Tag: Alibaba

Alibaba Health Information Technology (HKG:241) Might Have The Makings Of A Multi-Bagger

If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for? Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. This shows us that it’s a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. So when we looked at Alibaba Health Information Technology (HKG:241) and its trend of ROCE, we really liked what we saw.

Return On Capital Employed (ROCE): What Is It?

For those that aren’t sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. To calculate this metric for Alibaba Health Information Technology, this is the formula:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)

0.015 = CN¥247m ÷ (CN¥21b – CN¥5.2b) (Based on the trailing twelve months to September 2023).

Therefore, Alibaba Health Information Technology has an ROCE of 1.5%. In absolute terms, that’s a low return and it also under-performs the Consumer Retailing industry average of 8.5%.

Check out our latest analysis for Alibaba Health Information Technology

SEHK:241 Return on Capital Employed March 29th 2024

Above you can see how the current ROCE for Alibaba Health Information Technology compares to its prior returns on capital, but there’s only so much you can tell from the past. If you’d like, you can check out the forecasts from the analysts covering Alibaba Health Information Technology for free.

What Can We Tell From Alibaba Health Information Technology’s ROCE Trend?

Alibaba Health Information Technology has recently broken into profitability so their prior investments seem to be paying off. Shareholders would no doubt be

Is Alibaba Health Information Technology Limited (HKG:241) Potentially Undervalued?

Alibaba Health Information Technology Limited (HKG:241), might not be a large cap stock, but it saw significant share price movement during recent months on the SEHK, rising to highs of HK$6.38 and falling to the lows of HK$4.63. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Alibaba Health Information Technology’s current trading price of HK$4.80 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Alibaba Health Information Technology’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Alibaba Health Information Technology

Is Alibaba Health Information Technology Still Cheap?

According to my valuation model, the stock is currently overvalued by about 34%, trading at HK$4.80 compared to my intrinsic value of HK$3.57. This means that the opportunity to buy Alibaba Health Information Technology at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Alibaba Health Information Technology’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Alibaba Health Information Technology look like?

SEHK:241 Earnings and Revenue Growth June 11th 2023

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors

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