- Cloud computing continues to have a long term runway as management remains confident on the long term prospects of the business and margin improvement continues to be a low hanging fruit.
- For the China Commerce segment, the focus is on high quality growth in lower tier cities and rural areas for both Taobao Deals and Taocaicai.
- International commerce continues to have huge upside potential due to low penetrations while local consumer services segment sees improved unit economics.
- The regulatory landscape looks to be improving for Alibaba and the company is also carrying out cost reductions and efficiency improvements to improve its cost structure.
- My target price for Alibaba based on a SOTP valuation model is $164, implying 76% upside potential from current levels.
For further details see:
Alibaba: One Of The Best Buying Opportunity As Worst Is Likely Over