Alibaba: The rebound starts with the online trading giant | News


The Chinese government is reducing pressure on technology companies. Many activities are aimed at supporting the economy.

The reversal of the Chinese government

The e-commerce giant Alibaba was initially among the winners of the crown pandemic. But in late 2020, Chinese tech stocks began to sell out. The government has thrown companies on a leash for fear of too much influence and imposed regulatory restrictions. In some cases, Alibaba was no longer allowed to enter into exclusive partnerships with retailers. The Chinese government pushed for more data protection, less power for large corporations, and more competition. However, pressure from the Chinese government seems to be easing in the face of the weakening economy. This is necessary, after all, after the ejection of the hard blockade in Shanghai and Beijing, new coronation measures are already looming. Recent announcements by the Chinese government indicate that the measures implemented to regulate big technology technologies will be significantly relaxed. In this context, the Central Committee announced that it intends to better support the Chinese internet sector through targeted actions to bring the Chinese economy out of its trough. This is in line with recent measures to support China’s domestic economy. In addition to higher household expenses or tax reliefs for the purchase of cars and household appliances, companies employing, for example, university graduates are to receive grants.

As one of China’s leading e-commerce giants, Alibaba should particularly benefit from the China government’s planned change of course.

Alibaba convinces in the fourth quarter – the number of customers in China exceeds one billion

The e-commerce giant Alibaba has recently successfully escaped from a market environment characterized by new blockades. In April, cities with new COVID cases accounted for more than half of the gross volume of Chinese retail markets. These cities also included major commercial centers such as Shanghai and Shenzhen with widespread negative impacts on supply chains. The company was able to counter the rates and was impressed with the results for the fourth quarter. Revenues grew 9% year-on-year to $ 32,188 billion. The company benefits from the further expansion of the user base. Last year, the company was able to attract 177 million new consumers worldwide. In China, the billion mark was broken for the first time. Alibaba relies on online / offline distribution networks. This infrastructure provided an important means for consumers to source their essentials during a pandemic. Consumers were supplied with supplies. In addition, the demand for groceries and medicines through, the online delivery services platform, has more than doubled year on year. The cloud computing industry, which managed to enter the profit zone for the first time in the last fiscal year, remains the engine of growth.

Alibaba impresses with good results for the fourth quarter – the share buyback program increased by USD 10 billion!

Recently presented business data for the last fourth quarter impressively show that Alibaba is operationally back on track. Not least thanks to strong growth in the cloud segment, the eCommerce giant was able to clearly exceed the consensus with earnings per share of $ 1.25. Thanks to the dynamic results, sales were also better than expected. The fact that Alibaba also increased its share buyback program by another $ 10 billion shows that the group’s management expects the dynamic growth of earnings to continue in the current fiscal year.

Trade idea: Endless Turbo Long on Alibaba

With leveraged products, traders can participate disproportionately in all movements in the price of the underlying asset. Due to the leverage effect, the product reacts to the slightest movements in the price of the underlying. As the performance of the Underlying may fluctuate over time or not in line with investor expectations, there is a risk that the capital invested will not always be repaid in full. The loss of capital can be significant, resulting in a total loss.

Various endless turbochargers are available on the core Alibaba platform. An example is a perpetual turbo long position with a strike price of $ 81.2615 and a knock-out barrier of $ 81.2615. The product is suitable for investors who want to bet on rising prices of the underlying asset. FROM Endless Turbo Long there is no set date on Alibaba, but may expire during the period if a Knock Out Event occurs. A Knock Out Event occurs when the Observation Price (any price of the Underlying on the Observation Date as calculated by the Relevant Exchange) reaches or below the Knock Out Barrier at least once. In the event of such a knockout, the product becomes invalid without further action by the investor, resulting in a complete loss of all invested capital.

This product is not currency hedged. Therefore, the EUR / USD exchange rate influences the amount of the repayment to be paid in EUR. The EUR equivalent is calculated on the exercise date on the basis of the EUR fixing established by the European Central Bank at 14:15 CET.

A detailed explanation of the mentioned technical terms can be found in ours glossary.

Status: 06/13/2022

Issuer: DZ BANK AG / internet editorial office

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