Today’s Research Reports on Stocks to Watch: Alibaba and Baidu

NEW YORK, NY / ACCESSWIRE / February 27, 2018 / Baidu shares were on the rise in Monday trading after it was revealed that Alibaba would be buying Baidu’s investment in Ele.me, a Chinese platform that offers online food delivery.

RDI Initiates Coverage on:

Alibaba Group Holding Limited
https://rdinvesting.com/news/?ticker=BABA

Baidu, Inc.
https://rdinvesting.com/news/?ticker=BIDU

Alibaba’s shares closed up a modest 0.47% on Monday with almost 19.5 million shares traded. Despite the modest gain there were a couple of major developments for the Chinese e-commerce giant. It was revealed that the company has completed a $5 billion share-repurchase program in late 2017. The disclosure of the buyback program being completed was in Alibaba’s annual report which was released yesterday. The report also revealed that there was a drop in Alibaba’s deferred tax liabilities due to the reduced corporate tax rate. Separately it was reported that Alibaba is on a quest to acquire Ele.me, a Chinese startup platform that offers online food delivery service. The move has been confirmed by an insider who is close to the deal according to Yicai.com. Alibaba will be buying the company, who has a value of about $9.5 billion, as a whole. The final price is still in talks.

Access RDI’s Alibaba Group Holding Limited Research Report at:
https://rdinvesting.com/news/?ticker=BABA

Baidu’s shares closed up 2.20% on Monday with nearly 2.6 million shares traded. It was reported yesterday that Alibaba has agreed to not only buy out Baidu but other investors as well in Chinese startup Ele.me. According to a personal familiar with the situation, e-commerce giant, Alibaba is aiming to expand its delivery network with the move. Analyst Steven Zhu, of Pacific Epoch remarked, “With its online traffic and Koubei business, Alibaba could create a lot of synergy with this acquisition. This would be a drag on the margin, because Alibaba now owns more delivery men and inventory, but it has no choice because long-term wise, most consumption still takes place offline.” If Alibaba is successful with this deal, the company along with Meituan Dianping, which is backed by Tencent Holdings, would be the two players to dominate the food delivery market in China. According to analysts the industry was worth $10.7 billion in the last quarter of 2017. Alibaba would have the biggest piece of the market with the acquisition of Ele.me. Alibaba currently owns about 23% of the company. It is not known how much Alibaba will pay Baidu for its investment in the company.

Access RDI’s Baidu, Inc. Research Report at:
https://rdinvesting.com/news/?ticker=BIDU

Our Actionable Research on Alibaba Group Holding Limited (NYSE: BABA) and Baidu, Inc. (NASDAQ: BIDU) can be downloaded free of charge at Research Driven Investing.

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