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Business Times
20 hours ago
- Business
- Business Times
Alibaba expands AI cloud services in Malaysia, Philippines
[TAIPEI] Alibaba Group Holding is adding new data centres in Malaysia and the Philippines in pursuit of artificial intelligence (AI)-driven growth. The Hangzhou-based company's cloud unit launched its third data centre in Malaysia this week and it also plans to open its second data centre in the Philippines in October, it said in a statement released on Wednesday (Jul 2). Alibaba Cloud also said it's launching a global competency centre in Singapore to help accelerate AI adoption across industries. It said the centre would help more than 5,000 businesses and 100,000 developers access advanced AI models. 'Globalisation is Alibaba Cloud's long-term strategy,' Alibaba chief executive officer Eddie Wu said in a recorded video message at a company event in Singapore on Wednesday. Alibaba will accelerate the buildout of its global cloud network in China, Japan, South Korea, South-east Asia, the Middle East, Europe and Americas over the next three years, he added, reiterating its commitment to spend more than US$53 billion on AI infrastructure during the period. Best known for its e-commerce operations in China, Alibaba has been charging into AI, building standalone offerings around its Qwen AI models and growing its cloud services. It has also announced infrastructure investments in Thailand, Mexico and South Korea. In the wake of DeepSeek's emergence on the global stage, Alibaba chief executive officer Eddie Wu declared in February the company's 'primary objective' is now artificial general intelligence, a goal in the industry to build AI systems with human-level intellectual capabilities. BLOOMBERG
Business Times
7 days ago
- Business
- Business Times
China tech firms ramp up M&A deals with the blessing of Beijing
[BEIJING] After a chastening crackdown that wiped billions off their value and forced top executives out of the public eye, China's technology giants are back in favour and on the front foot, making deals and snapping up assets. At the top of the pile are Alibaba Group Holding and Tencent Holdings, two huge players that used to compete for acquisitions in everything from ride hailing and video streaming to online finance, until their wings were clipped by Chinese authorities concerned about their wide and powerful reach. Nowadays, with China's economy struggling to pick up much growth momentum and tensions with the US and others rumbling on, the government's stance has shifted, especially with regard to key areas such as artificial intelligence and tech more broadly, where it's trying to stride ahead of rivals. 'We're seeing more normalisation when it comes to regulation of tech in China, which gives confidence to both companies and investors to start looking at deals again,' said Allan Chu, UBS Group's co-head of technology, media and telecommunications investment banking in the Asia-Pacific region. 'China wants to create national champions in areas such as AI and robotics, so we're poised to see more deals in those areas.' Time for deals Tencent's music platform agreed to buy podcasting startup Ximalaya this month, a step forward in its bid to be China's Spotify. That followed a Tencent subsidiary snapping up a nearly 10 per cent stake in SM Entertainment, a rare Chinese investment into a South Korean company in recent years. In late 2024, Tencent acquired a majority stake in Guangzhou-based Kuro Games, a Guangzhou-based developer best known for its free-to-play gacha title Wuthering Waves. Bloomberg News has reported it is also studying a potential acquisition of Nexon. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up In April, Ant Group – founded by Alibaba pioneer Jack Ma, who disappeared from view in 2020 after criticising regulators – became controlling shareholder of Bright Smart Securities, which promptly rallied nearly 100 per cent the next day. 'Chinese technology companies have been very actively looking at acquisition opportunities both domestically and abroad, as they seek new growth areas and new markets,' said Ho-Yin Lee, head of Citigroup's APAC TMT investment banking group. Dealmakers are also busy with disposals, joint ventures and other investments. Alibaba, which has pledged to invest more than 380 billion yuan (S$68 billion) on AI infrastructure such as data centres over the next three years, has been very active, including selling its majority stake in hypermarket chain Sun Art Retail Group and department store business Intime Retail Group It also formed a US$4 billion JV with E-Mart's e-commerce platform in South Korea. The uptick has come with the blessing of Beijing, eager to reduce any reliance on US technology. President Xi Jinping has met with prominent entrepreneurs to stress his support for them and the private sector. In September, a fresh batch of policies was introduced, emphasising themes such as business upgrades and innovation, and allowing listed companies to conduct more cross-sector deals. With assets increasingly up for grabs, Chinese tech firms often tend to prefer to participate in a consortium instead of being the lead buyer, according to Ellis Chu, head of Asia M&A at Jefferies Financial Group. New force awakens Not long ago, China was warning about 'irregular expansion of capital' and monopolies. Amid the fallout, Tencent scrapped a plan in 2022 to acquire handset gaming brand Black Shark. Among other deals to collapse was a planned merger between DouYu International Holdings with Huya, which was rejected by regulators in 2021 on the grounds it would strengthen the game streaming dominance of Tencent, a shareholder in both companies. Since then, AI has emerged as a major force, boosted by the success of Hangzhou-based DeepSeek, which sparked a rally in Chinese tech stocks this year. A group of startups known as AI Dragons or Tigers has bolstered China's AI credentials and attracted investment from both Alibaba and Tencent. Some are also considering moves such as initial public offerings. 'Market sentiment has changed in a positive way after a surge in AI interest earlier this year,' Chu at UBS said. 'Investor enthusiasm for China tech has come back, and that's led to more capital markets deals such as A+H listings, follow-on offerings and convertible bonds as companies seek to beef up their balance sheets. This strong appetite is poised to continue.' Other deals include TikTok's owner ByteDance acquiring Shenzhen-based earphone maker Oladance, bringing on board a team of seasoned former Bose engineers. ByteDance has also delved into areas like robotics and edtech gadgets through in-house development or investments. 'We're likely to see more in-market consolidation in China,' Chu said. 'After years of being a growth market, now China is more mature for tech companies and, to a certain extent, similar to operations in the West.' BLOOMBERG
Yahoo
11-06-2025
- Business
- Yahoo
Alibaba Group Holding Limited's (NYSE:BABA) Intrinsic Value Is Potentially 49% Above Its Share Price
The projected fair value for Alibaba Group Holding is US$182 based on 2 Stage Free Cash Flow to Equity Alibaba Group Holding is estimated to be 33% undervalued based on current share price of US$122 Analyst price target for BABA is CN¥163 which is 11% below our fair value estimate How far off is Alibaba Group Holding Limited (NYSE:BABA) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by estimating the company's future cash flows and discounting them to their present value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. Don't get put off by the jargon, the math behind it is actually quite straightforward. We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (CN¥, Millions) CN¥95.6b CN¥151.1b CN¥153.7b CN¥169.6b CN¥202.6b CN¥218.7b CN¥232.7b CN¥245.3b CN¥256.7b CN¥267.3b Growth Rate Estimate Source Analyst x6 Analyst x7 Analyst x9 Analyst x8 Analyst x1 Est @ 7.93% Est @ 6.43% Est @ 5.38% Est @ 4.65% Est @ 4.14% Present Value (CN¥, Millions) Discounted @ 9.3% CN¥87.5k CN¥126.5k CN¥117.8k CN¥119.0k CN¥130.0k CN¥128.4k CN¥125.1k CN¥120.6k CN¥115.5k CN¥110.1k ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = CN¥1.2t We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.9%. We discount the terminal cash flows to today's value at a cost of equity of 9.3%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = CN¥267b× (1 + 2.9%) ÷ (9.3%– 2.9%) = CN¥4.3t Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CN¥4.3t÷ ( 1 + 9.3%)10= CN¥1.8t The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is CN¥3.0t. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of US$122, the company appears quite good value at a 33% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Alibaba Group Holding as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 9.3%, which is based on a levered beta of 1.202. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. See our latest analysis for Alibaba Group Holding Strength Earnings growth over the past year exceeded the industry. Debt is not viewed as a risk. Dividends are covered by earnings and cash flows. Weakness Dividend is low compared to the top 25% of dividend payers in the Multiline Retail market. Opportunity Annual earnings are forecast to grow for the next 3 years. Good value based on P/E ratio and estimated fair value. Threat Annual earnings are forecast to grow slower than the American market. Although the valuation of a company is important, it is only one of many factors that you need to assess for a company. It's not possible to obtain a foolproof valuation with a DCF model. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. What is the reason for the share price sitting below the intrinsic value? For Alibaba Group Holding, we've put together three relevant items you should consider: Financial Health: Does BABA have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk. Future Earnings: How does BABA's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NYSE every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
02-06-2025
- Business
- Yahoo
Alibaba Group Holding (NYSE:BABA) Is Increasing Its Dividend To CN¥1.98
Alibaba Group Holding Limited (NYSE:BABA) will increase its dividend from last year's comparable payment on the 10th of July to CN¥1.98. Although the dividend is now higher, the yield is only 0.9%, which is below the industry average. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. However, Alibaba Group Holding's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business. Over the next year, EPS is forecast to expand by 44.3%. Assuming the dividend continues along recent trends, we think the payout ratio could be 2.4% by next year, which is in a pretty sustainable range. Check out our latest analysis for Alibaba Group Holding The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2023, the annual payment back then was CN¥7.1, compared to the most recent full-year payment of CN¥7.54. This means that it has been growing its distributions at 3.1% per annum over that time. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily. Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Alibaba Group Holding hasn't seen much change in its earnings per share over the last five years. While EPS growth is quite low, Alibaba Group Holding has the option to increase the payout ratio to return more cash to shareholders. In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The payment isn't stellar, but it could make a decent addition to a dividend portfolio. Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 50 Alibaba Group Holding analysts we track are forecasting continued growth with our free report on analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
29-05-2025
- Business
- Yahoo
Chinese Stocks Soar As US Court Blocks Trump Tariffs
U.S.-listed Chinese stocks led by Alibaba Group Holding (NYSE:BABA), PDD Holdings Inc (NASDAQ:PDD), and Baidu, Inc (NASDAQ:BIDU) gained on Thursday after a federal court invalidated global tariffs enacted by President Donald Trump under the International Emergency Economic Powers Act on Wednesday. A three-judge panel, with appointees from the Reagan, Obama and Trump eras, ruled that the IEEPA doesn't give the president unlimited power to impose tariffs. Reportedly, the Trump administration filed an appeal against the ruling in Chinese electric vehicle companies, including NIO Inc (NYSE: NIO) and XPeng Inc (NYSE: XPEV), also noted strong upward momentum. On May 12, Beijing and Washington agreed to lower tariffs on each other's products, temporarily offering relief to the stock market. The deal reduced U.S. levies of 145% on most Chinese imports to 30%, while China's 125% duties on U.S. goods will drop to 10% for 90 days. In April, President Trump hinted at a significant reduction in tariff rates. During an investor summit, Treasury Secretary Scott Bessent acknowledged the impracticability and mutual challenges of a tariff war with China. U.S. chip designer Nvidia Corp (NASDAQ:NVDA) reported first-quarter results on Wednesday. It faced an export ban on H20 products to China on April 9. The company said it incurred a $4.5 billion charge in the first quarter related to H20 excess inventory and purchase obligations. Price Actions: BABA stock is up 0.50%, and PDD is up 1.20% at the last check Thursday. Read Next:Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Chinese Stocks Soar As US Court Blocks Trump Tariffs originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
