Harding and Company – Alibaba Group Holding Limited – Case for the Bulls

MANHATTAN, N.Y. - Sept. 13, 2018 - PRLog -- With news of expansion plans breaking nearly weekly, continued growth at exceptional rates and the potential for several high-level IPO's coming from its host of businesses, most notably Ant Financial in the coming year, BABA has been a company that Harding and Company has recommended to its clients since its listing.

The most recent news about co-founder Jack Ma's intentions to leave next year obviously had a negative response in the markets. The fact that there was a weekend in between the initial report and actual confirmation of his succession plans did little to inspire confidence in investors. However, when looking at the data, volumes leading up to his official announcements indicate significant profit taking and the subsequent past week has seen a strong build-up in positions being taken back.

The stock saw lows of $153.25 and closed last night over 7% up at $165.51.

One of the key drivers of this has to be the continued growth seen within the company since its inception.

With quarterly reports looking more like impressive fund statements, the company and its board are constantly increasing its brand, portfolio and expansion plans.

The latest in its long list of partnerships is now with one of Russia's largest internet companies.

Alibaba to run Russian Amazon

As U.S. hits Russia and China with more sanctions and tariffs, the relations between Moscow and Shanghai have never been better.

Russia's President Vladimir Putin met with Chinese President Xi Jinping this week in Vladivostok and agreed on closer cooperation on trade, energy, agriculture, tech innovation and finance, according to China National Radio citing Chinese president.

One of the biggest deals announced at the conference is a landmark joint venture that may pave the way for a 'Russian Amazon', a massive conglomerate with Alibaba as the biggest shareholder.

For the Chinese company, this is a huge win and a way to consolidate and tame its local rivals, expand its global reach and strengthen its relations with state players in Russia at a time when U.S. tech companies are too wary of Russia and ongoing political storms.

This is what we know about the deal so far: Alibaba will hold the biggest share 48% in AliExpress Russia, Mail.ru Group will have 15%, MegaFon 24% and Russian sovereign wealth fund (Russian Direct Investment Fund) will own the remaining 13%.

Mail.ru is Russian biggest free e-mail service and internet platform and MegaFon is the country's biggest mobile operator.

Establishing an Amazon-like dominant player has alluded Russian e-commerce market, with AliExpress Russia controlling about a quarter of the market currently, according to ChronoPay data.

Alibaba made overtures to Sberbank, but no deal ever materialized as Russia's state bank chose to partner with Yandex.ru, Alibaba's competitor in Russia.

The terms of the joint venture could not be better for Alibaba. Mail.Ru Group, which is controlled by Russian oligarch Alisher Usmanov, will "hand over its electronic commerce business Pandao, monetary resources as well as distribution and integration with Mail.Ru Group," according to the statement.

Harding and Company have now placed a STONG BUY rating on Alibaba Group Holding Limited, with a 60-90-day target price of beyond $200 per share.

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