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    9988   KYG017191142

ALIBABA GROUP HOLDING LIMITED

(9988)
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Delayed Hong Kong Stock Exchange  -  01:49 2022-09-28 am EDT
76.10 HKD   -2.31%
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Asian stock valuations slump to lowest since March 2020

03/03/2022 | 05:15am EDT
Man stands in front of an electronic board displaying stock information at a brokerage firm in Hangzhou

(Reuters) - Valuations of Asian equities touched a 23-month low at the end of February, as geopolitical uncertainty surrounding Russia's invasion of Ukraine and the prospect of policy tightening by the U.S. Federal Reserve this year weighed on stock markets.

The cheaper valuations, however, cushion regional stock prices amid a turmoil in global equity markets, analysts said.

The MSCI Asia-Pacific index's forward 12-month P/E ratio stood at 13.12 at end-February, the lowest since the onset of the pandemic, against the MSCI World index's P/E of 16.49, Refinitiv data showed.

Graphic: MSCI Asia-Pacific and World index's PE:

"That (low valuations) provides some support to Asian equities," said Herald van der Linde, head of equity strategy, Asia Pacific, at HSBC.

The MSCI Asia-Pacific index lost just 1.3% last month while the MSCI World index faced a sharper fall of 2.7%.

"And we have seen bond yields come down, as the market prices in fewer rate hikes in the U.S., given recent events."

Fed Chair Jerome Powell said on Wednesday that the central bank would begin "carefully" raising rates from this month, while keeping a close eye on inflation and developments in Ukraine.

Valuations of Hong Kong shares were the cheapest in the region with P/E ratio dipping to 9.87 as a surge in COVID-19 cases in the financial hub and uncertainties over its coronavirus strategy spread alarm.

South Korea and China had P/E ratios of 10.01 and 10.04, respectively. India, Thailand, and Indonesia topped regional valuations with P/E ratios of 19.36, 17.01 and 16.57 respectively.

Graphic: Valuation of Asia-Pacific equities:

"In addition to attractive valuation vs. the developed markets, Asia presents better macro stability buffers, a lower starting point for the oil burden as well as fiscal room to respond compared to previous geopolitical tensions," said Zhikai Chen, head of Asian Equities at BNP Paribas Asset Management.

"The risk we monitor closely is whether the prolonged and increased tensions may challenge the capex cycle and weaken trade momentum," BNP Paribas's Chen said.

However, some analysts remained sceptical of a near-term recovery in Asian equities.

"I would not expect a recovery even with the low valuations," said Alicia Garcia Herrero, chief Asia Pacific economist at investment manager Natixis.

"This is particularly the case of China as the fiscal stimulus remains limited and the regulatory crackdown continues (Alibaba/Meituan/etc)."

Graphic: Breakdown by sector for Asia-Pacific equities' valuations: https://fingfx.thomsonreuters.com/gfx/mkt/lgpdwaoykvo/Breakdown%20by%20sector%20for%20Asia-Pacific%20equities'%20valuations.jpg

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Sherry Jacob-Phillips)

By Gaurav Dogra


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
ALIBABA GROUP HOLDING LIMITED -2.44% 76.1 Delayed Quote.-34.48%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.68% 0.63902 Delayed Quote.-10.87%
BNP PARIBAS -2.38% 45.11 Real-time Quote.-25.77%
BRITISH POUND / US DOLLAR (GBP/USD) -0.53% 1.06705 Delayed Quote.-20.44%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.41% 0.7256 Delayed Quote.0.00%
EURO / US DOLLAR (EUR/USD) -0.42% 0.9555 Delayed Quote.-15.60%
INDIAN RUPEE / US DOLLAR (INR/USD) -0.23% 0.012211 Delayed Quote.-8.75%
LONDON BRENT OIL -1.17% 85.17 Delayed Quote.11.58%
MSCI AC ASIA EX JAPAN (STRD) 0.22% 572.289 Real-time Quote.-26.56%
MSCI WORLD -0.19% 2403.88 Real-time Quote.-24.54%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) -0.65% 0.55932 Delayed Quote.-17.14%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) 1.06% 58.7655 Delayed Quote.-21.89%
WTI -1.35% 77.527 Delayed Quote.1.76%
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Financials
Sales 2023 911 B 127 B 127 B
Net income 2023 95 608 M 13 322 M 13 322 M
Net cash 2023 303 B 42 182 M 42 182 M
P/E ratio 2023 15,7x
Yield 2023 -
Capitalization 1 480 B 206 B 206 B
EV / Sales 2023 1,29x
EV / Sales 2024 1,04x
Nbr of Employees 245 700
Free-Float 100,0%
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Alibaba Group Holding Limited Technical Analysis Chart | MarketScreener
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Income Statement Evolution
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Sell
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Mean consensus BUY
Number of Analysts 45
Last Close Price 558,83 CNY
Average target price 1 047,03 CNY
Spread / Average Target 87,4%
EPS Revisions
Managers and Directors
Yong Zhang Executive Chairman & Chief Executive Officer
John Michael Evans Independent Director
Hong Xu Chief Financial Officer
Li Cheng Chief Technology Officer
Pan Hua Xu Senior Investment Manager
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