Markets

Alibaba and Allianz better than expected

In the past quarter, China’s largest online retailer Alibaba profited strongly from the increasing online trade during the Corona crisis. Despite the Corona crisis, Allianz can achieve a significant increase in profits.

The most important things about Alibaba and Allianz in advance:

  • Alibaba achieves stronger than expected sales growth
  • Allianz is currently not buying back shares

Alibaba achieved a whopping increase in sales of around 30 percent in the past quarter. Analysts (FactSet) had expected slightly less growth. However, the profit fell by 60 percent due to one-off effects from the previous year. At that time, Alibaba was able to record a high special income thanks to its stake of around 33 percent in the fintech subsidiary Ant Group.

The very company that Alibaba wanted to go public this week. But the IPO failed because regulatory provisions were not complied with. The Ant Group apologized to investors who had expected the largest IPO of all time – it should bring in around 34.5 billion dollars.

The Ant Group with the mobile payment service Alipay, which is popular in China, has risen to become the largest fintech company in the world within a decade. It also offers loans, insurance, and asset management online today. Alipay shares the mobile payment market in China with the competition from Wechat-Pay from the Chinese Internet company Tencent. In China today, people usually only pay with their cell phone in shops by scanning a code.

Products on Alibaba Group ADS

Allianz was able to defy the Corona crisis and achieved a profit of 2.9 billion euros in the past quarter. Although this is around three percent below the previous year, it has exceeded analyst expectations (Reuters). Sales fell slightly more sharply with a minus of 6 percent. Mainly because less life insurance could be sold. The charges in connection with the corona virus only amounted to around 100 million euros.

However, Europe’s largest insurer does not want to give an outlook on the annual result. In return, the insurance giant has commented on its share buybacks, which have since been suspended. They will no longer be accepted and so Allianz is foregoing share purchases of 750 million euros. So the title lacks a course support. With a loss of around 24 percent this year, Allianz shares are one of the weakest DAX stocks in 2020. Only Bayer, MTU, Fresenius and BASF are worse. Alibaba also lost recently, but overall this year it can look back on a significant increase of 36 percent.

Products on alliance

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Source: HSBC

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