Deutsche Bank: Alibaba Is Refocusing On Core Strategies To Gain Advantage Over Competitors

Deutsche Bank issued a report on Alibaba Group Holding Ltd BABA. The firm rates Alibaba as a Buy and reduced its one-year price target from $105.10 to $98.

The report was written before news of Alibaba investing $200 million in Snapchat came out on Wednesday afternoon.

Deutsche Bank analysts Alan Hellawell, Vivian Hao and Ross Sandler wrote, "While some proactive measures across the platforms could limit upside surprise shorter term, mgmt continues to evince a confident longer term view; suggesting that mobile, category expansion and other factors will fuel growth going forward...the company increased registered capital requirements for Tmall merchant applicants to RMB1m, and has generally imposed more stringent criteria for B2C aspirants. While these actions might depress GMV forecasts nominally, the co expects such initiatives to improve storefront pedigree and consequently customer satisfaction."

Related Link: Did Bob Peck Call The Alibaba-Snapchat Investment Last Year?

Alibaba management views e-commerce and mobile development as a key focus in ensuring a dominant market position. Alibaba feels that it has a competitive advantage when it comes to bridging traffic generation into actual sales leads generation. Furthermore, the company plans to invest in the monitoring and exploitation of big data which it believes will allow the company to better serve merchants and customers.

Shares of Alibaba closed Wednesday at $81.99.