Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), & CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he's one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written, yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data & charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, author of the New York Times bestsellers 'End Game' & 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - author of Things That Make You Go Hmmm, one of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, 'MacroBusiness'.

Friday, 29 January 2016

Alibaba and the Q4 facts


There is a lot of conjecture about whether China's reported economic growth of +6.9 per cent is real or made up. Some like to argue that growth is nearer 2 or 3 per cent, as indeed is their right.

In that context, a quick look through Chinese e-commerce group Alibaba's latest quarterly results for December 2015. 

Being traded on the New York Stock Exchange (NYSE), the numbers should be somewhat less rubbery, if not exactly water tight.

Alibaba's key operating metric is Gross Merchandise Volume (GMV) which increased by +23 per cent over the year to a quarterly GMV of RMB964 billion (which, by the way, is a staggering US$149 billion).  

Annualise those numbers and the scale of the business is mind-blowing. Let's work with US dollar figures henceforth...

Summary financials 

Skipping along to the summary financials, quarterly revenue was up by +32 per cent year-on-year to US$5.3 billion, while mobile revenue soared by +192 per cent to US$2.9 billion.

Looking instead at the pretty pictures from the quarterly preso, the group had a milestone quarter with the number of annual active buyers blazing up to 407 million. Quarterly free cash flows of a monumental US$3.7 billion were generated.

Active buyers of 407 million were up from 334 million one year ago.

Revenue growth (+32 per cent), GMV (+23 per cent), "EBITDA" and net income all recorded impressive results.

The wrap

Solid numbers. The Chinese economy isn't slowing in the conventional sense - rather it is changing. 

The middle class is growing, and so is consumption. Looking at the growth and profile of buyers, some wealth and Alibaba's reach is evidently flowing outwards to rural areas and villages. 

Alibaba's share price has retraced since the beginning of 2015, as much a recognition that GMV growth could not continue at the same breakneck pace as anything else, and there are some evident and valid concerns about increasing scrutiny into counterfeit sales or "fakes". 

Alibaba has also flagged some potential for slowing sales in the market place, which will translate into a slightly lower share price. 

Overall, though, consumption is clearly growing in China, underscored by these financial results.