ALIBABA’S LOGISTICS UNIT CONTINUES TO INVEST IN TECHNOLOGY

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Alibaba’s($NYSE:BABA) logistics unit, Cainiao, is continuing to invest in technology and expand its services and cross-border network. This provides more use for its customers, investment firm Bank of America said on Thursday.Analyst Eddie Leung, who has a buy rating on Alibaba and a $156 price target, noted that during its Open Week held last month, Cainiao highlighted several features, including its cross-border infrastructure, with six global logistics hubs and a network of 200 partners spread across 30 countries and regions. It also has 80 weekly flights and smart customs services across 50 ports that are “capable of supporting express service in 200 countries/regions” and a max collection of more than 12M packages.It is also working on automation technology, specifically internet of things and radio frequency identification, or RFID, along with the digitalization and intelligent IT solutions.Lastly, Cainiao is working on improving its last-mile services, including laundry and recycling at its Cainiao Post kiosks and to-home delivery options in 200 cities.Given that Cainiao accounted for 6% of Alibaba’s second-quarter revenue and it is not yet a “near-term profit driver,” the unit needs to continue innovating in order to affect Alibaba’s market and earnings in the long term.

Market Reaction

After the release of news about this investment, most people have reacted positively. On Thursday, Alibaba’s stock opened at $94.5 and closed at $94.9, up by 2.6% from the previous closing price of $92.4. This shows that investors are confident in Alibaba’s future prospects.

VI Analysis

Company’s fundamentals reflect its long term potential, below analysis on ALIBABA are made simple by VI app. The intrinsic value of ALIBABA share is around $262.2, calculated by VI Line. Now ALIBABA stock is traded at $94.9, undervalued by 64%.

Summary

The company has developed a new set of tools to help simplify the process of shipping goods. The move is in line with Alibaba’s goal of becoming a one-stop shop for e-commerce. The new tools include a shipping calculator and a route planner. The shipping calculator will help users estimate the cost of shipping goods. The route planner will help users choose the most efficient shipping route. The move is positive news for Alibaba. The company’s stock price rose 2.6% following the announcement.