31 July 2018Reading time: 2 minutes

Alibaba Group was founded in 1999 and consists of several companies who focus on the e-commerce business. The most important brand is, an online B2B platform that offers a wide range of goods. Other companies which are part of the group are Taobao, AliExpress and Alipay. Therefore Alibaba has become the second largest e-commerce company of China.

Alibaba has made several investments in the past period. The online retailer has invested, among other things, 2,23 billion dollar in Focus Media. This is a company which exploits digital screens for outdoor advertising. According to TechCrunch, Alibaba has an interest of 10 percent in Focus Media with the possibility to expend their interest to 15 percent. Alibaba and Tencent also might take over the Chinese activities of publicity agency WPP, according to Sky News. Thus it seems that Alibaba wants to focus more on offline channels. The Chines online retailer expects the turnover to grow with 60 percent over the total fiscal year.

However, Alibaba might experience negative effects from the trade conflict between the US and China. The company realizes a large part of its turnover in China and therefore will not immediately be affected by the new import tariffs of the US. However, the yuan lost value in the past period and there are concerns that the Chinese economic growth could be delayed because of the trade war. It remains to be seen how long the trade conflict will continue and how much financial damage this will cause for Alibaba.

On September 19th 2014, Alibaba Group was listed on the American New York Stock Exchange with an introduction stock price of 68 dollar per share. With a market value of 25 billion dollar, this was the largest IPO in history. By now the stock price of Alibaba is 194,18 dollar (27-07-2018) with a price earnings ratio of 51,4. Analysts maintain a stock price target of 225 dollar. The future price of the stock is subject to several political, industrial and sector specific as well as economic factors. Investors should consider such risk when making their investment decisions. Developments can be different at any time than investors expect, which can result in capital losses.

Vontobel products on Alibaba are tradable at DEGIRO.

Vontobel products on Alibaba are tradable at DEGIRO.

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22/09/2019 02:18:04