If you look at the Chinese Internet giant Alibaba, you will come across a multitude of top performances. In fiscal year 2019/20 (March 31), for example, the company was the first to break the USD trillion barrier in trading volume. In addition, Alibaba is not only the undisputed number one in Asian e-commerce, but is also at the forefront in the field of cloud infrastructure. Not to forget the subsidiary Ant Financial, which also dominates the Asian market with its payment service Alipay. In addition, the group's financial arm is currently in the process of topping its previous record for an IPO. If Saudi Aramco is currently worth USD 29 bn in IPO money, Ant Financial could soon snatch it up. According to investors, the FinTech company is aiming for proceeds of USD 30 to 35 bn when it goes public in October.
Alibaba is also growing at a fast pace. For example, revenues in the past fiscal year 2019/20 (March 31) rose by 35%, and the profit attributable to shareholders even advanced twice as fast. In the new year, the internet group is continuing to press the accelerator. Among other things, the trend towards online shopping and home offices, accelerated by the corona pandemic, is making Alibaba's tills ring. From April to June, sales rose by 34% to CNY 133.3 bn. Cloud business developed particularly strongly, benefiting from the fact that in China, too, people are increasingly working from home and companies are moving their software to the cloud. On the earnings side, Alibaba also performed better than expected. The net profit attributable to shareholders more than doubled from CNY 21.25 bn to CNY 47.59 bn.
Even if most people only know Alibaba as a classic e-commerce player, there is still much more to the tech group. For example, the company is bringing the stationary supermarket into a digital future. To this end, Alibaba combines online and offline shopping with its retail platform Hema. The products are scanned by smartphone, then a decision is made whether they are to be delivered to the customer's home and payment is made simultaneously with Alipay. Of such "new retail markets", 2,000 are to be opened in the next five years.
Alibaba is also setting the pace in terms of delivery. Starting next year, online orders are to be delivered by autonomous robots. A new fleet of self-propelled robots was presented at its most recent technology conference. Equipped with geolocation and deep learning technologies, the machines can deliver up to 500 parcels a day within a radius of 100 kilometres. In addition, a computer weighing only 60 grams that can be connected to any screen was also presented at the high-tech conference.
Just as in the operating business, the curve on the stock market is also pointing sharply upwards. In the past 12 months alone, the Alibaba share has risen by 69%; on a five-year horizon, the increase even amounts to more than 300%. Although the corona crash also caused a small slowdown in the chart for the Chinese stock, the share was able to quickly put it out of action again. Currently, the share price is even about a quarter above the level before the crisis. In the most recent climbing tour, the resistance range of USD 220/230 was quickly overcome, which accelerated the upward tempo once again. Only just before the psychologically important USD 300 mark did a consolidation begin. The breather is currently taking place in a range between USD 270 and 300. Thereby the price is supported by an important horizontal support on the downside. However, the current all-time high of USD 299 limits the room for maneuver on the upside.
A Barrier Reverse Convertible fits perfectly into this constellation. With this yield enhancement product, investors have the right to receive a coupon regardless of the performance of the underlying. Even a reset to just close to the barrier level does not affect the product mechanism. It is important that the barrier remains intact. The new Softcallable BRCs on Alibaba offer attractive conditions in this regard: The risk buffer for both the CHF and USD variants is 41% - a level at which the share was last quoted during the crash in March. As a result, the BRCs are able to absorb moderate price setbacks unscathed. The coupons amount to 8.00% p.a. for the CHF security and 9.20% p.a. for its USD counterpart.
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