Wednesday, August 4, 2010

Alibaba "winter plowing" auspicious days



"Many years later, you can talk on the younger generation, Alibaba (1688.HK) shares have had three yuan a dark history." November 1, Alibaba Chairman Jack Ma in the internal full conference suggested this round of financial crisis has reached a turning point, have to watch the spring time, all the staff to "winter plowing" to greet the spring.

November 6 last year, Alibaba listing in Hong Kong, the opening price of 30 Hong Kong dollars, 122.2% higher than the offering price listed on the first day to close at 39.5 Hong Kong dollars. However, after about a year's time, Alibaba shares stumble endlessly, not only the breakdown of its IPO was priced at 1.35 Hong Kong dollars, or even 3.46 Hong Kong dollars after hitting a low.

At this moment, the internal staff have been sent Alibaba Ma asked: "Why do not repurchase stock?"

November 11, Alibaba in the Hong Kong Stock Exchange announced a 20 billion stock repurchase program. Obviously, for often say at the right time to do the right things Ma, the time has come to the best time to buy back shares Alibaba.

Day, Alibaba announced its third-quarter earnings. Filing shows Alibaba net profit 308.6 million yuan, up 48.9% over last year, operating income of 780.2 million yuan, up 36.8% over the same period the previous quarter growth of 6.1%.

Net income for the first time, decreased

U.S. financial crisis is the first domino falling, the extent to which China's manufacturing industry will be affected? In Alibaba B2B business can be regarded as a barometer in a sense.

Alibaba released from the third quarter earnings view, although the cold this winter, but Alibaba is still warm in winter. Period, its net profit to 308.6 million yuan, up 48.9% over last year, down 22.2% the previous quarter. This is the Alibaba listed, the first time, decreased net income.

Net income fell, in addition to the financial crisis affected by but also with Alibaba's investment expansion, exchange rate losses and other factors. Period, investment in Alibaba Alibaba Japan reached 8.5 million yuan. Filing shows its third-quarter loss, including interest income and aggregate net financial income and expenditure of 1940 million, representing an increase of 63.2% over the same period last year, down 83.1% the previous quarter, of which, aggregate loss of 41.3 million yuan, mainly to Since when the Australian dollar to U.S. dollar losses.

In addition, tax expenditures Alibaba surge. In the third quarter, its revenue expenditure amounted to 66.5 million yuan, increased 63.1% over the same period the previous quarter increase of 15.1%. It is noteworthy that the two tax unified China, Alibaba acquired identification of high-tech enterprises enjoy preferential enterprise income tax of 15% tax rate.

In addition to net profit fell outside, Alibaba's other business targets despite the slowdown, but still maintain a rapid growth. As of the third quarter, the company was paid a total of approximately 400,000 members, representing growth of 46.1% over the same period last year, up 8.2% the previous quarter end. At the same time, Alibaba achieve revenue 780.2 million yuan, up 36.8% over the same period the previous quarter growth of 6.1%.

Alibaba CEO Wei Zhe November 2 reporter's interview that Alibaba's customers accounted for the total number of Chinese companies less than 1%, despite the winter, there are still considerable room for growth.

Wei, that Alibaba is due to business growth, manufacturing enterprises shuffle, this reshuffle is conducive to the development of Alibaba, which is rough because of many management, operational efficiency is low, the quality-related businesses and products, but will be out, reshuffle, enterprises pay more attention to improving the quality of management, enhance operational efficiency, reduce intermediate links, and e-commerce happens to be an important means to achieve this goal.

UF, Chairman, CEO Wang Wenjing previous interview, also said the financial crisis, more attention to information technology companies, affected by the number of enterprise customers the third quarter, UF, especially SMEs, number of customers has been substantial growth .

Ma believes that the expansion of China's domestic market will become another Chinese manufacturing power, Alibaba will become another engine of growth. The third quarter, from revenue of the Chinese market accounted for Alibaba proportion of total operating income reached 37.9%, this ratio was 36.1% in the last quarter, compared to 28.9% over the same period last year.

Ma said China's domestic market has not fully activated, but after this round of financial crisis, after China's macro-economic control, China's domestic market will eventually rise. Ma appears in the current round of financial crises, the global consumer market is the U.S. consumer-driven era of single-engine, will be followed by the United States, China and other emerging markets, consumer-driven multi-engine time.

2 billion yuan share repurchase program

May be based on such judgments, Alibaba launched a stock buyback program. Alibaba in the Nov. 11 release announcement, said on May 5 this year at the shareholder meeting, the company was approved by shareholders by ordinary resolution and authorize the Board of the Hong Kong dollar 0.0001 each in the share buy-back of shares up to 505 million shares . Alibaba total capital of 50.5 billion shares, repurchase of shares up to about 10% of the total share capital.

November 11, Board of Directors has adopted a resolution approved by Alibaba, the company is available at the end of 2009 up to 2 billion yuan Hong Kong dollar repurchase shares in the market. Day Alibaba share price 4.80 yuan. The announcement said the company will be using the company's available cash reserves to repurchase shares for use, according to the share repurchase program to buy back the shares will be canceled.

Ma on November 1 of the full General Assembly, said the stock has been formed at the bottom. Ma also said that does not mean immediately fell to the bottom up, there may be lingering at the bottom, depending on the recovery of confidence in the stock market, which the company itself, also associated with the economic environment.

In addition to repurchase shares, Alibaba also announced within two programs: First, starting from November 1, the parent company Alibaba - Alibaba Group - will come up with cash subsidies to employees to purchase shares when the bank loans Alibaba interest. Through the scheme, employees will no longer have the option to pay interest for the bank; Second, employees purchased the loan repayment options for a further period of three years.

Reporters learned that before the listing of Alibaba, the Chinese banks to provide loans for employees to buy Alibaba option, exercise price of 6 yuan. If the economy does not change for the better, price do not increase, employees held options to be honored. In this case, the Bank of China to buy those options by employees also face repayment and interest rate pressures. Through these two projects, the company was relieved the employees of these pressures.

Insiders believe that, in the bottom of the Alibaba stock repurchase markets can rebuild confidence in Alibaba, shortening its stock price hovering at the bottom of the time. The discount plan, to extend the repayment plan is conducive to unity and internal staff to ride out the winter. Ma said: money may be small, perhaps not long enough to extend the time, but it represents the cause of all the people involved in Alibaba gratitude.

How Long Winter

In order to survive the winter, follow the market changes, the company was also made an adjustment on the products and services.

November 3, Alibaba announced two plans: one high-quality supplier program is designed to improve the procurement of business experience; second is the introduction of China's exports pass suppliers for China, Hong Kong and Taiwan suppliers Exports provide entry-level service products.

Alibaba within the plan was called "winter plowing plan." Wei, said the measures are designed to enhance the market position of Alibaba, to enhance the user growth.

High-quality program content providers, suppliers apply to become Alibaba paid member, certified by an independent third party verification of identity. Alibaba recently and VeriSign (one authoritative certification institutes) a partnership, VeriSign will provide identity verification Alibaba supplier certification. Suppliers through to verify certification, the product information to a label printed with VeriSign, to prove to the Alibaba site visitors have to verify identity information.

In addition, Alibaba will implement strict measures to strengthen protection of intellectual property rights, provide a more secure online trading environment. If the holders of intellectual property rights infringement and to believe that a product taken down in writing the product information requested Alibaba, Alibaba will respond quickly. A high quality provider plan, the company was able to under clear internal guidelines and procedures, confirmed the complaints removed product information or termination of illegal actions of Member accounts.

Suppliers of General China Alibaba launched a new entry-level product, designed to assist exporters in the current economic environment, the operations to Alibaba platform to improve efficiency, priced at 19,800 yuan per year to provide basic business commercial services, and limited the number of upload product information.

Alibaba China Suppliers existing pricing remains 50,000 yuan / year, but the product upgrade, the upgrade will add an additional window recommended, corporate mail services, business management tools, data steward, GPS and other services buyers . Wei, said that these new features will help suppliers to maximize the effectiveness of online recommendation.

Alibaba winter's lung power is still in its possession, "a thick coat." Filing shows the third quarter, the company was free cash flow from regular operations (non-GAAP) was about 410 million yuan, up 35.8% over last year, up 48.5% the previous quarter, the third quarter of this year, Alibaba Cash and bank deposits more than 6.1 billion yuan, and no debt.







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