Also, any income payments must be translated into US dollars.

Alibaba Group Holding Limited (“Alibaba Group”) appointed Citi’s Issuer Services business, acting through Citibank, N.A., as the depositary bank for its American Depositary Receipt (“ADR”) program. Alibaba Group’s ADRs, which began trading on September 19, 2014, represent the largest Depositary Receipt program in initial public offering market history. Alibaba Group’s ADR program was established through a $25.03 billion initial public offering of 368,122,000 American Depositary Shares (“ADSs”), representing ordinary shares of Alibaba Group, which was priced at $68 per ADS on September 18, 2014. The IPO ranks as the largest in history.  (Source:

Alibaba Pledges $1 billion to Cloud Computing

Alibaba announced a $1 billion investment over the next three fiscal years to help its cloud computing clients. A move that should help the  Chinese e-commerce giant to re-ignite development following the historic Covid slump. The company is developing a program to assist its customers in localizing their cloud computing business demands based on the market. According to Gartner, Alibaba is the world’s third-largest cloud computing company, trailing only Amazon and Microsoft. Cloud computing is now a minor percentage of Alibaba’s overall business.  However, management sees it as a vital component of future growth and profitability.

However, Alibaba faces a revival of Covid in the world’s second-largest economy and a harsher domestic regulatory environment.  As a result, the company battles an unprecedented slowdown in growth amid the Chinese economic depression. Alibaba disclosed its first-ever flat revenue increase in the April-June 2022 quarter. Revenue growth in the company’s cloud computing sector has also decreased from the previous quarter. Alibaba’s investment is also part of the company’s larger attempt to develop its cloud computing business outside of China. The company has established new data centers outside of China in recent years.  This facilitates gaining clients in promising regions such as Singapore and Thailand.

Up Next: CLNY Stock – What Investors Should Know About Colony Capital 

CLNY StockColony Capital, Inc. (CLNY Stock ticker)) announced a corporate rebranding to DigitalBridge Group, Inc., and trades on the NYSE as DBRG Stock as of June 2021. Colony Capital, Inc. was a leading global real estate and investment management firm. The Company emerged from the January 2017 merger between Colony Capital, Inc., NorthStar Asset Management Group Inc., and NorthStar Realty Finance Corp. The resulting firm held significant property in the healthcare, industrial, and hospitality sectors.  Employing opportunistic equity and debt investments, the company effectively engaged in institutional and retail investment management. The principal offices were in Los Angeles and New York.

In June of 2021, Colony Capital, Inc. (NYSE: CLNY) announced a corporate rebranding to DigitalBridge. Digital Colony, the Company’s digital infrastructure investment platform, also operates under the DigitalBridge brand. Effective June 22, 2021, the company’s name changed to DigitalBridge Group, Inc., and began trading under the new NYSE ticker symbol, DBRG.

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