Alibaba Stock Climbs 3.48% Amid Strategic Buybacks and African Expansion
1min read On December 23, Alibaba (BABA) saw a rise of 3.48% in its stock performance. The company has also been actively engaging in stock buybacks, recently repurchasing approximately 3,876,800 shares at the cost of around $39.99 million on December 20. This move is part of Alibaba's broader strategy to enhance shareholder value and signal confidence in the company's long-term outlook.
Furthermore, Alibaba's recent entry into the Moroccan market marks a significant milestone as it opens its first business station in Africa. Announced during a conference in Casablanca, the expansion aims to assist local businesses in increasing their exports, primarily targeting the North American markets. This strategic move is executed in collaboration with the local firm, Clementia, to facilitate Moroccan companies in establishing digital storefronts on Alibaba's platform, thereby enhancing their global reach and export opportunities.
Currently, Morocco's export economy is heavily reliant on the European Union. However, with Alibaba's support, the country aims to diversify its export destinations. Usage of Alibaba's platform among Moroccan companies is relatively low at present, but the introduction of these services is expected to substantially increase the number of local businesses engaging with global buyers.
The domestic e-commerce market for Alibaba shows encouraging signs of stabilization in market share and potential improvement in monetization rates. The recent reduction of service fees for certain Taobao and Tmall merchants and the comprehensive promotion strategies are anticipated to support growth in gross merchandise volume (GMV) while enhancing the take rate. These factors are predicted to gradually reverse the decline in monetization rates from the second quarter of fiscal 2025 onwards.
Alibaba is also focusing on growth in its cloud services and international e-commerce operations. The cloud segment, specifically, is expected to recover its revenue growth trajectory after strategic focus shifts, while international platforms like AliExpress and Lazada are anticipated to reduce losses progressively. Management has indicated that non-core business areas are planned to achieve breakeven within one to two years, potentially contributing significantly to revenue and valuation incrementally.
Investors have been optimistic, as seen in Alibaba's enhanced shareholder return initiatives, including significant stock repurchases. The expected inflow of substantial southbound capital following its inclusion in the Stock Connect could further improve market sentiment and liquidity.
