Skip to main content

BABA stock forecast 2025: The failure of Ant Financial's IPO


Ant Financial’s IPO was canceled, causing Alibaba’s share price to fall,


Alibaba has been unfavorable this year. First, the cancellation of Ant Financial's IPO indirectly caused Alibaba's stock price to fall, and now there is an antitrust investigation led by Alibaba, which caused Alibaba's stock price to plummet by 15% in a single day. From the highest point in October, the stock price of 319 dollars has fallen by as much as 30% to 222 dollars.


Alibaba stock price

From the perspective of K-line, Alibaba has reached the Oversold area, and it will rebound upward in the short term. From the perspective of valuation, Alibaba’s valuation is as high as US$388, which is 74% of the current share price of US$222. Value-added space, so it seems that whether it is viewed from the short-term K-line or the long-term valuation, now is a good time to buy the bottom of Alibaba.


Before investing, I will analyze and analyze the root cause of the disadvantage of Alibaba this time, because if this problem is not resolved, Alibaba’s stock price will always face huge political risks, so have you ever thought about whether Alibaba is a poke Which sensitive nerve has found these murderous opportunities from the top?


Is it because of Jack Ma's speech? But Jack Ma’s speeches have always been bold, or are Alibaba and Ant Financial too big? The risk is too high? Then why is Tencent involved? Tencent’s stock price has also fallen 15% from its highest point.


All this is to blame on Alibaba’s Alipay and Tencent’s WeChat payment, which blocked a big plan of the central bank, which is the implementation of the central bank’s digital currency.


Here to express my personal opinion, but the timing of all anti-monopoly is very delicate. All this is due to Alipay of Alibaba and WeChat payment of Tencent, which blocked a big plan of the central bank, which is the implementation of central bank digital currency. This is not entirely my alarmist talk. It is clearly stated in the prospectus of Ant Financial's IPO: "Our business model may be negatively affected by some new payment models implemented in China."


the prospectus of Ant Financial's IPO

Among them, there are mentions of the electronic digital currency invented by the central bank, and the impact of the implementation of electronic money on consumer payment habits, and how the central bank's digital currency will integrate into the existing electronic payment industry. All uncertainties, this central bank’s digital currency,


Simply put, it is the cash issued by the central bank, but it is used in the form of an electronic wallet and may be used as a substitute for coins and cash notes in the future.


Many people may find it strange that we are already using electronic payment methods such as Alipay and WeChat Pay. What is the difference between this and the newly launched central bank digital currency? The difference is that Alipay and WeChat Pay need to bind a bank card first, and then use a QR code and other quick payment methods, but they are a disguised card consumption.


But the central bank's digital currency is different. It is real gold and silver issued by the central bank. If a digital currency of 1 yuan is issued, there is 1 more currency in the market, which can directly affect the total amount of currency in the market. Currency is currency, and Alipay and WeChat Pay are third-party payment platforms, and will not affect the issuance of digital currency, but the monopoly of Alibaba and Tencent does hinder the issuance of digital currency from the following aspects, which also attracts With these kinds of political risks,


Let's first look at how the central bank's digital currency is implemented. The central bank is the largest boss that controls the issuance of digital currency, but the central bank has no way to directly send money to people because the central bank does not know who to send it to, so this digital currency needs the central bank First distribute the digital currency to the middleman, and then issue it to the electronic currency wallet through the middleman. These middlemen are traditionally several major banks in China, such as Industrial and Commercial Bank of China, Construction Bank, Bank of China, and Agriculture Banks, etc.,


workflow

These banks have successively launched trial versions of e-currency wallet apps, preparing to respond to the promotion of digital currencies, but this set of e-wallet apps has huge opponents. The current cashless retail payments, Alipay and WeChat payment have already occupied more than 90% of the market share, so to promote the central bank’s digital currency, it is necessary to add Tencent and Alibaba to similar intermediaries connecting several major banks.


But putting the issuance of digital currency in the hands of two major private companies requires the government to plan those rules and regulations to ensure that Alibaba and Tencent follow the same rules as traditional banks. A series of reforms, including such as returning to the service platform that focuses on providing payment, correction, or "exit" of lending, insurance, financial management, etc.


The monopoly of Alibaba and Tencent's electronic payment also has another problem. So far, these large e-commerce companies are operating in a closed environment, such as JD.com, which does not accept Alipay. , And WeChat Pay is not supported on Alibaba’s platform. Similarly, Meituan, which is backed by Tencent, also does not support the payment method of rival Alipay.


digital platform details

And such a monopolistic operation model is likely to be banned in this anti-monopoly investigation because the central bank’s digital currency is a cash currency, not a payment platform, so it cannot be rejected by any platform, just like Yes, can you imagine the situation of shopping in the mall with RMB cash, and the result is rejected by the mall?


But even if all of these are resolved, it is still not enough. Due to the monopoly of Alibaba and Tencent in electronic payment, even if the corresponding management laws are introduced, the central bank cannot rest assured to rely on the two private companies as the main digital currency. Instead, issuers would prefer to allocate this role more to the digital currency wallets of traditional banks.


Therefore, it can be expected that shortly, the central bank will encourage everyone to use the digital wallets of traditional banks, and even the digital wallets issued by the central bank itself, to weaken the people's dependence on Alipay and WeChat payment, but it is not so necessary to achieve this. simple,


The reason why Alipay and WeChat Pay are so popular is that they are connected to many other apps in the application software. For example, through Alipay and WeChat App, you can directly call uber, book movie tickets, book air tickets, and hotels, and monopolistic cross-selling is likely to be the focus of this monopoly investigation, which will weaken the cross-selling revenue of the two major groups.


china's internet rulers

In general, it is conceivable that after the introduction of the central bank's electronic currency, the implementation of traditional bank digital wallets is likely to weaken the market share of Alibaba and Tencent in electronic payment. Take Ant Financial as an example. It has opened up to financial services such as insurance, financial management, lending, etc., but these three pieces are likely to be peeled off this time, and the biggest remaining one is electronic payment.


ant group


As far as Ant Financial is concerned, it has handled a full 17 trillion electronic payments in the past 12 months, but this one is likely to be greatly weakened. In addition to losing more, it is a major issue for electronic payments. The control of data, the central bank’s electronic money, is to reduce the use of cash, to reduce money laundering, crime, etc.


But the ultimate goal, everyone knows, the ultimate goal of any central bank's digital currency in the world is to be able to thoroughly track the direction of funds.


These big data were previously owned by Tencent and Alibaba, but after the central bank's data currency wallet is launched, the big data behind this will be controlled by the central bank. Before the launch of the data currency, those delayed economic statements, the central bank's data currency The tracking of the government will bring real-time data analysis to the government, which industry needs macro-control, which industry has insufficient consumer power and needs stimulation, etc.


central bank

Then Tencent and Alibaba have lost a lot of the commercial value that these data could bring. In this way, if the starting point of this anti-monopoly investigation on Tencent and Alibaba is indeed triggered by the central bank’s digital currency, as expected, Then the impact may not be like many friends hope, walk away from the form, the thunder is heavy and the rain is small, but the actual transformation is peeling.


In this way, short-term K-line analysis, or long-term valuation analysis, may have to step aside. The risk of political factors will greatly affect technical analysis and the company’s fundamentals.


How will Tencent and Alibaba coexist with the central bank's digital currency? This will be a key factor in Alibaba and Tencent's share price forecasts.


Alibaba stock price prediction 2021

Comments

Popular posts from this blog

FB stock forecast 2022: Facebook’s latest earnings report analysis

Today I will interpret its just-announced financial report for the second quarter of 2021. combined with the digital advertising industry's general development direction and competitive landscape. First, let’s summarize Facebook’s latest earnings report. I think Facebook’s second-quarter earnings report is very, very good. We can see how good it is from year-on-year and quarter-on-quarter. Revenue in the second quarter increased by 56% year-on-year, while it increased by 48% year-on-year in the first quarter. Operating profit in the second quarter increased by 107% year-on-year, while the first quarter increased by 93% year-on-year.  Net profit increased by 101% in the second quarter, compared with a year-on-year growth of 94% in the first quarter. Earnings per share in the second quarter increased by 101% year-on-year, while the first quarter increased by 93% year-on-year. The operating margin in the second quarter was 43%, compared to 32% in the same period last year. The perform...

AMZN stock forecast 2025: Amazon's main advantages

  On July 6, after the US stock market opened, Amazon broke through $3,600, a record high.  Amazon has been oscillating between 3000-3500 US dollars in the past year, and the stock price finally broke through.  Amazon is a stock that has a high valuation from PE but is seriously undervalued by the market from the perspective of its development prospects. It is one of my favorite technology stocks.  Amazon's main advantages are:  1. Amazon's current GMV is only half that of Alibaba.  Looking at the current penetration rate of e-commerce in China and the future penetration rate of e-commerce in the United States, we will find that Amazon e-commerce has huge growth potential in the United States.  Amazon e-commerce is far from saturated in the United States.  2. Cloud computing has unlimited potential.  As the industry leader, Amazon's cloud computing can maintain a growth rate of 20%-30% for many years in the future.  3. The international ...

PDD stock forecast 2025: 2021 Q1 financial report analysis

PDD released the financial report for the first quarter of 2021.  According to the financial report, as of March 31, 2021, Pinduoduo's annual active buyers reached 823.8 million, a net increase of 195.7 million over the same period of the previous year, leading China's other domestic e-commerce platforms for the second consecutive quarter.  In terms of revenue, Pinduoduo’s revenue in the first quarter was 22.167 billion yuan, a year-on-year increase of 239% from 6.541 billion yuan in the same period last year.    Under non-general accounting standards, the platform’s net loss attributable to ordinary shareholders in the first quarter was RMB 1,890.3 billion, compared with a net loss of RMB 3.169 billion in the same period last year, and the net loss was significantly narrowed.  PDD officially enters a new era of 800 million users  The financial report shows that as of March 31, 2021, the number of active buyers on the Pinduoduo platform reached 823.8 m...

Bitcoin will eventually lose its king status! Replaced by Ethereum

 Considering many factors such as real use, user base, technological iteration speed, etc., Ethereum is likely to replace Bitcoin as the mainstream cryptocurrency.  In terms of market trends, the key difference between the current cryptocurrency market and the 2017-2018 bull market is the participation of institutional investors.  However, with the recent slowdown in the participation of institutional investors, the inflow of cryptocurrency ETFs has decreased, alternative currencies have emerged one after another, and the market has once again been dominated by retail investors.  This shift from institutions to retail investors is increasing the possibility of a market crash.  The current high volatility in the market will continue until cryptocurrencies have potential real economic uses independent of prices.  Etherfang has huge potential  The Ethereum system supports smart contracts and provides developers with a way to create new applications. ...

INTC stock forecast 2025: Intel's acquisition of SiFive

SiFive, a chip design start-up company based on the RISC-V instruction set architecture, has received an acquisition intention from investor Intel.  A person familiar with the matter, who asked not to be named, said that Intel has offered to buy SiFive for more than $2 billion.  RISC-V with x86 and Arm  As we all know, Intel dominates the industry leader in x86 architecture chip technology, while SiFive focuses on open-source RISC-V technology and employs several founding members of the RISC-V architecture.  For a long time, the field of CPU instruction set architecture has been dominated by x86 and Arm. Since RISC-V was born at the University of California, Berkeley in 2010, it has gradually formed a certain competitive landscape with Arm after more than ten years of development.  With the gradual refinement of the application field, the model of one chip making the world has become a thing of the past. Facing the hot AI and Internet of Things market, RISC-V i...

ASML stock forecast 2025: is it time to buy now?

Hello everyone, recently, because the market has a lot of fears about rising interest rates and shrinking the balance sheet, the Nasdaq as a whole has fallen a lot, and each support has basically been broken one after another. The general price has also broken, so there is no good signal to increase positions in the short term. It may be safer to hold cash first and wait until the decline begins to slow down a little or see a really cost-effective price before considering adding positions. However, the long-term bull market in the future will not end because of this year's interest rate hike, and cash will only become more and more worthless in the long run. In the short-term continuous decline of the stock market, we must put our minds in a positive state. At the same time, we must properly organize our thoughts and positions, prepare bullets, and use this time to do our homework for the stocks we are interested in. In this way, when a good price appears in the future, you will be...

The signal that the stock market has peaked?

the stock market Although I know how to judge when the bear market is over and when I should buy at the bottom, I still don't know how to judge the selling at the top. I'm afraid I don't know when to leave the market after buying stocks in the future. If you have also tried to avoid the crash, stock market crash, and even bear market, or always hold stocks at these times. These four tricks are based on my experience in the stock market for more than 10 years. They help me hold cash early before many market declines, so I suggest that you must see the end. It is likely to help you invest in stocks.  Raise to another level. Because knowing how to go is more important than knowing how to buy, and knowing how to go is an important factor in determining how much you can earn or lose. The first trick, everyone needs to learn to identify the Distribution Day. As the name implies, the shipping day is a day of huge selling pressure. On that day, it may be that large account...

Teladoc stock forecast 2025: Is it time to buy TDOC?

 TDOC's performance exceeded expectations. Why did the performance decline after the announcement?  Teladoc (TDOC) reported quarterly earnings of US$0.13 per share, which exceeded the consensus estimate of a loss of US$0.57 per share. In the same period last year, it had a loss of US$0.4 per share.  The earnings of this financial report far exceeded expectations.  In the last quarter, people expected this telemedicine service company to lose 0.25 US dollars per share, but the actual loss per share was 0.27 US dollars, which was not as good as expected at the time.  In the past four quarters, TDOC exceeded expectations twice.  The management stated that the company's current momentum in various channels and regions should not be underestimated in the conference call. It has raised its annual revenue guidance to 20 million U.S. dollars, which is expected to be between 1.97 billion and 2.02 billion U.S. dollars.    In the first quarter, the comp...

Shopify stock forecast 2025:Is it worth buying?

  In the last year, the stocks rose relatively well. Another sector is e-commerce. Whether it is Amazon, Alibaba, JD.com, Pinduoduo, SEA or vertical e-commerce platforms Etsy and Chewy, all of them have experienced huge gains, while another category has benefited from the e-commerce sector.  The company is a website building tool company such as Shopify BigCommerce Holdings. Today I will talk about shopify, the leader of website building tools.  First, let's briefly talk about shopify's business model. To put it simply, shopify is a fool-like website building platform. In the past, when a company wanted to build a corporate website, it generally needed to find a dedicated person to design and maintain the website.  If you want to add shopping functions to the website, the cost of building the website will also increase. This is true for many small businesses and individual businesses.   A very difficult thing. Shopify uses the SAAS model to provide websit...

NIO stock forecast 2025: 2021 Q1 report analysis

 April 30, NIO announced the first quarter of the 2021 financial report.  Revenue reached 7.98 billion yuan, a year-on-year increase of 481.8%, and a month-on-month increase of 20.2%; gross profit was 1.5548 billion yuan, a month-on-month increase of 36.2%, and last year was -167.5 million yuan; a net loss of 350 million yuan was significantly narrowed year-on-year and month-on-month.  Various indicators show that NIO's performance in the first quarter of this year is very impressive.  Gross profit margin exceeds 20% for the first time  NIO’s Q1 car sales were 7.40058 billion yuan, a year-on-year increase of 489.8% and a month-on-month increase of 20.0%.  The gross profit margin of automobile sales was 21.2%, exceeding 20% ​​for the first time, a significant increase from -7.4% in Q1 of 2020 and 17.2% in Q4 of 2020.  In addition, Weilai's Q1 comprehensive gross profit margin in 2021 will also reach 19.5%.  The founder, chairman, and CEO of NIO sai...