Monday, October 5, 2015

Alibaba Group: Short-Term Volatility In China Presents Opportunity For Long-Term Investors

We recently posted our views on Alibaba Group's dramatic stock declines. The market's overly pessimistic views on Chinese economic growth provides an opportunity to invest in Alibaba at an very attractive price. We believe that China's long-term growth in consumption and retail is still intact and will provide a long runway for growth for Alibaba.

TLDR: "China's slowdown is temporary as it transitions from investments to consumption. Retail and e-commerce continues to grow at double digits. Alibaba dominates Chinese e-commerce, and has grown alongside the market. Valuations at 17x 2016E EBITDA are reasonable. The shares could compound for decades to come."

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