Stock Idea Alibaba: Time to scoop up shares as valuations | FSMOne SG - Research Highlights

Stock Idea

Alibaba: Time to scoop up shares as valuations hit rock bottom

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• Alibaba’s shares have been extremely volatile over the past few weeks, caused by a combination of factors such as missed earnings, slowing economic growth, and the threat of delistings.

• Although the domestic commerce segment is likely to face headwinds in the near future, the growth momentum of other segments such as cloud computing is expected to accelerate.

• With China’s economic recovery showing signs of losing momentum, regulatory pressures may start to ease as China’s adopts a softer stance to bolster its economy.

• Based on the sum-of-the-parts methodology, we arrive at a target price of HKD 257 for Alibaba which translates to an upside potential of approximately 125%.

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: Alibaba (HKEX:9988)