Earnings continue to grow at this Chinese internet company, consistently beating analysts’ forecasts.
Alibaba Group Holding Limited (BABA)
From Internet Wealth Builder
Alibaba Group Holding Limited (BABA) is the Chinese equivalent of Amazon. There are several ancillary businesses attached to this massive e-commerce company, which operates under the Alibaba Group Holdings banner. They include Taobao, Tmall, eTao, and Juhuasuan. The company has 693 million active buyers.
The company will release fourth-quarter results on Thursday. (Nancy’s note: BABA earned $2.61 per ADS, surpassing estimates by 16%, up 49% from last year. Revenues were RMB161.5 billion (US$23.19 billion), up 38%, also higher than expected).
Third-quarter results were impressive, with revenue of $16.7 billion, an increase of 40% year-over-year. Annual active consumers on the company’s China retail marketplaces reached 693 million, an increase of 19 million from the 12-month period ended June 30, 2019.
Income from operations was $2.8 billion, an increase of 51% year-over-year. Adjusted EBITDA, a non-GAAP measurement, increased 39% year-over-year to $5.2 billion. Net income was $9.9 billion, which included a significant one-time gain recognized upon the receipt of the 33% equity interest in Ant Financial. Excluding this gain, non-GAAP net income was $4.6 billion, an increase of 40% year-over-year.
Diluted earnings per ADS (American Depository Shares) was $3.85 and non-GAAP diluted earnings per ADS was $1.83, an increase of 36% year-over-year.
This a long term holding for me and this recent pullback is an opportunity to add to your position.
Action now: Buy, with a target of $250.
Glenn Rogers in Gordon Pape’s Internet Wealth Builder, www.buildingwealth.ca, 1-888-287-8229, February 10, 2020