China's Alibaba Group Holding Ltd BABA will host its first-ever analyst day on June 14, and is expected to take questions, among others, over concerns around the health of the Chinese consumer, traction with O2O and monetization of Ant Financial.
It remains to be seen whether management will provide financial guidance for FY17 and/or long-term targets.
Following are Cantor Fitzgerald's 12 questions to Alibaba management at the event.
The 12 Questions
1. "How does Alibaba's e-commerce business continue to thrive, like it did in 4FQ:16 (ended March), in a softening Chinese economy?"
Analyst Youssef Squali focus on the sustainability of the growth in the active buyers. Alibaba had 423 million active buyers (+21 percent year-over-year) as of 4Q:FY16.
2. "Is the TaoBao model reaching maturity?"
Squali noted that although TaoBao grew 18 percent year-over-year last quarter, "the growth rate is materially below tmall's 34 percent year-over-year and a sharp slowdown versus about 40 percent at the time of the company's IPO."
Related Link: 10 Topics For Alibaba's Analyst Day
3. "What is management's strategy to drive growth outside China?"
4. "How does the approach differ for developed vs. developing markets and how important is Lazada to replicate success at home into neighboring East Asian markets?"
5. "How much progress has Alibaba made with its online to offline (O2O) effort, and how does it measure up against that of other operators such as JD.com and Baidu?"
6. "How are the initiatives targeted at increasing e-commerce penetration in rural and urban areas performing?"
7. "How successful have Alibaba's efforts been in fighting counterfeiting to-date, and how can the company win this war?"
8. "When and how will Alibaba monetize its economic interest in the rapidly growing Ant Financial?"
The analyst noted that Alibaba "is entitled to receive up to a 37.5 percent payout of the equity value of Ant Financial immediately prior to an IPO or a 33 percent equity stake in that entity. Ant Financial was valued at about $60 billion in the last round of financing."
9. "What is BABA's appetite for continuing to fund the Koubei and the Cainiao networks as these businesses continue to lose money? What are the available options for spinning off, assimilating, or exiting these investments over time?"
10. "How does Alibaba plan to leverage Youku Tudou to drive user engagement with the core platform and how aggressively does management plan to monetize the video streaming service through brand ad placements and subscriptions?"
Related Link: What To Expect At Alibaba's Investor Day
11a. "Does the acquisition of a stake in lottery operator AGTech Holdings (in March 2016) mark Alibaba's return to the lucrative and highly profitable lottery business or is this simply a passive investment?"
11b. "How large is the addressable Ali Cloud opportunity domestically and how do the segment margins compare with core? How does BABA plan to compete internationally vs. other players such as
Amazon.com, Inc. AMZN,
Alphabet Inc GOOG GOOGL and
Microsoft Corporation MSFT?"
Squali expects cloud Computing is set to become roughly a $1 billion business in FY:17, "growing at a materially faster pace vs. the core."
12. "How is BABA's ownership in Alibaba Pictures (movie production), Xiami (music streaming), and Alibaba Sports Group beneficial to the overall ecosystem?"
Cantor Fitzgerald has a Buy rating on Alibaba, with a price target of $95 on the stock. At time of writing, Alibaba was down 0.98 percent at $76.80.
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