Noah Deeg Domestic Equities Analyst Class of 2027 | noahdeeg@iu.edu Alibaba Group Holding Limited Today's Date (Jan 19th, 2024) The internet retail business is a rapidly growing industry which is estimated to grow from 6.27 trillion USD in 2024 to 8.48 trillion USD by 2029. This industry was aided by the Corona virus pandemic and managed to retain much of the sale growth achieved over that period. Internet retail is expected to grow at a rate in excess of 6% and significantly outperform traditional brick and mortar retail. Investment Rationale Summary Industry Overview Company Overview Alibaba is involved in the retail and wholesale trade as well as cloud computing, digital media and entertainment. The company was founded in 1999 by Jack Ma and has grown exponentially ever since to become one of the biggest multinational corporations in the world. It has been able to push out companies like ebay from the Chinese Market. Catalyst 1 Tariff easement if tariffs were eased between the USA and China which is highly likely and probable in the future when tensions ease. China and the USA are highly economically interdependent and the tariffs they place on each other are detrimental to both economies. When tariffs are eased trade between China and the USA will increase significantly this will boost Alibaba’s stock because they export many goods to US companies. Depending on how political winds shift tariffs could easily increase or decrease one day. Regardless of what happens with tariffs China and the United States of America will continue to trade because of their economic interdependence. Ticker: $BABA Price: $69.41 Rating: BUY Price Target: $117.38 / 69.1% Stop Loss: $65.47 / -6.02% - This company holds a foremost place in the wholesale and direct to consumer retail space in one of the largest economies in the world through the Alibaba and AliExpress sites. Excessive fears over conflict with the US and regulation have cause the price of this stock to sink artificially low despite Alibaba’s significant revenue growth. Brief Valuation Market Cap: $171B | P/E: 9.65 | Industry P/E: 28.79 - This P/E value reflects a year of low profitability because of increased investment in AI and cloud computing the TTM profit for this year is double that of the last year and shows just how undervalued Alibaba is. Technical Analysis - Simple Moving Average (200): $85.57 Support: $69.54 Resistance: $73.34 Curabitur porta feugiat imperdiet. Duis id turpis scelerisque, cursus mauris iaculis, tempus orci. Nulla ornare eu augue nec pharetra Catalyst 2 China relaxing regulations. China has tended to relax regulations in order to aid their economy if there is an economic downturn they are likely to let off on Alibaba and let them expand their market share further currently Alibaba is dealing with leadership problems due to unfortunate conflicts between leadership and the government as well as monopolistic practices. China will relax regulations eventually or increase regulations of foreign companies in China either one of these eventualities would provide Alibaba with the potential for a massive growth in revenue and profits. Catalyst 3 Cloud computing success. Alibaba’s cloud computing enterprise is interesting because it offers a lot of opportunity. China traditionally heavily restricts US companies entry to their market so Alibaba has an advantage in the Chinese cloud computing market over more established players such as Microsoft, Amazon and Google. If Alibaba’s significant investments in the growing cloud computing industry pays off Alibaba will gain access to a large and highly profitable sector. This expansion of their business is the biggest catalyst to company growth. People’s data is increasingly moving to the cloud this means they are spending more on storing their data in the cloud and that there is more information to be gained by storing their information. Companies such as Apple are already scanning people’s photos and such to collect data. Sources: CapIQ, Yahoo Finance, TradingView, Mergent Short graphic description Risks Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas congue, arcu a ornare dictum, nisl neque aliquet est, et ultricies arcu mauris vel velit. Curabitur porta feugiat imperdiet. Duis id turpis scelerisque, cursus mauris iaculis, tempus orci. Nulla ornare eu augue nec pharetra. Aliquam erat volutpat. Suspendisse sagittis venenatis enim, eget porta nibh malesuada ut. 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